REG - Keller Group PLC - Trading Update

KellerAnnouncement

23/10/2023 07:15

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RNS Number : 8821Q  Keller Group PLC  23 October 2023

 

23 October 2023

Keller Group plc

 

Trading Update

 

On track for a record year; full year operating profit to be materially ahead
of market expectations

 

Keller Group plc ('Keller' or 'the Group'), the world's largest geotechnical
specialist contractor, issues a trading update for the period ended 30
September 2023.

 

Overall, positive trading momentum in the third quarter has been maintained
following the Group's exceptionally strong first half performance. Given our
trading performance to date and the continued momentum in the business, we now
expect full year underlying operating profit to be materially ahead of current
market expectations.

 

In North America, more resilient pricing than expected in Suncoast and
sustained operational improvements in the foundations business have resulted
in a strong performance, with a more progressive recovery in the operating
margin than expected. The pricing benefit at Suncoast is expected to moderate
into 2024 with the margin returning to more normalised levels.

 

In Europe, the macro-economic environment remains a challenge for the
business, resulting in weak demand in the residential and commercial sectors
across the region. Profitability continues to be impacted by the competitive
pricing environment and the impact of some challenging projects, whilst the
effect of several large successful projects in the prior year, provides a
tough comparator for the period. Accordingly, the anticipated profitability
improvement in the second half will be less than expected and as a result we
are taking appropriate corrective actions.

 

In Asia-Pacific, Middle East and Africa (AMEA), Keller Australia is performing
strongly, particularly in the infrastructure sector, and Austral has returned
to profit in the third quarter as expected. At NEOM, we remain in discussions
with the client in respect of the award of future works orders, however, due
to the evolution of the design, the piling work on The Line has been delayed
and we are taking steps to redeploy resources in the short term.

 

Reflecting the very strong earnings performance, together with continued focus
on working capital management, the Group's cash generation for the year to
date is considerably ahead of the prior year and better than our expectations.
We therefore expect the year-end net debt/EBITDA leverage ratio to be below
1.0x, well within our target range of 0.5x - 1.5x (2022: 1.2x).

 

Commenting, Michael Speakman, CEO of Keller Group plc, said:

 

"The Keller team has built on an exceptionally strong first half to deliver a
better than expected third-quarter performance, and consequently we now expect
full year underlying profit to be materially ahead of current market
expectations. This performance reflects continued momentum and operational
improvements within the business and the outstanding contribution of
colleagues across the Group, whom I would like to thank for their dedication
and hard work".

 

 

The Group will announce its full year results for 2023 on 5 March 2024.

 

 

For further information, please contact:

 

 Keller Group plc                               www.keller.com (http://www.keller.com)
 Michael Speakman, Chief Executive Officer      020 7616 7575
 David Burke, Chief Financial Officer
 Caroline Crampton, Head of Investor Relations

 FTI Consulting
 Nick Hasell                                    020 3727 1340
 Matthew O'Keeffe

 

Notes to editors:

Keller is the world's largest geotechnical specialist contractor providing a
wide portfolio of advanced foundation and ground improvement techniques used
across the entire construction sector. With around 10,000 staff and operations
across five continents, Keller tackles an unrivalled 6,000 projects every
year, generating annual revenue of c£3bn.

 

Cautionary statements:

This document contains certain 'forward-looking statements' with respect to
Keller's financial condition, results of operations and business and certain
of Keller's plans and objectives with respect to these items.

Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as 'anticipates', 'aims', 'due',
'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans',
'potential', 'reasonably possible', 'targets', 'goal' or 'estimates'. By their
very nature forward looking statements are inherently unpredictable,
speculative and involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ materially
from those expressed or implied by these forward-looking statements. These
factors include, but are not limited to, changes in the economies and markets
in which the Group operates; changes in the regulatory and competition
frameworks in which the Group operates; the impact of legal or other
proceedings against or which affect the Group; and changes in interest and
exchange rates. For a more detailed description of these risks, uncertainties
and other factors, please see the Principal risks and uncertainties section of
the Strategic report in the Annual Report and Accounts. All written or verbal
forward looking-statements, made in this document or made subsequently, which
are attributable to Keller or any other member of the Group or persons acting
on their behalf are expressly qualified in their entirety by the factors
referred to above. Keller does not intend to update these forward-looking
statements. Nothing in this document should be regarded as a profits forecast.
This document is not an offer to sell, exchange or transfer any securities of
Keller Group plc or any of its subsidiaries and is not soliciting an offer to
purchase, exchange or transfer such securities in any jurisdiction. Securities
may not be offered, sold or transferred in the United States absent
registration or an applicable exemption from the registration requirements of
the US Securities Act of 1933 (as amended).

LEI number: 549300QO4MBL43UHSN10 Classification: 3.1 Additional regulated
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