REG - Keller Group PLC - Interim Results for the half year ended 30 June 25
Tue 07:02
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RNS Number : 9262T Keller Group PLC 05 August 2025
5 August 2025
Keller Group plc
Interim Results for the half year ended 30 June 2025
Keller Group plc ('Keller' or the 'Group'), the world's largest geotechnical
specialist contractor, announces its results for the half year ended 30 June
2025.
Good H1 performance ahead of expectations; FY growth outlook maintained
H1 2025 H1 2024 Constant currency
£m £m % change
% change
Revenue 1,457.7 1,489.8 -2% +1%
Underlying operating profit(1) 102.6 113.2 -9% -6%
Underlying operating profit margin(1) 7.0% 7.6% -60bps n/a
Underlying diluted earnings per share(1) 98.1p 103.3p -5%
Free cash flow before interest and tax 51.6 134.1 -62%
Net debt (bank covenant IAS 17 basis)(2) 61.5 100.7 -39%
Dividend per share 18.3p 16.6p +10%
Statutory operating profit 97.3 105.9 -8%
Statutory profit before tax 87.4 95.3 -8%
Net cash inflow from operating activities 41.8 118.9 -65%
Statutory diluted earnings per share 91.8p 94.7p -3%
Statutory net debt (IFRS 16 basis) 153.5 199.0 -23%
(1) Underlying operating profit and underlying diluted earnings per share are
non-statutory measures which provide readers of this Announcement with a
balanced and comparable view of the Group's performance by excluding the
impact of non-underlying items, as disclosed in note 7 to the interim
condensed consolidated financial statements.
(2) Net debt is presented on a lender covenant basis excluding the impact of
IFRS 16 as disclosed within the adjusted performance measures in the interim
condensed consolidated financial statements.
( )
Highlights
· A good first half performance ahead of market expectations(3),
evidencing the sustained improvement in business performance.
· Performance relative to the strong prior year period reflected
the expected normalisation of market conditions in North America, particularly
pricing at Suncoast, alongside profitable growth in the Europe and Middle East
(EME) and Asia-Pacific (APAC) Divisions.
· Underlying operating margin remains strong at 7% (historic
five-year H1 average: 4.8%).
· Net debt(2) of £61.5m, up £32m since Dec 2024; driven by £25m
share buyback and increased working capital investment. Net debt/EBITDA
leverage ratio(2) of 0.2x (H1 2024: 0.3x; FY 2024: 0.1x).
· Successful completion of an initial £25m tranche of the
multi-year share buyback programme in H1. Keller announces its intention to
launch an additional tranche of £25m in H2.
· Underlying ROCE at 26.7% (H1 2024: 28.4%).
· Strong order book sustained at previous record level of £1.6bn.
· Accident Frequency Rate reduced to 0.04 with five lost time
injuries (H1 2024: 0.08; eight lost time injuries).
· The Board declares an interim dividend of 18.3p, with the
intention of applying a 5% increase in total for 2025.
· The Board's expectations for full year 2025 maintained, despite
the anticipated FX headwind, underpinned by the strong order book.
· James Wroath joins as Chief Executive Officer on 18 August 2025.
David Burke, Chief Financial Officer, said:
"We have delivered a good first half performance against a strong comparative
period, with underlying business performance remaining robust. Our strong
balance sheet provides us with flexibility, enabling organic growth as well as
targeted M&A, along with further financial returns to shareholders with an
increase to the interim dividend and an intention to launch an additional
£25m share buyback in the second half. Whilst the geopolitical and
macroeconomic volatility continues to create market uncertainty, the Group's
improved operational capabilities, strong order book and healthy tendering
pipeline give the Board confidence in meeting expectations for full year
2025(4), despite an anticipated increasing FX headwind in the second half."
(3) Company compiled consensus underlying operating profit for H1: £97.4m.
(4) Analyst consensus underlying operating profit for FY 2025: £215m.
For further information, please contact:
Keller Group plc www.keller.com (http://www.keller.com)
David Burke, Chief Financial Officer 020 7616 7575
Caroline Crampton, Group Head of Investor Relations
FTI Consulting
Nick Hasell 020 3727 1340
Matthew O'Keeffe
A webcast and presentation for investors and analysts will be held at 09.00am
BST on 5 August 2025, at:
FTI Consulting
200 Aldersgate Street
London EC1A 4HD
RSVP: connie.gibson@fticonsulting.com (mailto:connie.gibson@fticonsulting.com)
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Conference call:
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Conference ID: 4755308
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 5,500 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 may or 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. The forward-looking statements reflect knowledge and
information available at the date of preparation of this announcement and
Keller undertakes no obligation 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: 1.2 (Half yearly financial
reports)
Adjusted performance measures
In addition to statutory measures, a number of adjusted performance measures
(APMs) are included in this Interim Announcement to assist investors in
gaining a clearer understanding and balanced view of the Group's underlying
results and in comparing performance. These measures are consistent with how
business performance is measured internally.
The APMs used include underlying operating profit, underlying earnings before
interest, tax, depreciation and amortisation, underlying net finance costs and
underlying earnings per share, each of which are the equivalent statutory
measure adjusted to eliminate the amortisation of acquired intangibles and
other significant one-off items not linked to the underlying performance of
the business. Net debt (bank covenant IAS 17 basis) is provided as a key
measure for measuring bank covenant compliance and is calculated as the
equivalent statutory measure adjusted to exclude the additional lease
liabilities relating to the adoption of IFRS 16. Free cash flow before
interest and tax is provided as a metric to reflect operating cash flow
including capital expenditure; it is reconciled in the net debt flow table in
the Chief Financial Officer's review. Further underlying constant exchange
rate measures are given which eliminate the impact of currency movements by
comparing the current measure against the comparative restated at this year's
actual average exchange rates. Where APMs are given, these are compared to the
equivalent measures in the prior year.
APMs are reconciled to the statutory equivalent, where applicable, in the
adjusted performance measures section in this Announcement.
GROUP OVERVIEW
Financial performance
The Group delivered a good first half performance against a strong comparative
period in 2024 when our North American business did particularly well. The
Group's continued effective execution further evidences the sustainability of
the significant operational and financial improvements in the business
delivered in recent years.
Reported revenue of £1,457.7m was a marginal increase versus the prior year
period on a constant currency basis. Underlying operating profit of £102.6m
was 6.3% lower on a constant currency basis, driven by an expected decline in
North America (NA), partially offset by significant growth in profitability in
Europe and Middle East (EME) and Asia-Pacific (APAC). The underlying operating
margin remains strong at 7.0% (H1 2024: 7.6%). Driven by the £25m share
buyback and increased working capital investment, net debt (IAS 17 lender
covenant basis) increased by £32m to £61.5m since December 2024, and reduced
by £39.2m, from £100.7m in June 2024. Following the particularly strong cash
performance in 2023 and 2024, the cash generation profile has reverted to
normal. This equated to a net debt/EBITDA ratio of 0.2x (H1 2024: 0.3x; FY
2024: 0.1x), below our target leverage range of 0.5x-1.5x.
On 31 March 2025, the Group launched an initial £25m tranche of the
multi-year share buyback programme and completed the process on 29 May 2025,
having purchased approximately 1.7m shares in the period. In addition, given
the strength of the Group's balance sheet, Keller announces its intention to
launch an additional tranche of £25m in the second half of 2025, part of an
ongoing commitment to return capital to shareholders. Following the
anticipated share buyback, the Group expects to be approaching net cash by the
year-end.
Operating performance
In NA, revenue was slightly ahead of the prior year at £867.8m and
profitability declined by 20.5% to £82.1m on a constant currency basis. The
lower margin was driven by the expected price normalisation at the Suncoast
post-tension business, and a decline in profitability in the Foundations
business following the particularly buoyant market conditions in 2024, offset
by an improved performance in Moretrench Industrial. During the period, on a
normalised pricing basis, the Foundations business further built on its
improvement in underlying contract performance, execution and commercial
discipline, delivering consistently across a range of projects. Moretrench
Industrial, which operates in the highly regulated environmental remediation
market, continued to make good progress, with growth in revenue and profit. At
RECON, our geoenvironmental and industrial services company, volume increased
while profit decreased due to a continued delay to the permitting of further
LNG projects. Whilst there is increased uncertainty over the US construction
backdrop, the order book for North America at the period end was strong and
similar to the prior year period (on a constant currency basis), within which
the US Foundations business has done well in maintaining its work-in-hand
levels versus the prior year.
In EME, revenue was also similar to the prior year period at £408.3m on a
constant currency basis, driven by significant revenue growth in the Middle
East and across much of Europe, notably South East Europe and the Baltic
countries, and against the comparator of several large infrastructure projects
in Europe in the prior period. Underlying operating profit increased
significantly to £14.6m on a constant currency basis, reflecting an overall
improvement in project execution and operational performance. Profitability
benefitted from the non-recurrence of losses incurred from challenging
projects in the Middle East and Nordics in the prior year period.
In APAC, revenue increased by 2.9% to £181.6m, on a constant currency basis,
with revenue growth in Austral partially offset by lower volumes in Keller
Australia and Keller Asia(1). Underlying profit grew significantly, by 36.3%
to £13.9m, driven by Keller Australia and Austral, including the benefit of
several successful project closure settlements at Keller Australia. In the
wider region, performance was partially tempered by lower volumes and profits
in ASEAN, whilst Keller India continued to perform strongly following its
record performance in 2024.
(1) As from 1 January 2025, Keller India and ASEAN combined to form Keller
Asia.
Safety
The Group has a strong commitment to safety through various initiatives. In
the first half of 2025, our Accident
Frequency Rate reduced to 0.04 per 100,000 hours, with five lost time events
(H1 2024: 0.08), and our Total Recordable Incident Rate improved to 0.48, with
28 recordable injury events, a reduction of eight on the prior year period.
Sustainability and ESG
We are progressing well against our carbon measurement and reduction targets.
We will be net zero across all three emission scopes by 2050: net zero on
Scope 2 by 2030, net zero on Scope 1 by 2040 and net zero by 2050 on
Operational Scope 3 (covering business travel, material transport and waste
disposal). We are beginning to estimate our Scope 3 material emissions for
each of our business units.
To mark UN Earth Day, Keller hosted its second Group-wide sustainability week.
Themed around 'Keller gives back', the week saw over 1,500 employees engaged
across volunteer days, webinars, competitions and toolbox talks.
Our People and Safety strategy is driven by our focus on the wellbeing and
safety of every employee across the organisation and we continue to look at
new ways to sharpen this focus. For example, we recently organised a
Group-wide safety stand-down on how we respond to a material change on any
given project more safely.
As part of our charitable activities, we are delighted to have extended our
partnership with UNICEF's Every Child Fund, with a commitment to provide a
further £750,000 in funding over the next three years. This partnership will
provide the general funding needed to support UNICEF's activities around the
world.
Board development and succession
On 5 March 2025, Carl-Peter Forster succeeded Peter Hill as Chair. Carl-Peter
joined the Board as a Non-executive Director and Chair designate on 16
December 2024. Carl-Peter also chairs the Nomination and Governance Committee.
On 24 June 2025, it was announced that Michael Speakman, Chief Executive
Officer (CEO), had given notice that he will step down as CEO and as a
Director of Keller with effect from 18 August 2025 in order to continue his
necessary medical treatment. Following a comprehensive search process, the
Board announced the appointment of James Wroath as CEO, effective 18 August
2025. James brings a wealth of relevant experience to the role, having most
recently served as CEO of Wincanton plc. The Board is confident that he will
provide strong leadership and strategic direction as the Group continues to
deliver its successful growth strategy.
Interim dividend
Keller has an unbroken record of dividend payments and has consistently and
materially grown its dividend in the 31 years since listing, clearly
demonstrating the Group's ability to continue to prosper through economic
cycles. With a CAGR of 9% since flotation in 1994, it is one of only a very
few FTSE listed companies to have consistently paid a dividend over such a
period. The Board is declaring an interim dividend of 18.3p, with the
intention of returning to a more normal progressive 5% dividend policy for the
2025 financial year. The Group will revert to the normal balance of the
full-year dividend payable 35% as an interim and 65% as the final dividend.
The interim dividend is payable on 12 September 2025 to shareholders on the
register as at 15 August 2025.
Outlook
We have delivered a good first half performance against a strong comparative
period, with underlying business performance remaining robust. Our strong
balance sheet provides us with flexibility, enabling organic growth as well as
targeted M&A, along with the potential for further financial returns to
shareholders with an increase to the interim dividend and an intention to
launch an additional £25m share buyback in the second half. Whilst the
geopolitical and macroeconomic volatility continues to create market
uncertainty, the Group's improved operational capabilities, strong order book
and healthy tendering pipeline give the Board confidence in meeting
expectations for full year 2025, despite an anticipated increasing FX headwind
in the second half.
Operating review
North America
H1 2025 H1 2024 Constant currency
£m £m
Revenue 867.8 883.8 +0.8%
Underlying operating profit 82.1 105.8 -20.5%
Underlying operating margin 9.5% 12.0% -250bps
Order book 1,026.3 1,131.0 -1.4%
In North America, revenue was slightly ahead of the prior year period at
£867.8m on a constant currency basis, with higher revenues at Moretrench
Industrial, RECON and the Foundations business, largely offset by a decline in
revenue at Suncoast. Underlying operating profit decreased to £82.1m, down
20.5% on a constant currency basis, with the expected pricing environment
normalising at Suncoast and the Foundations business in the US that had
benefitted from the buoyant market in 2024. The Accident Frequency Rate, our
key metric for measuring safety performance, improved to 0.03 with one lost
time injury in the period (H1 2024: 0.06).
In Foundations, revenue increased slightly driven by higher levels of activity
across the business. Underlying operating profit reduced as expected, largely
driven by the normalising of the pricing environment in the US, and partially
offset by a higher level of profitable projects in Canada versus the prior
year period. On a normalised pricing basis, the underlying performance in
Foundations has continued to be strong, evidencing the sustained improvement
in underlying contract performance, improved project execution and focus on
commercial discipline over the last 18 months.
At Suncoast, the Group's post-tension business, revenue and profitability
declined as expected in the period, reflecting a decreased level of activity
and strong pricing in the prior period. The residential market was impacted by
the unfavourable interest rate environment, with a significant slowdown in
housing starts and building permits. The commercial segment was challenged by
both the interest rate environment and the introduction of tariffs impacting
construction activity more widely.
Moretrench Industrial, which operates in the highly regulated environmental
remediation market, continued to perform well, with growth in revenue and
profit driven by strong demand. At RECON, our geoenvironmental and industrial
services company, volumes increased while profit decreased due to a continued
delay in the permitting of new LNG projects. In July 2025, RECON commenced
work to prepare for a new LNG export facility in Louisiana.
US construction grew c.7% in 2024 and is expected to grow c.1% in 2025
(source: FMI). The slow-down is primarily driven by broad-based weakness in
the residential sector; infrastructure spend remains relatively resilient. The
Division's scale and market share in key geographies coupled with a reputation
for strong project delivery has enabled the division to maintain a strong
orderbook at £1,026.3m, similar to the prior year period, on an actual basis
and in constant currency. The US Foundations business has done well in
maintaining its work-in-hand levels versus the prior year period.
Europe and Middle East (EME)
H1 2025 H1 2024 Constant currency
£m £m
Revenue 408.3 418.9 -0.8%
Underlying operating profit 14.6 3.0 440.7%
Underlying operating margin 3.6% 0.7% +290bps
Order book 335.9 367.3 -6.9%
In EME, revenue was similar to the prior year period at £408.3m, a marginal
decrease of 0.8% on a constant currency basis, driven by revenue growth in the
Middle East and across much of Europe, notably South East Europe and the
Baltic countries, against the comparator of several large infrastructure
projects in Europe in the prior period. Underlying operating profit increased
significantly to £14.6m on a constant currency basis, reflecting an overall
improvement in project execution and operational performance across the
division. Performance benefitted from the non-recurrence of losses incurred in
the early stages of a challenging project in the Middle East and project
challenges in the Nordics in the prior period, offset by the non-recurrence of
a large successful infrastructure project in Central Europe. The Accident
Frequency Rate reduced to 0.06, with four lost time injuries in the period (H1
2024: 0.11).
Across the European business units, a strong improvement in operational
performance in the period saw an increase in underlying operating
profitability (in constant currency) whilst revenues declined, with continued
low levels of activity across a number of residential and commercial
construction markets as well as the non-recurrence of several large
infrastructure projects in Europe in the prior period (Central Europe and
Nordics). Against this backdrop, performance benefitted from continued
management focus on project execution. In the UK, despite comparable volumes
versus the prior period, continuing challenging market conditions had a
negative impact on margin.
In the Middle East, underlying operating profit increased significantly by
£11.1m, on a constant currency basis, driven by the non-recurrence of losses
incurred in the early stages of a challenging project in the region in the
prior period. Discussions continue with the client to remedy the contractual
position on the challenging project. The wider Middle East region performed
well, in line with a strong prior year period, across a range of markets and
projects.
The EME order book at the end of the period was £335.9m, down 6.9% on a
constant currency basis. The order book is broadly spread across geographic
markets and project size with overall growth across Europe offsetting the
run-off of a major project in the Middle East. In Europe, projects tend to be
weighted towards infrastructure, with residential and commercial sectors
remaining subdued, whilst the Middle East shows a more even spread across
sectors.
Asia-Pacific (APAC)
H1 2025 H1 2024 Constant
currency
£m £m
Revenue 181.6 187.1 +2.9%
Underlying operating profit 13.9 11.1 +36.3%
Underlying operating margin 7.7% 5.9% +180bps
Order book 203.2 142.5 +55.6%
In APAC, revenues increased by 2.9% to £181.6m on a constant currency basis,
largely driven by higher volumes at Austral and partially offset by lower
volumes at Keller Australia and Keller Asia(1). Underlying operating profit
increased to £13.9m, up 36.3%, driven by higher profitable growth at Keller
Australia and Austral, including the benefit of several project closure
settlements at Keller Australia. The division had no reported injuries in the
period (Accident Frequency Rate H1 2024: 0.08; with three lost time injuries).
The Austral business continued to perform strongly, increasing revenue and
profit, with management successful in driving growth in the business following
its turnaround in the second half of 2023. Keller Australia achieved a solid
performance. Volumes were down as expected after high levels of federal and
state government spending on transport infrastructure in the prior year,
though profits increased including the benefit from several successful project
closure settlements. In Keller Asia, our India business continued to perform
strongly in terms of both revenue and profit, whilst in ASEAN, the Singapore
market had a relatively soft first half. The Singapore business is expected to
grow in the second half following the award of several infrastructure
projects.
The APAC order book at the end of the period was £203.2m, up 55.6% on a
constant currency basis, largely driven by Austral in the mining and marine
sectors in Australia. In Keller Australia, federal and state investment in
transport infrastructure is slowing. Across Asia, India continues to work in
the commercial sectors whilst transitioning into the growing renewable energy
sector. In ASEAN, the Singaporean business has secured several urban
infrastructure projects.
(1) As from 1 January 2025, Keller India and ASEAN combined to form Keller
Asia.
Chief Financial Officer's review
This report comments on the key financial aspects of the Group's interim
results for the half year period ended 30 June 2025.
H1 2025 H1 2024
£m £m
Revenue 1,457.7 1,489.8
Underlying operating profit(1) 102.6 113.2
Underlying operating profit %(1) 7.0% 7.6%
Non-underlying items (5.3) (7.3)
Statutory operating profit 97.3 105.9
( )
(1) Details of non-underlying items are set out in note 7 to the interim
condensed consolidated financial statements. Reconciliations to statutory
numbers are set out in note 4 to the interim condensed consolidated financial
statements.
Geographic segmentation
Revenue Underlying operating profit(2) Underlying operating profit margin(2)
£m £m %
H1 2025 H1 2024 H1 2025 H1 2024 H1 2025 H1 2024
Division
North America 867.8 883.8 82.1 105.8 9.5% 12.0%
Europe and Middle East 408.3 418.9 14.6 3.0 3.6% 0.7%
Asia-Pacific 181.6 189.2 13.9 11.1 7.7% 5.9%
Central - - (8.0) (6.7) - -
Group 1,457.7 1,489.8 102.6 113.2 7.0% 7.6%
( )
(2) Details of non-underlying items are set out in note 7 to the interim
condensed consolidated financial statements.
Revenue
Revenue of £1,457.7m (H1 2024: £1,489.8m) was 2.2% down on 2024. On a
constant currency basis, revenue increased by 0.6%, reflecting volume growth
in Moretrench, RECON and Foundations in North America and Austral in APAC,
largely offset by lower revenues at Suncoast and Central Europe compared with
the prior period.
North America reported a revenue increase of 0.8% (at constant currency),
positively impacted by the higher activity at Moretrench, RECON and
Foundations which was offset by a reduction in trading volume and price at
Suncoast. In Europe and Middle East, revenue decreased by 0.8% (at constant
currency), driven by lower volumes in Central Europe and the Nordics, against
the comparative of several large infrastructure projects in the prior period.
This was partly offset by higher volumes in the Middle East, notably South
East Europe and the Baltic countries. Revenue in APAC increased by 2.9% on a
constant currency basis, driven by Austral in Australia.
We have a diversified spread of revenues across geographies, product lines,
market segments and end customers. Customers are generally market specific and
the largest customer represented 4% (H1 2024: 4%) of the Group's revenue for
the half year. The top 10 customers represent 17% of the Group's revenue for
the half year (H1 2024: 20%).
Underlying operating profit
The underlying operating profit of £102.6m was 9.4% lower than the prior year
(H1 2024: £113.2m) and on a constant currency basis was 6.3% down on prior
year.
North America underlying constant currency operating profit decreased by
20.5%, largely driven by the expected price normalisation at Suncoast. Europe
and Middle East constant currency underlying operating profit increased by
£11.9m to £14.6m, reflecting an overall improvement in operational
performance and project execution. APAC underlying operating profit grew by
36.3% on a constant currency basis, largely driven by the benefit of several
successful project closure settlements at Keller Australia and higher
profitable volume growth at Austral.
Share of post-tax results from joint ventures
The Group recognised an underlying post-tax loss of £0.1m in the period (H1
2024: £0.5m loss) from its share of the post-tax results from joint ventures.
Statutory operating profit
Statutory operating profit, comprising underlying operating profit of £102.6m
(H1 2024: £113.2m) and non-underlying items comprising net costs of £5.3m
(H1 2024: £7.3m), decreased by 8.1% to £97.3m (H1 2024: £105.9m).
Net finance costs
Net finance costs decreased by 7% to £9.9m (H1 2024: £10.6m), as a result of
lower average net debt during the period. Average net borrowings, excluding
IFRS 16 lease liabilities, decreased by 65% in the period from £112.4m during
the half year to 30 June 2024 to £39.2m during the half year to 30 June 2025,
driven by operating cash flow offset by the impact of the share buyback.
Taxation
The Group's underlying effective tax rate of 23% (H1 2024: 26%) is in line
with the full-year rate for FY 2024 of 23%, reflecting the expected tax rate
based on the forecasted full-year profit mix across the Group.
Cash tax paid in the period of £28.6m was a decrease of £5.8m over prior
year (H1 2024: £34.4m). The reduction is driven by the absence of a second
quarter prepayment in the US typically paid in June, in order to factor in
anticipated legislative changes that were enacted in July. These changes are
expected to significantly reduce the annual US federal cash tax liability for
the rest of the year.
The UK government has enacted legislation introducing a global minimum tax of
15% in line with the OECD's Pillar Two rules, which has applied to Keller from
1 January 2024. The Group has performed an assessment for FY 2025, and no
additional tax is expected for most jurisdictions in which we operate. Those
where the effective rate is below 15% are not expected to give rise to a
material additional tax charge.
Non-underlying items
Details of non-underlying items are included in note 7 to the interim
condensed consolidated financial statements.
Non-underlying operating costs
Non-underlying operating costs were £4.7m (H1 2024: £6.6m).
The Group has continued to make progress with the strategic project to
implement a new cloud-based computing enterprise resource planning (ERP)
system across the Group. Due to the size, nature and incidence of these costs,
they are presented as a non-underlying item, as they are not reflective of
underlying performance of the Group. The cost recognised in the first half is
£4.1m (H1 2024: £2.5m).
Exceptional restructuring costs of £0.6m (H1 2024: £3.3m) have been incurred
for the finance transformation project. The non-underlying costs for the
period include design costs; they do not include the running costs for the
underlying finance activities.
In the prior period, the Group realised a £0.8m loss on the disposal of the
South African business, which completed on 28 June 2024. There is an earnout
arrangement on the sale, with contingent consideration received this half
year, which has been recognised as other operating income, see note below.
Amortisation of acquired intangibles
The £0.8m (H1 2024: £1.5m) charge for amortisation of acquired intangible
assets relates to the RECON acquisitions. The prior period charge also
included amounts related to intangibles acquired with Moretrench and GKM
Consultants.
Non-underlying other operating income
Non-underlying other operating income of £0.2m arises from the first year
earn out contingent consideration receipt received for the South Africa
disposal. The £0.8m income in the prior period arises from a change in fair
value of the contingent consideration for the GKM Consultants acquisition.
Non-underlying taxation
A non-underlying tax credit of £0.8m (H1 2024: £1.0m) relates to the tax
benefit on non-underlying charges which are expected to be deductible.
Earnings per share
Underlying diluted earnings per share decreased by 5% to 98.1p (H1 2024:
103.3p) due to the reduced operating profit and lower net finance costs.
Statutory diluted earnings per share was 91.8p (H1 2024: 94.7p).
Dividend
The Group's dividend policy is to increase the dividend sustainably whilst
allowing the Group to be able to grow or, as a minimum, maintain the level of
dividend through market cycles. The dividend policy is therefore impacted by
the performance of the Group, which is subject to the Group's principal risks
and uncertainties as well as the level of headroom on the Group's borrowing
facilities, future cash commitments and investment plans.
The interim dividend has been rebased to 18.3p (H1 2024: 16.6p) commensurate
with an anticipated full-year dividend increase of 5%, following the 10%
increase in 2024.
Net debt flow
The Group's free cash inflow of £14.3m (H1 2024: £88.6m) is down on the
prior period, which benefitted from some larger customer advances. Free cash
flow has been impacted by increased working capital in Europe and Middle East,
partially offset by lower interest and tax payments than the prior year. The
basis of deriving free cash flow is set out below:
H1 2025 H1 2024
£m £m
Underlying operating profit 102.6 113.2
Depreciation and amortisation 52.6 54.0
Underlying EBITDA 155.2 167.2
Non-cash items (1.6) (3.3)
Increase in working capital (78.2) (2.5)
Increase in provisions, retirement benefit liabilities and other non-current 10.2 10.0
liabilities
Net capital expenditure (27.3) (23.1)
Additions to right-of-use assets (9.4) (14.2)
Sale of non-current assets 2.7 -
Free cash flow before interest and tax 51.6 134.1
Free cash flow before interest and tax to underlying operating profit 50% 118%
Net interest paid (8.7) (11.1)
Cash tax paid (28.6) (34.4)
Free cash flow 14.3 88.6
Dividends paid to shareholders (23.3) (22.6)
Purchase of own shares (28.8) (6.5)
Acquisitions (0.5) (0.7)
Business disposals 0.2 (4.9)
Non-underlying items (4.0) (5.0)
Right-of-use assets/lease liability modifications (6.3) (7.4)
Foreign exchange movements 21.8 (3.2)
Movement in net debt (26.6) 38.3
Opening net debt (126.9) (237.3)
Closing net debt (153.5) (199.0)
Working capital
Net working capital increased by £78.2m (H1 2024: £2.5m), reflecting a
£27.7m increase (H1 2024: £1.0m decrease) in inventory levels and a £73.1m
increase (H1 2024: £75.9m increase) in trade and other receivables. Trade and
other payables, which includes deferred revenue, increased by £22.6m (H1
2024: £72.4m increase). The movement in the period is lower than the prior
period, due to two significant customer advance payments received in the prior
period, which have now been utilised.
An increase in provisions and retirement benefit liabilities improved the
working capital by £10.2m (H1 2024: £10.0m). This reflects an increase in
provisions, as the amounts provided for contract and legal disputes exceeded
the amounts settled.
Capital expenditure
The Group manages capital expenditure tightly whilst investing in the upgrade
and replacement of equipment where appropriate. Net capital expenditure of
£27.3m (H1 2024: £23.1m) included proceeds from the sale of equipment of
£9.2m (H1 2024: £14.5m). The asset replacement ratio, which is calculated by
dividing gross capital expenditure, excluding sales proceeds on disposal of
items of property, plant and equipment and those assets capitalised under IFRS
16, by the depreciation charge on owned property, plant and equipment, was 98%
(H1 2024: 96%).
Purchase of own shares
The Group launched an initial £25m tranche of a multi-year share buyback
programme in the period and completed the process on 29 May 2025. The cash
outflow for the share buyback in the period was £25.2m. Purchase of own
shares also includes the acquisition of shares by the Employee Benefit Trust
(EBT) of £3.6m (H1 2024: £6.5m).
Acquisitions and disposals
Acquisition cash flow of £0.5m in the period relates to an earn-out payment
related to the acquisition of the 35% of our Saudi Arabia subsidiary completed
in 2023.
The business disposal cash inflow of £0.2m is the first year earn-out receipt
from the disposal of the South African subsidiary last year.
Non-underlying cash flows
Non-underlying cash outflow of £4.0m (H1 2024: £5.0m) includes the cash
impact of non-underlying items reflected in the income statement in the
current and prior periods. The outflow in the period includes £3.4m cash
outflow (H1 2024: £2.4m) for ERP costs and £0.6m outflow (H1 2024: £2.6m)
for the finance transformation project.
Financing facilities and net debt
The Group's total net debt of £153.5m (H1 2024: £199.0m) comprises loans and
borrowings of £217.0m (H1 2024: £296.8m), lease liabilities of £93.1m (H1
2024: £98.7m) net of cash and cash equivalents of £156.6m (H1 2024:
£196.5m).
The Group's term debt and committed facilities principally comprise US private
placement notes repayable in August 2030 ($120m) and in August 2033 ($180m).
In addition, the Group has a £400m committed multi-currency syndicated
revolving credit facility, originally a five-year facility with the option to
extend for a further two years. The first extension option was approved in the
period, extending the term to June 2030. The revolving credit facility was
undrawn at the period end.
At 30 June 2025, the Group had undrawn committed and uncommitted borrowing
facilities totalling £445.5m, comprising £400m of the unutilised revolving
credit facility and undrawn uncommitted borrowing facilities of £45.5m, as
well as cash and cash equivalents of £156.6m.
The most significant covenants in respect of the main borrowing facilities
relate to the ratio of net debt to underlying EBITDA, underlying EBITDA
interest cover and the Group's net worth. The covenants are required to be
tested at the half year and the year end. The Group operates comfortably
within all of its covenant limits. Net debt to underlying EBITDA leverage,
calculated excluding the impact of IFRS 16, was 0.2x (H1 2024: 0.3x), well
within the limit of 3.0x and below the leverage target range of between
0.5x-1.5x. Calculated on a statutory basis, including the impact of IFRS 16,
net debt to EBITDA leverage was 0.5x at 30 June 2025 (H1 2024: 0.6x).
Underlying EBITDA, excluding the impact of IFRS 16, to net finance charges for
the period to 30 June 2025 was 20.9x (H1 2024: 17.0x).
On an IFRS 16 basis, gearing at 30 June 2025 was 27% (H1 2024: 36%).
The average month-end net debt during the period ended 30 June 2025, excluding
IFRS 16 lease liabilities, was £39.2m (H1 2024: £112.4m) and the Group's
revolving credit facility has been undrawn during the period. The Group had no
material discounting or factoring in place during the period. Given the
relatively low value and short-term nature of the majority of the Group's
projects, the level of advance payments is typically not significant.
At 30 June 2025, the Group had drawn upon uncommitted overdraft facilities of
£1.7m (H1 2024: £2.3m) and had drawn £225.3m of bank guarantee facilities
(H1 2024: £203.0m).
Retirement benefit liabilities
The Group has defined benefit retirement obligations in Germany and Austria
and a number of end of service schemes in the Middle East that follow the same
principles as a defined benefit scheme. There is also a defined benefit scheme
in the UK, which is fully funded on an IAS 19 accounting basis. The Group's
net defined benefit liabilities as at 30 June 2025 were £15.3m (H1 2024:
£16.0m). The net defined liability for the Keller Group Pension Scheme in the
UK as at 30 June 2025 is £nil (H1 2024: £0.2m), as there are no further
contribution requirements to the scheme.
Currencies
The Group is exposed to both translational and, to a lesser extent,
transactional foreign currency gains and losses through movements in foreign
exchange rates as a result of its global operations. The Group's primary
currency exposures are US dollar, Canadian dollar, euro and Australian dollar.
As the Group reports in sterling and conducts the majority of its business in
other currencies, movements in exchange rates can result in significant
currency translation gains or losses. This has an effect on the primary
statements and associated balance sheet metrics, such as net debt and working
capital.
A large proportion of the Group's revenues are matched with corresponding
operating costs in the same currency. The impacts of transactional foreign
exchange gains or losses are consequently mitigated and are recognised in the
period in which they arise.
The following exchange rates applied during the current and prior half year
period:
H1 2025 H1 2024
Closing Average Closing Average
USD 1.37 1.30 1.26 1.27
CAD 1.87 1.83 1.73 1.72
EUR 1.17 1.19 1.18 1.17
AUD 2.09 2.05 1.90 1.92
Principal risks
The Group operates globally across many geotechnical market sectors and in
varied geographic markets. The Group's performance and prospects may be
affected by risks and uncertainties in relation to the industry and the
environments in which it undertakes its operations around the world. The Group
is alert to the challenges of managing risk and has systems and procedures in
place across the Group to identify, assess and mitigate major business risks.
The principal risks and uncertainties are as follows:
· Financial risks
o Inability to finance our business
· Market risk
o A rapid downturn in our markets
· Strategic risk
o Losing our market share
o Ethical misconduct and non-compliance with regulations
o Inability to maintain our technological product advantage
o Climate change
· Operational risk
o Ineffective management of our projects
o Causing a serious injury or fatality to an employee or member of the
public
o Not having the right skills to deliver
o Information Technology, cyber security and assurance
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 2024 Annual Report and Accounts.
Overall, our risk environment has remained stable during the first half of
2025, and we have only seen some minor changes to the previously disclosed
principal risks and mitigations. Key points to note are:
· Seven-year £400m RCF secured (initial five years with two
one-year extensions). The first RCF one year extension request was submitted
to the RCF agent. Acceptance of the extension has been given extending the RCF
maturity to June 2030. This along with continued strong operational
performance in H1 2025, demonstrates a clear ability to manage both existing
and future financial risks.
· Supply chains have in the whole returned to normal, including
both scarcity of certain materials (steel, cement and energy) and the pricing
impact. The one exception to this has been Suncoast, where the wider impact of
the conflict in Gaza has been putting some pressure on shipping rates for
steel. They are also being negatively impacted by the steels tariffs that have
been imposed by the US government.
· Political instability in key areas where Keller operates remains
under constant review and will do so until we see a significant de-escalation
in those areas. Inflation has fallen back to just above central bank targets
and interest rates have seen consecutive cuts in the US, Europe and the UK.
Current projections are for inflation to increase again through the rest of
2025 due to tariff uncertainty, before falling back again in 2026. Interest
rates are expected to continue to fall in 2025. This potentially creates
uncertainty for our customers and close attention will be paid to order
intake. We will maintain a very close watch on both inflation and interest
rates, especially in the US as the impact of the tariff policy becomes clearer
over H2 2025. Should these changes impact the current trajectory of inflation
and interest rates, we will take appropriate mitigating actions.
The important developments in managing our principal risks during 2025 are as
follows:
· Continued focus on managing a robust risk management process
across all parts of the organisation to enable better and more responsive
decision making, supported by our Governance, Risk Management and Compliance
(GRC) tool.
· Regularly reviewing our principal risks and the mitigating
actions we are taking to ensure they accurately reflect the risks we are
facing and how we are responding to those risks.
· Continuing to review risk trends, including the consideration of
risks across the medium and long term via horizon scanning and reviewing
emerging legislation to ascertain how they may impact Keller.
The key areas of focus for the remainder of 2025 are as follows:
· Continued tailored business unit training on the GRC tool.
· We will continue to monitor the following items through the
regular review of risks across the business and any impact they may have on
our principal risks for 2025 year-end reporting:
o Supply chain issues, specifically transportation, where the impacts of the
conflict in Gaza continue to put some pressure on shipping rates.
o Recruitment and retention issues have eased slightly, but focus will
remain where hotspots exist around specific roles. Increased focus on
retaining and training staff will remain a priority.
o Inflation rates have started to creep up with uncertainty around the
impact of tariffs coming out of the US. Interest rates are still falling, if a
little slower than anticipated and will be closely tracked in the markets in
which we operate. We will also monitor whether this leads to customers
beginning to restart projects that were put on hold.
Statement of Directors' responsibilities
The interim financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the interim
financial report in accordance with the Disclosure Guidance and Transparency
Rules (DTR) of the United Kingdom's Financial Conduct Authority (FCA).
The DTR require that the accounting policies and presentation applied to the
half yearly figures must be consistent with those applied in the latest
published annual accounts, except where the accounting policies and
presentation are to be changed in the subsequent annual accounts, in which
case the new accounting policies and presentation should be followed, and the
changes and the reasons for the changes should be disclosed in the interim
report, unless the FCA agrees otherwise.
The Directors confirm that to the best of their knowledge the condensed set of
financial statements, which have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting', give a
true and fair view of the assets, liabilities, financial position and profit
and loss of the Group, as required by DTR 4.2 and in particular include a fair
review of:
· the important events that have occurred during the first half of
the financial year and their impact on the interim condensed consolidated set
of financial statements as required by DTR 4.2.7R;
· the principal risks and uncertainties for the remaining half of
the year as required by DTR 4.2.7R; and
· related party transactions that have taken place in the first
half of the current financial year and changes in the related party
transactions described in the previous annual report that have materially
affected the financial position or performance of the Group during the first
half of the current financial year as required by DTR 4.2.8R.
The Directors of Keller Group plc are listed in the 2024 Annual Report and
Accounts.
Approved by the Board of Keller Group plc and signed on its behalf by:
David Burke
Chief Financial Officer
4 August 2025
INDEPENDENT REVIEW REPORT TO KELLER GROUP PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2025 which comprises the condensed consolidated income statement,
condensed consolidated statement of comprehensive income, condensed
consolidated balance sheet, condensed consolidated statements of changes in
equity, condensed consolidated cash flow statement and the related explanatory
notes. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
4(th) August 2025
Interim condensed consolidated income statement (unaudited)
For the half year ended 30 June 2025
30 June 2025 ( )
30 June 2024
Note Underlying Non-underlying items Statutory Underlying Non-underlying items
£m (note 7) £m £m (note 7)
£m £m Statutory
£m
Revenue 4,5 1,457.7 - 1,457.7 1,489.8 - 1,489.8
Operating costs (1,358.3) (4.7) (1,363.0) (1,379.6) (6.6) (1,386.2)
Net impairment loss on trade receivables and contract assets (0.6) - (0.6) (2.8) - (2.8)
Amortisation of acquired intangible assets - (0.8) (0.8) - (1.5) (1.5)
Other operating income 3.9 0.2 4.1 6.3 0.8 7.1
Share of post-tax results of joint ventures (0.1) - (0.1) (0.5) - (0.5)
Operating profit/(loss) 4 102.6 (5.3) 97.3 113.2 (7.3) 105.9
Finance income 2.8 - 2.8 3.2 - 3.2
Finance costs (12.7) - (12.7) (13.8) - (13.8)
Profit/(loss) before taxation 92.7 (5.3) 87.4 102.6 (7.3) 95.3
Taxation 8 (21.3) 0.8 (20.5) (26.7) 1.0 (25.7)
Profit/(loss) for the period 71.4 (4.5) 66.9 75.9 (6.3) 69.6
Attributable to:
Equity holders of the parent 70.9 (4.5) 66.4 75.8 (6.3) 69.5
Non-controlling interests 0.5 - 0.5 0.1 - 0.1
71.4 (4.5) 66.9 75.9 (6.3) 69.6
Earnings per share
Basic 10 99.7p 93.4p 104.8p 96.1p
Diluted 10 98.1p 91.8p 103.3p 94.7p
Interim condensed consolidated statement of comprehensive income (unaudited)
For the half year ended 30 June 2025
30 June 2025 30 June 2024
£m £m
Profit for the period 66.9 69.6
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange movements on translation of foreign operations (34.7) (5.0)
Exchange movements on translation of non-controlling interests (0.1) -
Transfer of translation reserve on disposal of subsidiaries - (0.6)
Cash flow hedge transfers to income statement (0.1) (0.1)
Remeasurements of defined benefit pension schemes (0.1) -
Other comprehensive income/(loss) for the period, net of tax (35.0) (5.7)
Total comprehensive income for the period 31.9 63.9
Attributable to:
Equity holders of the parent 31.5 63.8
Non-controlling interests 0.4 0.1
31.9 63.9
Interim condensed consolidated balance sheet (unaudited)
As at 30 June 2025
As at As at As at
30 June 30 June 31 December
2025 2024 2024
Note £m £m £m
Assets
Non-current assets
Goodwill and intangible assets 102.1 113.3 111.2
Property, plant and equipment 11 440.9 461.7 461.4
Investments in joint ventures 4.8 3.9 4.8
Deferred tax assets 46.2 45.5 61.5
Other assets 72.8 76.8 88.3
666.8 701.2 727.2
Current assets
Inventories 104.3 91.5 81.6
Trade and other receivables 794.7 796.6 759.1
Current tax assets 8 3.8 6.3 5.9
Cash and cash equivalents 12 156.6 196.5 207.7
Assets held for sale 13 1.1 13.0 9.2
1,060.5 1,103.9 1,063.5
Total assets 1,727.3 1,805.1 1,790.7
Liabilities
Current liabilities
Loans and borrowings (29.1) (88.6) (27.5)
Current tax liabilities 8 (11.9) (36.2) (33.0)
Trade and other payables (605.9) (615.7) (608.7)
Provisions (84.0) (68.9) (85.2)
(730.9) (809.4) (754.4)
Non-current liabilities
Loans and borrowings (281.0) (306.9) (307.1)
Retirement benefit liabilities 14 (15.3) (16.0) (15.2)
Deferred tax liabilities (9.3) (7.9) (9.4)
Provisions (94.1) (86.4) (89.3)
Other liabilities (18.0) (23.4) (18.6)
(417.7) (440.6) (439.6)
Total liabilities (1,148.6) (1,250.0) (1,194.0)
Net assets 578.7 555.1 596.7
Equity
Share capital 16 7.3 7.3 7.3
Share premium account 38.1 38.1 38.1
Capital redemption reserve 16 7.6 7.6 7.6
Translation reserve (18.5) 24.2 16.2
Other reserve 16 56.9 56.9 56.9
Hedging reserve 1.7 1.6 1.8
Retained earnings 482.2 416.6 465.8
Equity attributable to equity holders of the parent 575.3 552.3 593.7
Non-controlling interests 3.4 2.8 3.0
Total equity 578.7 555.1 596.7
( )
Interim condensed consolidated statement of changes in equity (unaudited)
For the half year ended 30 June 2025
Share premium account Capital redemption reserve Non-controlling interests
Share capital Translation reserve Other Hedging Retained earnings Total
reserve reserve equity
£m £m £m £m £m £m £m £m £m
At 31 December 2024 7.3 38.1 7.6 16.2 56.9 1.8 465.8 3.0 596.7
Total comprehensive income for the period - - - (34.7) - (0.1) 66.3 0.4 31.9
Dividends - - - - - - (23.3) - (23.3)
Purchase of own shares for ESOP trust - - - - - - (3.6) - (3.6)
Purchase of own shares (25.2) - (25.2)
Share-based payments - - - - - - 2.2 - 2.2
At 30 June 2025 7.3 38.1 7.6 (18.5) 56.9 1.7 482.2 3.4 578.7
Share premium account Capital redemption reserve Non-controlling interests
Share capital Translation reserve Other Hedging reserve Retained earnings Total
reserve equity
£m £m £m £m £m £m £m £m £m
At 31 December 2023 7.3 38.1 7.6 29.8 56.9 1.7 373.9 2.7 518.0
Total comprehensive income for the period - - - (5.6) - (0.1) 69.5 0.1 63.9
Dividends - - - - - - (22.6) - (22.6)
Purchase of own shares for ESOP trust - - - - - - (6.5) - (6.5)
Share-based payments - - - - - - 2.3 - 2.3
At 30 June 2024 7.3 38.1 7.6 24.2 56.9 1.6 416.6 2.8 555.1
Interim condensed consolidated cash flow statement (unaudited)
For the half year ended 30 June 2025
30 June 2025 30 June
2024
Note £m £m
Cash flows from operating activities
Profit before taxation 87.4 95.3
Non-underlying items 5.3 7.3
Finance income (2.8) (3.2)
Finance costs 12.7 13.8
Underlying operating profit 4 102.6 113.2
Depreciation/impairment of property, plant and equipment 52.6 53.9
Amortisation of intangible assets - 0.1
Share of underlying post-tax results of joint ventures 0.1 0.5
Profit on sale of property, plant and equipment 11 (3.9) (6.3)
Other non-cash movements (including charge for share-based payments) 2.2 2.5
Operating cash flows before movements in working capital and other underlying 153.6 163.9
items
(Increase)/decrease in inventories (27.7) 1.0
Increase in trade and other receivables (73.1) (75.9)
Increase in trade and other payables 22.6 72.4
Increase in provisions, retirement benefit and other non-current liabilities 10.2 10.0
Cash generated from operations before non-underlying items 85.6 171.4
Cash outflows from non-underlying items: contract dispute - (0.1)
Cash outflows from non-underlying items: ERP costs (3.4) (2.4)
Cash outflows from non-underlying items: restructuring costs (0.6) (2.5)
Cash generated from operations 81.6 166.4
Interest paid (8.0) (10.2)
Interest element of lease rental payments (3.2) (2.9)
Income tax paid (28.6) (34.4)
Net cash inflow from operating activities 41.8 118.9
Cash flows from investing activities
Interest received 3.0 2.7
Proceeds from sale of property, plant and equipment 9.2 14.5
Proceeds from sale of other non-current assets 2.7 -
Acquisition of businesses, net of cash acquired (0.5) (0.7)
Disposal of businesses 6 0.2 (4.9)
Acquisition of property, plant and equipment 11 (36.5) (37.6)
Net cash outflow from investing activities (21.9) (26.0)
Cash flows from financing activities
Debt issuance costs (0.5) (3.2)
Repayment of borrowings (0.2) (0.1)
Payment of lease liabilities (15.1) (14.1)
Purchase of own shares for ESOP trust (3.6) (6.5)
Purchase of own shares 16 (25.2) -
Dividends paid 9 (23.3) (22.6)
Net cash outflow from financing activities (67.9) (46.5)
Net (decrease)/increase in cash and cash equivalents (48.0) 46.4
Cash and cash equivalents at beginning of period 207.7 149.0
Effect of exchange rate movements (4.8) (1.2)
Cash and cash equivalents at end of period 12 154.9 194.2
1. Corporate information
The interim condensed consolidated financial statements of Keller Group plc
and its subsidiaries (collectively, the 'Group') for the half year period
ended 30 June 2025 were authorised for issue in accordance with a resolution
of the Directors on 04 August 2025.
Keller Group plc (the 'company') is a limited company, incorporated and
domiciled in the United Kingdom, whose shares are publicly traded on the
London Stock Exchange. The registered office is located at 2 Kingdom Street,
London W2 6BD. The Group is principally engaged in the provision of specialist
geotechnical engineering services.
2. Basis of preparation
The condensed financial statements included in this interim financial report
have been prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting'. They do not include all of the
information required for full annual financial statements and should be read
in conjunction with the consolidated financial statements of the Group as at
and for the year ended 31 December 2024. The interim report does not
constitute statutory accounts. The financial information for the year ended 31
December 2024 does not constitute the Group's statutory financial statements
for that period as defined in section 435 of the Companies Act 2006 but is
instead an extract from those financial statements. The Group's financial
statements for the year ended 31 December 2024 have been delivered to the
Registrar of Companies. The auditor's report on those financial statements
contained an unqualified opinion, did not draw attention to any matters by way
of emphasis and did not contain any statement under section 498 of the
Companies Act 2006. The annual financial statements for the year ended 31
December 2025 will be prepared in accordance with UK adopted international
accounting standards.
The Group has not early adopted any new standard, interpretation or amendment
that has been issued but is not yet effective.
One amendment applies for the first time in 2025 but does not have an impact
on the interim condensed consolidated financial statements of the Group.
Lack of exchangeability - Amendments to IAS 21
The amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates'
specify how an entity should assess whether a currency is exchangeable and how
it should determine a spot exchange rate when exchangeability is lacking. The
amendments also require disclosure of information that enables users of its
financial statements to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect, the entity's
financial performance, financial position and cash flows.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2025.
Going concern
As part of the interim going concern review, management ran a series of
downside scenarios on the latest forecast profit and cash flow projections to
assess covenant headroom against available funding facilities for the period
to 31 December 2026. This is a period of at least 12 months from when the
interim financial statements are authorised for issue and aligns with the
period in which the Group's banking covenants are tested.
This process involved constructing scenarios to reflect the Group's current
assessment of its principal risks, including those that would threaten its
business model, future performance, solvency or liquidity. The principal risks
and uncertainties modelled by management align with those disclosed within the
2024 Annual Report and Accounts.
The following severe but plausible downside assumptions were modelled:
· Rapid downturn in the Group's markets resulting in up to a 10%
decline in revenues.
· Ineffective execution of projects reducing profits by 1.5% of
revenue.
· A combination of other principal risks and trading risks
materialising together reducing profits by up to £28.2m over the period to
31 December 2026. These risks include changing environmental factors, costs
of ethical misconduct and regulatory non-compliance, occurrence of an accident
causing serious injury to an employee or member of the public, the cost of a
product or solution failure and the impact of a previously unrecorded tax
liability.
· Deterioration of working capital performance by 5% of six months'
sales.
The financial and cash effects of these scenarios were modelled individually
and in combination. The focus was on the ability to secure or retain future
work and potential downward pressure on margins. Management applied
sensitivities against projected revenue, margin and working capital metrics
reflecting a series of plausible downside scenarios.
Even in the most extreme downside scenario modelled, including an aggregation
of all risks considered, which showed a decrease in operating profit of 55.1%,
the adjusted projections do not show a breach of covenants in respect of
available funding facilities or any liquidity shortfall. Consideration was
given to scenarios where covenants would be breached and the circumstances
giving rise to these scenarios were considered extreme and remote.
This process allowed the Board to conclude that the Group will continue to
operate on a going concern basis for the period through to the end of December
2026, a period of at least 12 months from when the interim financial
statements are authorised for issue. Accordingly, the interim financial
statements are prepared on a going concern basis. At 30 June 2025, the Group
had undrawn committed and uncommitted borrowing facilities totalling £445.5m,
comprising £400m of the unutilised portion of the revolving credit facility
and undrawn uncommitted borrowing facilities of £45.5m, as well as cash and
cash equivalents of £156.6m. At 30 June 2025, the Group's net debt to
underlying EBITDA ratio (calculated on an IAS 17 covenant basis) was 0.2x,
well within the limit of 3.0x.
Significant accounting judgements, estimates and assumptions
During the half year to 30 June 2025, there have not been any changes in the
significant accounting judgements, estimates and assumptions disclosed in the
2024 Annual Report and Accounts.
The Group's policy is to test for goodwill impairment annually, or if there
are major changes to events and circumstances which would indicate an
impairment to the carrying value of goodwill for the cash-generating units
(CGUs). For the half year to 30 June 2025, the Group has reviewed each of its
CGUs for indicators of impairment in accordance with IAS 36. No indicators of
impairment were identified during the period. The Group continues to monitor
the performance of all CGUs, including the carrying value of goodwill in
Norway, where trading during the period was impacted by the timing of project
activity. However, based on current expectations, there is no evidence of a
significant change in the long-term outlook that would require a full
impairment review at this time.
3. Foreign currencies
The exchange rates used in respect of principal currencies are:
Average for period Period end
Half year to Half year to Year to As at As at As at
30 June 30 June 31 December 30 June 30 June 31 December
2025 2024 2024 2025 2024 2024
US dollar 1.30 1.27 1.28 1.37 1.26 1.25
Canadian dollar 1.83 1.72 1.75 1.87 1.73 1.80
Euro 1.19 1.17 1.18 1.17 1.18 1.21
Singapore dollar 1.72 1.70 1.71 1.75 1.71 1.71
Australian dollar 2.05 1.92 1.94 2.09 1.90 2.02
4. Segmental analysis
In accordance with IFRS 8, the Group has determined its operating segments
based upon the information reported to the Chief Operating Decision Maker. The
Group comprises of three geographical divisions which have only one major
product or service: specialist geotechnical services. North America, Europe
and Middle East, and Asia-Pacific continue to be managed as separate
geographical divisions. This is reflected in the Group's management structure
and in the segment information reviewed by the Chief Operating Decision Maker.
Half year to 30 June 2025 Half year to 30 June 2024
Revenue Operating profit Revenue Operating profit
£m £m £m £m
North America 867.8 82.1 883.8 105.8
Europe and Middle East 408.3 14.6 418.9 3.0
Asia-Pacific 181.6 13.9 187.1 11.1
1,457.7 110.6 1,489.8 119.9
Central items and eliminations - (8.0) - (6.7)
Before non-underlying items 1,457.7 102.6 1,489.8 113.2
Non-underlying items (note 7) - (5.3) - (7.3)
1,457.7 97.3 1,489.8 105.9
As at 30 June 2025
Segment Segment Capital Capital Depreciation Tangible and
assets liabilities employed additions and intangible
£m £m £m £m amortisation(2) assets(3)
£m £m
North America 911.6 (332.4) 579.2 18.4 28.1 316.1
Europe and Middle East 421.7 (282.1) 139.6 11.1 17.4 156.9
Asia-Pacific 154.3 (104.4) 49.9 7.0 5.5 66.5
1,487.6 (718.9) 768.7 36.5 51.0 539.5
Central items and eliminations(1) 239.7 (429.7) (190.0) - 1.6 3.5
1,727.3 (1,148.6) 578.7 36.5 52.6 543.0
As at 30 June 2024
Segment Segment Capital Capital Depreciation Tangible and
assets liabilities employed additions and intangible
£m £m £m £m amortisation(2) assets(3)
£m £m
North America 965.2 (344.4) 620.8 23.9 27.4 348.7
Europe and Middle East 393.0 (290.1) 102.9 9.6 19.0 153.7
Asia-Pacific 169.3 (104.6) 64.7 4.1 7.0 67.8
1,527.5 (739.1) 788.4 37.6 53.4 570.2
Central items and eliminations(1) 277.6 (510.9) (233.3) - 0.6 4.8
1,805.1 (1,250.0) 555.1 37.6 54.0 575.0
As at 31 December 2024
Segment Segment Capital Capital Depreciation Tangible and
assets liabilities employed additions and intangible
£m £m £m £m amortisation(2) assets(3)
£m £m
North America 974.7 (357.7) 617.0 46.3 56.8 348.3
Europe and Middle East 380.4 (282.8) 97.6 28.2 36.2 151.8
Asia-Pacific 153.0 (100.5) 52.5 13.9 13.7 68.4
1,508.1 (741.0) 767.1 88.4 106.7 568.5
Central items and eliminations(1) 282.6 (453.0) (170.4) - 2.1 4.1
1,790.7 (1,194.0) 596.7 88.4 108.8 572.6
(1 ) Central items include net debt and tax balances, which are
managed by the Group.
(2 ) Depreciation and amortisation excludes amortisation of
acquired intangible assets.
(3 ) Tangible and intangible assets comprise goodwill, intangible
assets and property, plant and equipment.
( )
5. Revenue
The Group's revenue is derived from contracts with customers. In the following
table, revenue is disaggregated by primary geographical market, being the
Group's operating segments (see note 4) and timing of revenue recognition:
Half year to 30 June 2025 Half year to 30 June 2024
Revenue recognised on performance obligations satisfied over time Revenue recognised on performance obligations satisfied at a point in time Total Revenue recognised on performance obligations satisfied over time Revenue recognised on performance obligations satisfied at a point in time Total
£m £m revenue £m £m revenue
£m £m
North America 717.7 150.1 867.8 707.5 176.3 883.8
Europe and Middle East 408.3 - 408.3 418.9 - 418.9
Asia-Pacific 181.6 - 181.6 187.1 - 187.1
1,307.6 150.1 1,457.7 1,313.5 176.3 1,489.8
6. Acquisitions and disposals
Acquisitions
There were no acquisitions during the half year ended 30 June 2025 or 2024.
Disposals
There were no disposals during the half year ended 30 June 2025.
On 28 June 2024, the Group disposed of its South African operation, being 100%
of the issued share capital of Keller Geotechnics SA (Pty) Ltd, for a cash
consideration received of £2.3m (ZAR55m). A non-underlying loss on disposal
of £0.8m (ZAR19.9m) was recognised. The business disposal cash outflow of
£4.9m relates to the disposal of the cash held by the South African
subsidiary on the disposal date of 28 June 2024. The sale proceeds of £2.3m
were received in the first week of July 2024 and were therefore not reflected
in the cash flow statement for the half year period to 30 June 2024.
7. Non-underlying items
Non-underlying items include items which are exceptional by their size and/or
are non-trading in nature, including amortisation of acquired intangibles,
restructuring costs and other non-trading amounts, including those relating to
acquisitions and disposals. Tax arising on these items, including movement in
deferred tax assets arising from non-underlying provisions, is also classified
as a non-underlying item. These are detailed below.
As underlying results include the benefits of restructuring programmes and
acquisitions but exclude significant costs (such as major restructuring costs
and the amortisation of acquired intangible assets) they should not be
regarded as a complete picture of the Group's financial performance, which is
presented in its total statutory results. The exclusion of non-underlying
items may result in underlying earnings being materially higher or lower than
total statutory earnings. In particular, when significant impairments and
restructuring charges are excluded, underlying earnings will be higher than
total statutory earnings.
Half year to Half year to
30 June 30 June
2025 2024
£m £m
ERP implementation costs (4.1) (2.5)
Exceptional restructuring costs (0.6) (3.3)
Loss on disposal of business - (0.8)
Non-underlying items in operating costs (4.7) (6.6)
(0.8) (1.5)
Amortisation of acquired intangible assets
Change in fair value of contingent consideration - 0.8
Contingent consideration received 0.2 -
Non-underlying items in other operating income 0.2 0.8
Total non-underlying items in operating profit and before taxation (5.3) (7.3)
Taxation 0.8 1.0
Total non-underlying items after taxation (4.5) (6.3)
Non-underlying items in operating costs
ERP implementation costs
The Group is continuing the strategic project to implement a new cloud
computing enterprise resource planning (ERP) system across the Group. Due to
the size, nature and incidence of the relevant costs expected to be incurred,
the costs are presented as a non-underlying item, as they are not reflective
of the underlying performance of the Group. As this is a complex
implementation, project costs are expected to be incurred for a further three
years. Non-underlying ERP costs of £4.1m (H1 2024: £2.5m) include only costs
relating directly to the implementation, including external consultancy costs
and the cost of the dedicated implementation team. Non-underlying costs does
not include operational post-deployment costs such as licence costs for
businesses that have transitioned.
Exceptional restructuring costs
Exceptional restructuring costs comprise £0.6m in respect of the Group's
finance transformation project.
In 2024, the exceptional restructuring costs comprised £3.5m in respect of
the Group's finance transformation project, which will move certain finance
activities into internal shared service centres, and a £0.2m credit from a
reduction in a restructuring provision recognised as a non-underlying cost in
a prior period.
The Group exercises judgement in assessing whether restructuring items should
be classified as non-underlying. This assessment covers the nature of the
item, cause of the occurrence and scale of impact of that item on the reported
performance. Typically, management will categorise restructuring costs
incurred to exit a specific geography as non-underlying. In addition,
restructuring programmes which are incremental to normal operations undertaken
to add value to the business are included in non-underlying items.
Loss on disposal of business
The loss on disposal of business in the prior period arises from the Group's
disposal of its South African operation in June 2024, resulting in a loss on
disposal of £0.8m.
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets of £0.8m relates to the
amortisation charge on assets acquired in the RECON acquisition. The
amortisation for the half year ended 30 June 2024 of £1.5m related to the
RECON, Moretrench, GKM and NWF acquisitions.
Non-underlying items in other operating income
Change in fair value of contingent consideration
The non-underlying other operating income of £0.8m from a change in fair
value of the contingent consideration in the prior period related to the GKM
Consultants acquisition.
Contingent consideration received
The first instalment of contingent consideration of £0.2m in respect of the
South African business disposal in 2024 was received in the period.
Non-underlying taxation
The credit relates to the tax benefit of amounts which are expected to be
deductible for tax purposes.
8. Taxation
The effective tax rate on the Group's underlying profit of 23% (H1 2024: 26%)
is calculated using management's best estimate of the average annual effective
income tax rate expected for the full year. The average is calculated using
the weighted average profit at jurisdictional rates which differ from the tax
rate in the UK of 25%. The tax rate is in line with the full year rate for FY
2024 of 23%, reflecting the expected tax rate based on the forecasted full
year profit mix across the Group.
The tax credit on non-underlying items has been calculated by assessing the
tax impact of each component of the charge to the income statement in the
interim accounts and applying the jurisdictional tax rate that applies to that
item.
The decrease in deferred tax assets from 31 December 2024 to 30 June 2025 is
largely as a result of the change in US law as enacted under the One Big
Beautiful Bill Act which now allows for full expensing of R&D expenditure
(previously R&D expenditure was required to be capitalised for tax
purposes and amortised over five years). The deferred tax asset previously
resulting from the capitalised R&D expenditure is expected to fully unwind
over the next four years.
The Group is subject to taxation in over 40 countries worldwide and the risk
of changes in tax legislation and interpretation from tax authorities in the
jurisdictions in which it operates. The assessment of uncertain positions is
subjective and subject to management's best judgement of the probability of
the outcome in reaching agreement with the relevant tax authorities. Where tax
positions are uncertain, provision is made where necessary based on
interpretation of legislation, management experience and appropriate
professional advice. Management does not expect the outcome of these estimates
to be materially different from the position taken.
The UK government enacted Finance (No 2) Act 2023 on 11 July 2023, which
includes the Pillar Two legislation introducing a multinational top-up tax and
a domestic minimum top-up tax in line with the minimum 15% rate in the OECD's
Pillar Two rules. The rules have applied to the Group since 1 January 2024. As
Keller Group plc constitutes the ultimate parent entity ("UPE") of the
entities consolidated within its consolidated financial statements, it is
required to calculate the jurisdictional effective tax rates for the
constituent entities within the Group in accordance with the multinational
top-up tax rules. As the UPE, Keller Group plc will be required to pay a
top-up tax in the UK on any excess profits, as defined, of its subsidiaries
that are taxed at an effective rate of less than 15%. The UK legislation has
also adopted the OECD's transitional Pillar Two safe harbour rules which, if
applicable, will deem the top-up tax for a jurisdiction to be nil based on
available Country-by-Country Reporting data.
The Group has performed an assessment of the potential exposure to
multinational top-up tax, and specifically the application of the transitional
safe harbour rules based on the actual performance to 31 May 2025 and the
forecasted financial data for the balance of FY 2025 (i.e. the 5+7 forecast).
Based on the assessment, the transitional safe harbour rules apply for most of
the jurisdictions in which the Group operates. There are however a limited
number of jurisdictions where the transitional safe harbour relief may not
apply, and the effective tax rate is below the 15% threshold. The Group does
not expect a material exposure to multinational top-up taxes for these
jurisdictions.
The Group has applied the exemption in the amendments to IAS 12 (issued in May
2023) and has neither recognised nor disclosed information about deferred tax
assets or liabilities relating to Pillar Two income taxes.
9. Dividends
Ordinary dividends on equity shares:
Half year to Half year to Year to
30 June 30 June 31 December 2024
2025 2024 £m
£m £m
Amounts recognised as distributions to equity holders in the period:
Interim dividend for the year ended 31 December 2024 of 16.6p per share - -
12.0
Final dividend for the year ended 31 December 2024 of 33.1p per share 23.3 - -
Final dividend for the year ended 31 December 2023 of 31.3p per share - 22.6 22.6
23.3 22.6 34.6
The 2024 final dividend of £23.3m was paid on 20 June 2025. The 2023 final
dividend of £22.6m was paid on 25 June 2024.
In addition to the above, an interim ordinary dividend of 18.3p per share (H1
2024: 16.6p) will be paid on 12 September 2025 to shareholders on the register
at 15 August 2025. This proposed dividend has not been included as a liability
in these financial statements and will be accounted for in the period in which
it is paid.
10. Earnings per share
Basic earnings per share is calculated by dividing the profit for the year
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year.
When the Group makes a profit, diluted earnings per share equals the profit
attributable to equity holders of the parent divided by the weighted average
diluted number of shares. When the Group makes a loss, diluted earnings per
share equals the loss attributable to the equity holders of the parent divided
by the basic average number of shares. This ensures that earnings per share on
losses is shown in full and not diluted by unexercised share awards.
Basic and diluted earnings per share are calculated as follows:
Underlying earnings attributable to the equity holders Statutory earnings attributable to equity holders of the parent
of the parent
Half year to Half year to Half year to Half year to
30 June 30 June 30 June 30 June
2025 2024 2025 2024
Profit available for equity holders (£m) 70.9 75.8 66.4 69.5
Weighted average number of shares (m)(1)
Basic number of ordinary shares outstanding 71.1 72.3 71.1 72.3
Effect of dilution from:
Share options and awards 1.2 1.1 1.2 1.1
Diluted number of ordinary shares 72.3 73.4 72.3 73.4
Earnings per share
Basic earnings per share (p) 99.7 104.8 93.4 96.1
Diluted earnings per share (p) 98.1 103.3 91.8 94.7
( )
(1 ) The weighted average number of shares takes
into account the weighted average effect of changes in treasury shares during
the year. The weighted average number of shares excludes those held in the
Employee Share Ownership Plan Trust and those held in treasury, which for the
purpose of this calculation are treated as cancelled.
11. Property, plant and equipment
Property, plant and equipment comprises owned and leased assets.
As at As at As at
30 June 30 June 31 December 2024
2025 2024 £m
£m £m
Property, plant and equipment - owned 355.5 370.0 371.5
Right-of-use assets - leased 85.4 91.7 89.9
440.9 461.7 461.4
During the period to 30 June 2025, the Group acquired owned property, plant
and equipment with a cost of £36.5m (30 June 2024: £37.6m;
31 December 2024: £89.0m). Right-of-use asset additions during the period
were £9.4m (30 June 2024: £14.1m; 31 December 2024: £26.4m).
Owned assets with a net book value of £4.6m were disposed of during the half
year to 30 June 2025 (30 June 2024: £8.2m; 31 December 2024: £13.8m),
resulting in a net gain on disposal of £3.9m (30 June 2024: £6.3m; 31
December 2024: £12.8m).
12. Analysis of closing net debt
As at As at As at
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Bank balances 114.0 112.9 116.1
Short-term deposits 42.6 83.6 91.6
Cash and cash equivalents in the balance sheet 156.6 196.5 207.7
Bank overdrafts (1.7) (2.3) -
Cash and cash equivalents in the cash flow statement 154.9 194.2 207.7
Bank and other loans (215.3) (294.5) (236.6)
Lease liabilities (93.1) (98.7) (98.0)
Closing net debt (153.5) (199.0) (126.9)
Cash and cash equivalents include £7.2m (30 June 2024: £6.8m, 31 December
2024: £5.0m) of the Group's share of cash and cash equivalents held by joint
operations.
13. Assets held for sale
As at As at As at
30 June 30 June 31 December 2024
2025 2024 £m
£m £m
Assets held for sale 1.1 13.0 9.2
At 30 June 2025, assets held for sale comprised of various cranes and
equipment in Saudi Arabia costing £1.0m and various cranes and equipment in
Australia costing £0.1m. During the period, assets previously classified as
held for sale with a carrying amount of £4.5m were reclassified back to
property, plant and equipment, as the criteria for classification as held for
sale were no longer met. This included £3.8m comprising four rigs in Keller
Arabia, and the residual balance held in Keller Austral.
14. Retirement benefit liabilities
The Group operates pension schemes in the UK and overseas, including a defined
benefit scheme in the UK. The Group also has defined benefit retirement
obligations in Germany and Austria and a number of end of service schemes in
the Middle East that follow the same principles as a defined benefit scheme.
For further information on the Group's pension schemes, refer to note 33 of
the Group's financial statements for the year ended 31 December 2024.
The Group's net defined benefit liabilities as at 30 June 2025 were £15.3m
(30 June 2024: £16.0m; 31 December 2024: £15.2m). The net charge to the
income statement was £nil (30 June 2024: £0.1m) and no significant actuarial
change was recognised in the comprehensive income during the period to 30 June
2025 (30 June 2024: £nil).
The net defined liability for the Keller Group Pension Scheme in the UK as at
30 June 2025 was £nil (30 June 2024: £0.2m; 31 December 2024: £nil), being
the minimum funding requirement, calculated using the agreed contributions.
In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees
II Limited) ruled that certain historical amendments for contracted-out
defined benefit schemes were invalid if they were not accompanied by the
correct actuarial confirmation notice. The case was subsequently reviewed by
the Court of Appeal in July 2024 which upheld the High Court's decision. The
Keller Group Pension Scheme was contracted out of the additional state pension
between 1997 and 2016. Following a review of the scheme amendments during
the relevant period, the Group has not identified any amendments where further
investigation is required as a result of that Court of Appeal judgement.
15. Financial assets and financial liabilities
Set out below is an overview of financial assets and liabilities held by the
Group:
As at As at As at
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Financial assets measured at fair value through profit or loss
Non-qualifying deferred compensation plan 19.3 22.0 23.2
Financial assets measured at amortised cost
Trade receivables 559.1 593.3 575.1
Contract assets 154.8 135.2 119.2
Cash and cash equivalents 156.6 196.5 207.7
Financial liabilities at fair value through profit or loss
Contingent consideration payable (2.4) (8.5) (3.2)
Forward contracts (0.4) (0.3) (0.7)
Financial liabilities measured at amortised cost
Deferred consideration payable - (0.6) -
Trade payables (183.6) (199.7) (168.0)
Contract liabilities (92.3) (119.6) (115.2)
Bank and other loans and bank overdrafts (217.0) (296.8) (236.6)
Lease liabilities (93.1) (98.7) (98.0)
Fair values
The fair values of the Group's financial assets and liabilities are not
materially different from their carrying values. The following summarises the
major methods and assumptions used in estimating the fair values of financial
instruments, being derivatives, interest-bearing loans and borrowings,
contingent and deferred consideration and payables, receivables and contract
assets, cash and cash equivalents.
Contingent and deferred consideration
Fair value is calculated based on the amounts expected to be paid, determined
by reference to forecasts of future performance of the acquired businesses
discounted using appropriate discount rates prevailing at the balance sheet
date and the probability of contingent events and targets being achieved. The
valuation methods of the Group's contingent consideration carried at fair
value are categorised as Level 3. Level 3 assets are financial assets and
liabilities that are considered to be the most illiquid. Their values have
been estimated using available management information including subjective
assumptions. There are no individually significant unobservable inputs used in
the fair value measurement of the Group's contingent consideration as at 30
June 2025.
On 29 August 2023, the Group acquired the 35% interest in the voting shares of
Keller Turki Company Limited. A contingent consideration is payable annually
until 2027, dependent on the qualifying revenue generated by the business for
each of those years. During the period to 30 June 2025, £0.5m (30 June 2024:
£0.7m; 31 December 2024: £0.7m) contingent consideration was paid.
During the period to 30 June 2024, the contingent consideration relating to
the acquisition of GKM Consultants Inc. of £0.8m was released.
Payables, receivables and contract assets
For payables, receivables and contract assets with an expected maturity of one
year or less, the carrying amount is deemed to reflect the fair value.
Non-qualifying deferred compensation plan
The value of both the employee investments and those held in trust by the
company are measured using Level 1 inputs per IFRS 13 ('quoted prices in
active markets for identical assets or liabilities that the entity can access
at the measurement date') based on published market prices at the end of the
period. Adjustments to the fair value are recorded within net finance costs in
the consolidated income statement. Refer to note 18 of the Group's financial
statements for the year ended 31 December 2024 for further information on the
non-qualifying deferred compensation plan.
16. Share capital and reserves
As at As at As at
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Allotted, called up and fully paid equity share capital 7.3 7.3 7.3
73,099,735 ordinary shares of 10p each
(30 June 2024 and 31 December 2024: 73,099,735)
The company has one class of ordinary shares, which carries no rights to fixed
income. There are no restrictions on the transfer of these shares.
The capital redemption reserve of £7.6m is a non-distributable reserve
created when the company's shares were redeemed or purchased other than from
the proceeds of a fresh issue of shares.
The other reserve of £56.9m is a non-distributable reserve created when
merger relief was applied to an issue of shares under section 612 of the
Companies Act 2006 to part-fund the acquisition of Keller Canada. The reserve
becomes distributable should Keller Canada be disposed of.
At 30 June 2025, the total number of shares held in treasury was 1,811,768 (30
June 2024: 123,153; 31 December 2024: 123,153). Following the share buyback
programme launched on 31 March 2025, 1,694,970 shares have been purchased
(£25.2m), which are held in treasury and have not been cancelled.
Additionally, 6,355 shares were issued to satisfy vested share awards.
During the period to 30 June 2025, 253,175 ordinary shares were purchased by
the Keller Group Employee Benefit Trust (30 June 2024: 422,863), to be used to
satisfy future obligations of the company under the Keller Group plc Long Term
Incentive Plan, and 654,533 shares were utilised to satisfy the obligation in
the period (30 June 2024: 250,736). This brings the total number of ordinary
shares held by the Keller Group Employee Benefit Trust to 1,163,322 (30 June
2024: 709,298). The cost of the market purchases in the period was £3.6m (30
June 2024: £6.5m).
17. Related party transactions
Transactions between the parent, its subsidiaries and joint operations, which
are related parties, have been eliminated on consolidation.
There are no other material related party transactions.
18. Post balance sheet events
There were no material post balance sheet events between the balance sheet
date and the date of this report.
Adjusted performance measures
The Group's results as reported under International Financial Reporting
Standards (IFRS) and presented in the interim condensed consolidated financial
statements (the 'statutory results') are significantly impacted by movements
in exchange rates relative to sterling, as well as by exceptional items and
non-trading amounts including those relating to acquisitions and disposals.
Adjusted performance measures have been used throughout this report to
describe the Group's underlying performance. The Board and Executive Committee
use these adjusted measures to assess the performance of the business as they
consider them more representative of the underlying ongoing trading result and
allow more meaningful comparison to prior periods.
Underlying measures
The term 'underlying' excludes the impact of items which are exceptional by
their size and/or are non-trading in nature, including amortisation of
acquired intangible assets and other non-trading amounts relating to
acquisitions and disposals (collectively 'non-underlying items'), net of any
associated tax. Underlying measures allow management and investors to compare
performance without the potentially distorting effects of one-off items or
non-trading items. Non-underlying items are disclosed separately in the
interim financial statements where it is necessary to do so to provide further
understanding of the financial performance of the Group.
Constant currency measures
The constant currency basis ('constant currency') adjusts the comparative to
exclude the impact of movements in exchange rates relative to sterling. This
is achieved by retranslating the 2024 results of overseas operations into
sterling at the 2025 average exchange rates.
A reconciliation between the underlying results and the reported statutory
results is shown on the face of the condensed consolidated income statement,
with non-underlying items detailed in note 7. A reconciliation between the
2024 underlying result to the 2024 constant currency result is shown below and
compared to the underlying 2025 performance:
Revenue by segment
Statutory Statutory Impact of exchange movements Constant Statutory Constant
2025 2024 2024 currency change currency
2024 change
£m £m £m £m % %
North America 867.8 883.8 (22.9) 860.9 -2% +1%
Europe and Middle East 408.3 418.9 (7.1) 411.8 -3% -1%
Asia-Pacific 181.6 187.1 (10.7) 176.4 -3% +3%
Group 1,457.7 1,489.8 (40.7) 1,449.1 -2% +1%
Underlying operating profit by segment
Underlying Underlying Impact of exchange movements Constant Underlying Constant
2025 2024 2024 currency change currency
£m £m £m 2024 % change
£m %
North America 82.1 105.8 (2.5) 103.3 -22% -21%
Europe and Middle East 14.6 3.0 (0.3) 2.7 +387% +441%
Asia-Pacific 13.9 11.1 (0.9) 10.2 +25% +36%
Central items (8.0) (6.7) - (6.7) +19% +19%
Group 102.6 113.2 (3.7) 109.5 -9% -6%
Underlying operating margin
Underlying operating margin is underlying operating profit as a percentage of
revenue.
Other adjusted measures
Where not presented and reconciled on the face of the interim condensed
consolidated income statement, balance sheet or cash flow statement, the
adjusted measures are reconciled to the IFRS statutory numbers below:
EBITDA (statutory)
30 June 30 June
2025 2024
£m £m
Underlying operating profit 102.6 113.2
Depreciation and impairment of owned property, plant and equipment 37.1 39.0
Depreciation and impairment of right-of-use assets 15.5 14.9
Amortisation of intangible assets - 0.1
Underlying EBITDA 155.2 167.2
Non-underlying items in operating costs (4.7) (6.6)
Non-underlying items in other operating income 0.2 0.8
EBITDA 150.7 161.4
EBITDA (IAS 17 covenant basis)
30 June 30 June
2025 2024
£m £m
Underlying operating profit 102.6 113.2
Depreciation and impairment of owned property, plant and equipment 37.1 39.0
Depreciation and impairment of right-of-use assets 15.5 14.9
Legacy IAS 17 operating lease charges (18.5) (17.2)
Amortisation of intangible assets - 0.1
Underlying EBITDA 136.7 150.0
Non-underlying items in operating costs (4.7) (6.6)
Non-underlying items in other operating income 0.2 0.8
EBITDA 132.2 144.2
( )
Net finance costs
30 June
2025 30 June
2024
£m £m
Finance income (2.8) (3.2)
Finance costs 12.7 13.8
Net finance costs (statutory) 9.9 10.6
Finance charge on lease liabilities(1) (3.2) (2.9)
Lender covenant adjustments - 0.1
Net finance costs (IAS 17 covenant basis) 6.7 7.8
(1 ) Excluding legacy IAS 17 finance leases.
Net capital expenditure
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Acquisition of property, plant and equipment 36.5 37.6 89.0
Acquisition of intangible assets - - -
Proceeds from sale of property, plant and equipment (9.2) (14.5) (29.0)
Net capital expenditure(1) 27.3 23.1 60.0
( )
(1 ) Net capital expenditure excludes right-of-use assets.
Net debt
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Current loans and borrowings 29.1 88.6 27.5
Non-current loans and borrowings 281.0 306.9 307.1
Cash and cash equivalents (156.6) (196.5) (207.7)
Net debt (statutory) 153.5 199.0 126.9
Lease liabilities(1) (92.0) (98.3) (97.4)
Net debt (IAS 17 covenant basis) 61.5 100.7 29.5
(1 ) Excluding legacy IAS 17 finance leases.
Leverage ratio
The leverage ratio is calculated as net debt to underlying EBITDA.
Statutory 31 December
30 June 30 June 2024
2025 2024 £m
£m £m
Net debt 153.5 199.0 126.9
Underlying EBITDA (last 12 months) 309.4 339.2 321.4
Leverage ratio (x) 0.5 0.6 0.4
IAS 17 covenant basis 31 December
30 June 30 June 2024
2025 2024 £m
£m £m
Net debt 61.5 100.7 29.5
Underlying EBITDA (last 12 months) 273.8 304.9 287.1
Leverage ratio (x) 0.2 0.3 0.1
Order book
The Group's disclosure of its order book is aimed to provide insight into its
backlog of work and future performance. The Group's order book is not a
measure of past performance and therefore cannot be derived from its financial
statements. The Group's order book comprises the unexecuted elements of orders
on contracts that have been awarded. Where a contract is subject to
variations, only secured variations are included in the reported order book.
IFRS 16 gearing
31 December
30 June 30 June 2024
2025 2024 £m
£m £m
Net debt (statutory) 153.5 199.0 126.9
Net assets 578.7 555.1 596.7
Gearing 27% 36% 21%
Free cash flow
The calculation of free cash flow is set out in the Chief Financial Officer's
section of the Strategic report and is reconciled to movements in the
consolidated cash flow statement and other movements in net debt as set out
below.
31 December
30 June 30 June 2024
2025 2024 £m
£m £m
Net cash inflow from operating activities 41.8 118.9 265.9
Net cash outflow from investing activities (21.9) (26.0) (57.7)
Exclude: - 0.1 (1.4)
Cash inflows from non-underlying items - contract dispute
Cash inflows from non-underlying items - ERP costs 3.4 2.4 4.9
Cash inflows from non-underlying items - restructuring costs 0.6 2.5 4.9
Acquisition of subsidiaries, net of cash acquired 0.5 0.7 0.9
Disposal of subsidiaries (0.2) 4.9 2.6
Include: (9.4) (14.2) (26.4)
Increase in net debt from new leases
Increase in net debt from amortisation of deferred finance costs (0.5) (0.7) (1.1)
Free cash flow 14.3 88.6 192.6
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