REG - Keller Group PLC - Preliminary Results for the year ended 31 Dec 2025
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RNS Number : 0250V Keller Group PLC 03 March 2026
3 March 2026
Keller Group plc audited Preliminary Results for the year ended 31 December
2025
Keller Group plc ('Keller' or 'the Group'), the world's largest geotechnical
specialist contractor, announces its results for the year ended 31 December
2025.
Record financial performance ahead of expectations; significantly increased
dividend and intention to launch further £100m share buyback
2025 2024 % change Constant currency
£m £m % change
Revenue 3,087.3 2,986.7 +3.4% +5.9%
Underlying operating profit(1) 218.2 212.6 +2.6% +6.5%
Underlying operating profit margin(1) 7.1% 7.1% -
Underlying profit before tax(1) 197.3 191.4 +3.1%
Underlying diluted earnings per share(1) 211.3 199.9p +5.7%
Free cashflow 175.9 192.6 -8.7%
Net (cash)/debt (bank covenant IAS 17 basis)(2) (59.7) 29.5 -
Total dividends for the year per share 70.4p 49.7p +41.6%
Statutory operating profit 207.3 205.1 +1.1%
Statutory profit before tax 186.4 183.9 +1.4%
Statutory diluted earnings per share 198.7 193.3p +2.8%
Net cash inflow from operating activities 258.4 265.9 -2.9%
Statutory net debt (IFRS 16 basis) 28.9 126.9 -77.2%
(1) (Underlying operating profit, underlying profit before tax 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 9 of the 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
consolidated financial statements)
Highlights
· Record financial result, reflecting sustained improvement in
operational and financial performance and the Group's geographic diversity,
sector agility and resilience
· NA: revenue growth outperformed the wider US construction market
driven by infrastructure spend. Resilient profit performance reflected
exceptional prior period and softer US residential market as anticipated
· EME: strong recovery driven by non-recurrence of ME project loss
and operational improvements across Europe
· APAC: Strong growth in Austral and Keller Asia
· Group revenue growth at CER of 5.9% to £3.1bn, despite mixed
market backdrop
· Underlying operating profit increased by 2.6% to £218.2m after a
translational FX headwind of £7.8m
· Underlying operating margin maintained at 7.1% against a strong
comparative period, reflecting embedded commercial and operational
improvements
· Underlying diluted EPS of 211.3p, up 5.7%, driven by higher
profitability, lower finance costs and share buyback
· Underlying ROCE increased to 30.7% (2024: 28.2%), the highest for
17 years
· Net cash position of £59.7m, the first time in more than 25
years, following free cash generation of £175.9m
· Strong year-end order book maintained at £1.5bn CER; high
tendering levels and good visibility into 2026
· Accident Frequency Rate reduced to 0.04 with 11 lost time
injuries (2024: 0.05; 14 lost time injuries)
· Enhanced strategic focus on accelerating growth by increasing
relative market share in our existing markets
· Capital allocation review reflecting structural improvement in
cash generation, including:
· Enhanced dividend policy with a target cover range of 2.5x -
3.5x, resulting in a final dividend of 52.1p, bringing total for the year to
70.4p (2024: 49.7p) an increase of 41.6%
· Intention to launch a further £100m to be returned through the
share buyback programme
James Wroath, Chief Executive Officer, said:
"It has been a privilege to take on the leadership of the Group at a time of
such strong performance and clear opportunity. The financial results in 2025
were another record, achieved despite a mixed market backdrop and a FX
translational headwind.
Keller's outstanding financial performance, strong balance sheet and cash
generation were a key attraction for me in joining. The Group has a compelling
proposition for all our stakeholders and I am optimistic about the scale of
opportunity ahead on which Keller is uniquely positioned to capitalise. We
have a focused business model with market-leading positions in key geographies
and highly-experienced people with deep engineering expertise to deliver
solutions for our customers.
Having reviewed the strategic work undertaken prior to my appointment, the
central conclusion is the importance of local market share as the key driver
of earnings. Our growth strategy will therefore be to enhance our position in
our chosen markets by continuing to offer solutions backed by our product and
engineering capability and by targeting higher growth customer segments whilst
maintaining our margin discipline. This will be enabled by further investing
in our people and maintaining our focus on safety and sustainability.
Looking ahead, while we remain mindful of macroeconomic uncertainty, the Group
enters the new financial year with a high quality order book, healthy
tendering activity, strong balance sheet and a clear strategic direction. The
management actions that underpin Keller's improved operational and financial
performance in recent years have now been embedded across the Group, giving me
confidence that our operational performance is sustainable. This confidence
underpins the enhanced dividend policy and ongoing commitment to shareholder
value creation, reflected in the significant increase in the final dividend
and our intention to launch a further £100m of share buybacks in 2026.
With the demand for our services supported by favourable long-term structural
growth drivers including infrastructure investment, population growth, energy
transition, climate resilience and technology adoption, we remain confident
that the Group is well placed to build on its momentum and deliver further
progress in 2026 and in the years ahead".
For further information, please contact: www.keller.com (http://www.keller.com)
Keller Group plc 020 7616 7575
James Wroath, Chief Executive Officer
David Burke, Chief Financial Officer
Caroline Crampton, Group Head of Investor Relations
Nicola Rogers, Investor Relations
FTI Consulting 020 3727 1340
Nick Hasell
Matthew O'Keeffe
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The Annual Report and Accounts for the year ended 31 December 2025 will be
published on the Company's website at keller.com on 24 March 2026 and will be
posted to shareholders in April 2026 alongside the notice of AGM.
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
will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements. These factors include, but are
not limited to, changes in the economies and markets in which the Group
operates; changes in the regulatory and competition frameworks in which the
Group operates; the impact of legal or other proceedings against or which
affect the Group; and changes in interest and exchange rates. For a more
detailed description of these risks, uncertainties and other factors, please
see the Principal risks and uncertainties section of the Strategic report in
the Annual Report and Accounts. All written or verbal forward
looking-statements, made in this document or made subsequently, which are
attributable to Keller or any other member of the Group or persons acting on
their behalf are expressly qualified in their entirety by the factors referred
to above. Keller does not intend to update these forward-looking statements.
Nothing in this document should be regarded as a profits forecast. This
document is not an offer to sell, exchange or transfer any securities of
Keller Group plc or any of its subsidiaries and is not soliciting an offer to
purchase, exchange or transfer such securities in any jurisdiction. Securities
may not be offered, sold or transferred in the United States absent
registration or an applicable exemption from the registration requirements of
the US Securities Act.
LEI number: 549300QO4MBL43UHSN10. Classification: 1.1 (Annual financial and
audit reports)
Adjusted performance measures
In addition to statutory measures, a number of adjusted performance measures
(APMs) are included in this Preliminary 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. 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. Free cash flow and free cash flow
before interest and tax to underlying operating profit (operating cash
conversion) are measures used to assess the cash generation of the business.
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.
Chief Executive Officer's review
Overview
In 2025, Keller achieved another year of record financial results, reflecting
our diverse geographical and end-market footprint, together with continued
operational and financial improvement across the Group. Whilst the
macro-economic environment presented challenges, it also created opportunities
for Keller to adapt and innovate in how we serve our customers. Demand for our
expertise remained robust, supported by long-term structural drivers including
infrastructure investment, population growth, energy transition, climate
resilience and technology adoption. Our focus on customer segments benefitting
from these growth drivers has given us a diversified contract portfolio and
order book, which has more than offset the subdued conditions we have seen in
some markets. Alongside this, our disciplined risk management and enhanced
focus on operational execution has supported our financial performance, which
is reflected in our resilient margins and strong cash generation.
Financial performance
Over the period from 2022 to 2025 Keller has doubled its underlying operating
profit and delivered a 340bps, improvement in underlying operating margin. In
2025, this margin was maintained at 7.1%, despite the non-repeat of
exceptional market conditions in North America in the prior year,
demonstrating how the improvement in operational performance has been
successfully embedded and extended across the business.
In 2025, Group revenue increased by 5.9% to £3,087.3m (on a constant currency
basis), driven by robust demand across a number of specific segments within
each of our regions.
Underlying operating profit rose to £218.2m, up 6.5% (on a constant currency
basis), reflecting continued focus on operational execution and contract
pricing discipline. This was most evident in a significant improvement in
profitability in our Europe and Middle East business, which more than offset
the expected year-on-year profit headwind at Suncoast in North America (the
Group's post tension business predominantly exposed to the US residential
sector). Underlying operating profit improvement was also achieved on a
reported basis, after a translational FX headwind of £7.8m.
Underlying diluted earnings per share grew by 5.7%, to 211.3p, reflecting the
impact of higher profitability, lower finance costs and the share buyback.
Free cash flow remained strong at £175.9m, enabling continued investment in
the business and the initiation of a multi-year share buyback programme. The
Group ended the year with net cash (on IAS 17 lender covenant basis) of
£59.7m (2024: net debt of £29.5m), which is below the lower end of our
target leverage range of 0.5x-1.5x.
Return on capital employed in 2025 was 30.7% (2024: 28.2%), the highest for 17
years.
Capital allocation
Given the significant improvement in the Group's operational and financial
performance over the last three years, the Board has undertaken a review of
the Group's capital allocation to support the Group's medium and long term
value creation opportunity and deliver its growth strategy whilst maintaining
appropriate financial resilience and capital discipline. The Group's leverage
target range through the cycle will remain a net debt to EBITDA ratio of 0.5x
- 1.5x which provides the right balance between capital efficiency, the
capital requirements of the business and significant financial flexibility and
headroom. The Group's capital allocation priorities are:
· Investing in organic growth
The Group will continue to invest in the business through working capital and
capex to ensure that it can execute its growth strategy and capitalise on
organic opportunities across its core geographic markets. Growth will be
driven through organic initiatives, including investment in people, technology
and solution capability.
· Paying an attractive and growing dividend
The Group has a 31 year track record of maintaining or growing its dividend
since its listing on the stock market. Reflecting the evolving maturity of the
business and the improved predictability of its free cash flow, the Board has
adopted an enhanced dividend policy which will deliver a sustainable and
progressively growing dividend within a target cover range of 2.5x - 3.5x.
As a result, the Board is recommending a step change in the 2025 final
dividend of 52.1p (2024: 33.1p). This brings the total dividend for the year
to 70.4p (2024: 49.7p), an increase of 41.6% and representing a dividend cover
of 3.0x (2024: 4.0x) in line with the new policy. If approved, the proposed
2025 final dividend of 52.1p will be paid on 26 June 2026 to shareholders on
the register at the close of business on 29 May 2026.
· Value-enhancing M&A
We believe there is an opportunity to accelerate our strategic plans and
further enhance our market positions through selective acquisitions. The value
case for all potential acquisitions will be judged carefully, on the basis of
clear financial and strategic criteria. The Board believes this organic and
inorganic approach offers the most compelling risk-adjusted returns, allowing
Keller to leverage its established customer relationships, technical expertise
and operational scale and to drive earnings growth.
· Returning surplus capital
In March 2025, the Group announced a multi-year share buyback programme and
two tranches of £25m were launched during 2025. Up to 2 March 2026, £44m of
capital had been returned to shareholders through this programme. Given the
strength of the Group's free cash flow and balance sheet, the Board is
announcing an intention to launch a further £100m share buyback programme in
2026 following completion of the current £25m tranche.
The Group's capital structure and the return of surplus capital will continue
to be assessed on an ongoing basis in line with the wider capital allocation
framework.
Operational performance
In North America (NA), revenue increased by 5% to £1,815.7m (on a constant
currency basis), driven by Moretrench and RECON, and project wins in the US
Foundations business across a number of key segments including large
infrastructure projects and data centres. This growth more than offset lower
revenue at Suncoast as a result of both a slowdown in the residential housing
market and the anticipated normalisation of pricing. As expected, underlying
operating profit in NA decreased to £166.2m, down 9.6% (on a constant
currency basis). This was primarily driven by soft market conditions at
Suncoast and the normalisation of market conditions in the Foundations
business following a particularly buoyant market in 2024. Performance also
benefitted from some historical claim settlements in the period.
In Europe and the Middle East (EME), revenue increased by 4.1% to £873.4m (on
a constant currency basis), reflecting growth in infrastructure and commercial
segments across most regions. Underlying operating profit increased more than
four-fold to £38.8m (on a constant currency basis) as a result of the
non-recurrence of losses at a previously challenging project in the Middle
East and a strong operational improvement across our businesses in Europe. As
expected, underlying operating margin increased by 340bps to 4.4% (2024:
0.9%).
In Asia-Pacific (APAC), revenues increased by 14.6% to £398.2m (on a constant
currency basis) largely driven by higher volumes at Austral and Keller Asia,
partly offset by softer trading at Keller Australia. Underlying operating
profit increased to £30.6m, up 14.6% driven by profitable growth at Austral
and Keller Asia, and to a lesser extent the benefit of project closure
settlements at Keller Australia. The operating margin was maintained at 7.7%
(2024: 7.8%).
Strategy
The Group's growth strategy will be to focus on becoming an increasingly
strong leader in our chosen market segments, underpinned by long-term
structural growth, where it can bring an unrivalled breadth of capability to
deliver value-enhancing solutions. Relative market share (RMS) has been
identified as the key driver of earnings growth. RMS measures Keller's market
share against its leading competitor to understand competitive strength in a
market. Having an RMS of one or more indicates a strong ability to compete,
results in greater visibility of market activity and gives Keller access to a
larger number of tenders as well as an increased knowledge of customer demand.
Growth in share will be driven through a combination of organic initiatives,
including investment in people, technology and solution capability, alongside
disciplined bolt-on acquisitions where they enhance Keller's offering and meet
our strategic and financial criteria. The Board believes this approach offers
the most compelling risk-adjusted returns, allowing Keller to leverage its
established customer relationships, technical expertise and operational scale
and to drive earnings growth.
Our strategy to grow RMS across the Group for long-term value will be
supported by three strategic levers: portfolio, performance and pipeline.
Our portfolio of businesses, branch network and range of products are global
strengths that allow us to deliver in our local markets and which
differentiate us from our competition. Geographically we will operate in
markets where we see an enduring demand for our services, where we believe we
can achieve and sustain RMS growth and where there is an acceptable level of
risk. We expect favourable market trends to support demand for our services in
the long-term.
Secondly, performance is critical with price and reputation identified as our
customers' key priorities. We will create value through commercial excellence,
by offering our best solutions to our customers and by delivering projects
safely and efficiently, supported by innovation in solution delivery.
Thirdly, we will focus on pipeline to grow our business by targeting
faster-growing customer segments, selective introduction of the Group's wide
portfolio of techniques and capabilities to local markets where we see an
attractive opportunity to do so, and through bolt-on acquisitions to
accelerate organic growth.
Safety
Safety is fundamental to everything we do. Geotechnical engineering is
inherently complex, often involving challenging ground conditions, dynamic
construction environments and critical infrastructure, and it is therefore
essential that the highest standards of health and safety are embedded across
our operations. Our objective is clear: that everyone who works for, or with,
the Group returns home safely every day.
During the year, we continued to strengthen our safety culture through
investment in training, robust systems and clear accountability at all levels
of the organisation. This was reflected in the improvement in our Accident
Frequency Rate (AFR) of 0.04 (2024: 0.05), with a total of 11 lost time
incidents reported in the year, a reduction of three versus 2024. We place
particular emphasis on proactive risk identification, effective site controls
and learning from experience, supported by strong leadership and consistent
standards across the Group. Safety performance is a core measure of
operational excellence and a key consideration in decision-making, reflecting
our responsibility to our people, our clients and the communities in which we
operate.
People and culture
Our people are the foundation of our success. By strengthening leadership
capability, reinforcing our values, and aligning our collective efforts, we
continue to build a sustainable competitive advantage that supports both
near-term performance and long-term value creation. During the year, we
invested in the development of more than 50 future leaders through our
Strategic Leadership Blueprint programme, with a further cohort planned for
2026, directly supporting our succession planning and organisational
resilience.
We continue to cultivate a diverse, future-ready business by attracting and
developing talent through our culture, values, and industry leadership. In NA,
we hosted our first NextGen Construction Summit, engaging directly with
emerging talent, selecting students from numerous applicants to participate
across construction management, civil and environmental engineering
disciplines. Alongside this, we engaged with the organisation to refresh our
values to ensure they remain closely aligned to the business and clearly guide
how we lead, perform, and support our people.
Environment, Social and Governance (ESG) and Sustainability
We remain committed to our ESG objectives, investing in leading initiatives to
reach our net zero targets and advancing social impact programmes in the
communities we serve. Sustainability is integral to our strategy and a source
of long-term competitive advantage.
We are committed to reducing the carbon intensity of our work over time. Our
target continues to be net zero on Scope 2 emissions by 2030, net zero on
Scope 1 emissions by 2040 and net zero by 2050 on Operational Scope 3
emissions (covering business travel, material transport and waste disposal).
We continue to integrate sustainability considerations into project design and
capital investment and have estimated our Scope 3 emissions for the first
time.
During the year we refreshed our Code of Business Conduct, reflecting the
importance we place on our values. We now have an updated guide setting out
our key commitments for ethical behaviour, legal compliance and appropriate
decision-making to ensure integrity, reduction of risk, and to help foster a
respectful, consistent workplace culture.
Board
On 5 March Carl-Peter Forster succeeded Peter Hill as Chair. As well as his
role as Non-executive Director and Chair, Carl-Peter was appointed Chair of
the Nomination and Governance Committee.
On 24 June Michael Speakman informed the Board of his decision to step down as
CEO in order to continue with necessary medical treatment. At the same time
the Board announced the appointment of James Wroath as CEO, effective 18
August 2025.
Outlook
Looking ahead, while we remain mindful of macroeconomic uncertainty, the Group
enters the new financial year with a high quality order book, healthy
tendering activity, strong balance sheet and a clear strategic direction. The
management actions that underpin Keller's improved operational and financial
performance in recent years have now been embedded across the Group, giving me
confidence that our operational performance is sustainable. This confidence
underpins the enhanced dividend policy and ongoing commitment to shareholder
value creation, reflected in the significant increase in the final dividend
and our intention to launch a further £100m of share buybacks in 2026.
With the demand for our services supported by favourable long-term structural
growth drivers including infrastructure investment, population growth, energy
transition, climate resilience and technology adoption, we remain confident
that the Group is well placed to build on its momentum and deliver further
progress in 2026 and in the years ahead.
Operating review
North America (NA)
2025 2024 Constant currency
£m £m
Revenue 1,815.7 1,785.8 5.0%
Underlying operating profit 166.2 190.0 -9.6%
Underlying operating margin 9.2% 10.6% -140bps
Order book 1,022.3 1,130.4 -2.6%
In NA, revenue increased by 5.0% to £1,815.7m (on a constant currency basis),
driven by growth at Moretrench Industrial, RECON and Foundations. This growth
more than offset lower revenue at Suncoast as a result of both a slowdown in
the residential housing market and the anticipated normalisation of pricing
from the peaks of 2024. As expected, underlying operating profit in North
America decreased, by 9.6% to £166.2m, primarily driven by soft market
conditions at Suncoast and the normalisation of market conditions in the
Foundations business following a buoyant market in 2024, partially offset by
the benefit from some historical claim settlements in the period. The
combination of these factors resulted in an underlying operating margin of
9.2% (2024: 10.6%). The Accident Frequency Rate, our key metric for measuring
safety performance, improved to 0.02 (2024: 0.04) representing three lost time
injuries.
In the Foundations business, revenue increased driven by strong activity in
data centre construction and large infrastructure projects, including New
York's Hudson Tunnel project and Interstate 40 road improvements in Tennessee.
Underlying operating profit declined driven by margin normalisation following
a buoyant market in the prior year, partly offset by the benefit from an
historical claim. The business sustained its improvement in underlying
contract performance, project execution and commercial discipline.
At Suncoast, the Group's post-tension business predominantly exposed to the US
residential sector, revenue and profitability declined in the period as
expected, reflecting a decreased level of activity and strong pricing in the
prior period. The residential market experienced headwinds from an
unfavourable interest rate environment and higher housing prices, driving a
significant reduction in housing starts and building permits. The commercial
segment was likewise affected by elevated interest rates, in addition to the
introduction of tariffs that negatively influenced construction activity
across the sector.
Moretrench Industrial, which operates in the highly-regulated environmental
remediation market, performed strongly with high demand and beneficial levels
of productivity driving growth in revenue and profit. At RECON, our
geoenvironmental and industrial services company, volumes were higher versus
prior year driven by work on a new LNG project. The project performed well and
completed in January 2026.
North America outlook
In 2025 Keller outperformed at the revenue level versus overall US
construction that saw a decline of 2%. We achieved this through a focus on
customer segments with strong structural growth drivers such as public
infrastructure as well as investment in data centres and AI infrastructure. In
2026 US construction is expected to be flat (source: FMI) and whilst the US
residential market is expected to remain soft, Keller North America expects to
continue to outperform the market and deliver resilient margins by focussing
on key segments where structural growth is supportive. This is reflected in
the order book which, at the end of the period continued to be strong at
£1,022.3m (on a constant currency basis). We are well positioned on several
major foundations opportunities and expect to convert these into confirmed
contract awards.
Europe and Middle East (EME)
2025 2024 Constant currency
£m £m
Revenue 873.4 835.1 4.1%
Underlying operating profit 38.8 7.9 379.0%
Underlying operating margin 4.4% 0.9% 340bps
Order book 356.0 302.1 14.2%
In EME, revenue increased by 4.1% to £873.4m (on a constant currency basis)
reflecting growth across most regions. Underlying operating profit increased
more than four-fold to £38.8m (on a constant currency basis) as a result of
the non-recurrence of losses incurred on a challenging project in the Middle
East in the prior period and a strong operational improvement across our
businesses in Europe. As anticipated, this drove a significant improvement in
the underlying operating margin to 4.4% (2024: 0.9%). The Accident Frequency
Rate increased to 0.06 (2024: 0.05), representing six lost time injuries in
the period.
In Europe, revenue increased despite a strong comparative prior period that
saw high volumes from large infrastructure projects, notably in Central Europe
and the Nordics. Revenue continued to be driven by infrastructure spend and a
moderate increase in non-infrastructure public spending, whilst residential
and commercial sectors remained subdued. In the UK, revenue was down on prior
year reflecting the near-completion of our work on HS2, partly offset by a
moderate increase in activity more generally. A strong improvement in
operational performance across the region delivered an increase in underlying
operating profit (on a constant currency basis).
In the Middle East, revenue and profit increased, driven by residential
projects in the UAE and the non-recurrence of losses incurred on a challenging
project.
EME outlook
Construction activity in Europe is mainly public-funded programmes in
transport, energy networks and clean energy infrastructure. In the Middle
East, construction growth is supported by increased public and private sector
investments in industrial and renewable energy projects. In UAE, construction
growth is driven by investments in underground infrastructure to support
expanded utilities, transportation and power networks in the Dubai and Abu
Dhabi emirates. These growth drivers play well to Keller's multiproduct
portfolio and are expected to support continued revenue and profit growth. The
EME order book at the end of the period was £356.0m, up 14.2% on a constant
currency basis. The order book comprises of contracts across the businesses
with the majority of larger revenue projects located in the Nordics and ME.
Asia-Pacific (APAC)(1)
2025 2024 Constant
currency
£m £m
Revenue 398.2 365.8 14.6%
Underlying operating profit 30.6 28.7 14.6%
Underlying operating margin 7.7% 7.8% -
Order book 163.4 177.5 -5.4%
In APAC, revenues increased by 14.6% to £398.2m (on a constant currency
basis) largely driven by higher volume at Austral and Keller Asia(1), partly
offset by lower volumes at Keller Australia. Underlying operating profit
increased to £30.6m, up 14.6% (on a constant currency basis) driven by higher
profitable growth at Austral and Keller Asia, improved project performance
across the Division and the benefit of project closure settlements at Keller
Australia. The Accident Frequency Rate reduced to 0.02 (2024: 0.05)
representing two lost time injuries in the period.
The Austral business continued to perform strongly, with increased revenue and
profit, with management successful in driving growth in the business. Keller
Australia achieved a solid performance with softer trading levels following
high levels of federal and state government spending on transport
infrastructure in the prior year. In Keller Asia, our India business continued
to perform strongly in terms of both revenue and profit, driven by projects in
the growing renewable energy and semiconductor sectors. In ASEAN, the
Singapore market had a relatively soft period.
APAC outlook
Project pipeline is solid across the Division, particularly in Austral, where
we are well positioned on several large project opportunities and expect to
convert these into confirmed contract awards. In Australia, construction
growth from 2026-2029 is expected to be supported by the 2032 Olympics in
Brisbane, renewables, data centres and housing sectors, more than offsetting
an expected slowdown in major transport infrastructure. The mining sector
continues to invest in maintenance programmes across Western Australia and
Queensland. India's construction industry grew by 8.1% in 2025 and is expected
to grow 6.4% in 2026 (source: Global Data), driven by widespread sector
investment in industrial, renewable energy and water infrastructure. The APAC
Division is expected to continue to deliver solid results, supported by an
order book at the end of the period at £163.4m, down 5.4% (on a constant
currency basis), balanced across the three Business Units.
(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 2025 results.
The Group delivered a resilient performance underpinned by our geographic
portfolio and sector agility.
2025 2024
£m £m
Revenue 3,087.3 2,986.7
Underlying operating profit(1) 218.2 212.6
Underlying operating profit %(1) 7.1% 7.1%
Non-underlying items in operating profit (10.9) (7.5)
Statutory operating profit 207.3 205.1
Statutory operating profit % 6.7% 6.9%
(1 ) Details of non-underlying items are set out in note 9 to the
consolidated financial statements. Reconciliations to statutory numbers are
set out in the adjusted performance measures section.
Revenue and underlying operating profit split by geography
Revenue Underlying operating profit(2) Underlying operating profit margin(2)
£m £m %
Year ended 2025 2024 2025 2024 2025 2024
Division
North America 1,815.7 1,785.8 166.2 190.0 9.2% 10.6%
EME 873.4 835.1 38.8 7.9 4.4% 0.9%
APAC 398.2 365.8 30.6 28.7 7.7% 7.8%
Central - - (17.4) (14.0) - -
Group 3,087.3 2,986.7 218.2 212.6 7.1% 7.1%
(2 ) Details of non-underlying items are set out in note 9 to the
consolidated financial statements. Reconciliations to statutory numbers are
set out in the adjusted performance measures section.
Revenue
Group revenue of £3,087.3m (2024: £2,986.7m) was up 3.4% at actual foreign
currency rates and 5.9% up at constant currency. This was driven by growth in
all three divisions.
In North America, revenue increased by 5.0% on a constant currency basis
driven by Moretrench and RECON and Foundations in the US, which offset the
impact of a slowdown in the residential housing market on Suncoast revenue. In
Europe and the Middle East (EME), revenue increased by 4.1% on a constant
currency basis reflecting growth in most of the businesses in the division. In
Asia-Pacific (APAC), revenue increased by 14.6% on a constant currency basis
primarily due to growth in the Austral business.
We have a diversified spread of revenues across geographies, product lines,
market segments and end customers. Customers are generally market specific
and, consistent with the prior year, the largest customer represented less
than 4% of the Group's revenue. The top 10 customers represent 15% of the
Group's revenue (2024: 19%). The Group worked on c.5,500 projects in the year
with 43% (2024: 48%) of contracts having a value between £25,000 and
£250,000, demonstrating a low customer concentration and a wide project
portfolio.
Underlying operating profit
The underlying operating profit of £218.2m was 2.6% up on prior year (2024:
£212.6m) at actual foreign currency rates and 6.5% up on a constant currency
basis. The underlying operating margin remained at 7.1% (2024: 7.1%). In North
America, underlying operating profit decreased 9.6% on a constant currency
basis to £166.2m (2024: £190.0m), driven by soft market conditions at
Suncoast and the normalisation of market conditions in the Foundations
business. In EME, underlying operating profit increased by 379.0% on a
constant currency basis to £38.8m (2024: £7.9m), as a result of an
improvement in performance in the Middle East, following a challenging project
in 2024, and a strong operational improvement across the businesses in Europe.
In APAC, underlying operating profit increased to £30.6m (2024: £28.7m)
driven by growth at Austral and Keller Asia.
Share of post-tax results from joint ventures
The Group recognised an underlying post-tax profit of £0.8m in the year
(2024: £0.5m) from its share of the post-tax results from joint ventures. No
dividends (2024: nil) were received from joint ventures in the year.
Statutory operating profit
Statutory operating profit, comprising underlying operating profit of £218.2m
(2024: £212.6m) and non-underlying items with net costs of £10.9m (2024:
£7.5m), increased by 1.1% to £207.3m (2024: £205.1m). The non-underlying
costs are set out in further detail below.
Net finance costs
Net underlying finance costs decreased by 1.4% to £20.9m (2024: £21.2m). The
most significant elements of interest cost are the fixed interest on the $300m
private placement notes and interest payable on lease liabilities. Finance
income of £4.5m (2024: £6.6m) primarily relates to interest earned on cash
and short-term deposits; this was lower than the prior year due to a decrease
in prevailing interest rates.
Following the issuance of $300m of private placement notes in August 2023, the
Group's borrowings are now at fixed interest rates. The average month-end net
debt during 2025, excluding IFRS 16 lease liabilities, was £41.8m (2024:
£96.5m).
Taxation
The Group's underlying effective tax rate remained flat at 23% (2024: 23%). As
expected, the introduction of the Pillar Two rules with effect from 1 January
2024 did not have a material impact on the Group's effective tax rate.
Cash tax paid in the year decreased from £65.6m to £38.5m. The reduction is
due to a change in the tax treatment of research and development costs in the
US during the year, allowing a full in-year deduction. Further details on tax
are set out in note 12 of the consolidated financial statements.
Non-underlying items
The items below have been excluded from the underlying results and further
details of non-underlying items are included in note 9 to the financial
statements. The total of non-underlying items in operating profit in the year
increased to £10.9m (2024: £7.5m), due to the acceleration of the ERP
implementation project, and the large credit recognised in the prior year for
a change in the fair value of contingent consideration payable.
2025 2024
£m £m
ERP implementation costs 9.9 4.0
Exceptional restructuring costs 0.9 4.3
Claims related to closed business - 1.5
Loss on disposal of operations - 0.8
Amortisation of acquired intangible assets 1.6 3.3
Change in fair value of contingent consideration payable (1.3) (6.4)
Contingent consideration received on disposal of operations (0.2) -
Total non-underlying items in operating profit 10.9 7.5
Non-underlying taxation (1.9) (2.7)
Total non-underlying items 9.0 4.8
Non-underlying items in operating profit
The Group is continuing the strategic project to implement a new cloud-based
computing enterprise resource planning (ERP) system across the Group. The
phased rollout of the ERP is planned to start in 2026. Non-underlying ERP
costs of £9.9m (2024: £4.0m) include only costs relating directly to the
implementation, including external consultancy costs and the cost of the
dedicated implementation team. Non-underlying costs do not include operational
post-deployment costs such as licence costs for businesses that have
transitioned.
Exceptional restructuring costs of £0.9m (2024: £4.3m) in the year, comprise
the ongoing cost of the Group-wide finance transformation project. The
non-underlying costs for the year include design costs; they do not include
the running costs for the underlying finance activities.
In the prior year, the Group recognised claims costs related to closed
businesses of £1.5m as a result of increased provisions for customer claims
for businesses no longer operating. The prior year also included the £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 in 2025, which has been recognised as other operating
income, see note below.
The classification of costs as non-underlying is a management judgement and is
reviewed on a regular basis.
Amortisation of acquired intangibles
The £1.6m (2024: £3.3m) charge for amortisation of acquired intangible
assets relates to the RECON acquisition. The prior year charge also included
amounts related to intangibles acquired with Moretrench and GKM Consultants.
Change in fair value of contingent consideration
Non-underlying other operating income of £1.3m (2024: £6.4m) arose from a
change in fair value of the contingent consideration related to the
non-controlling interest transaction to acquire 35% of Keller Company Limited
(our main Saudi Arabian subsidiary). The prior year also included amounts
related to the acquisitions of GKM Consultants and NWF.
Contingent consideration received on disposal of operations
The first instalment of contingent consideration of £0.2m in respect of the
South African business disposal in 2024 was received in the year.
Non-underlying taxation
A non-underlying tax credit of £1.9m (2024: £2.7m) has been determined by
assessing the tax impact of each component of the non-underlying loss, and
primarily relates to the tax relief for the finance transformation and ERP
projects.
Earnings per share
Underlying diluted earnings per share increased by 5.7% to 211.3p (2024:
199.9p) driven by higher operating profit, lower finance costs and the impact
of the share buyback in the year. Statutory diluted earnings per share was
198.7p (2024: 193.3p) which includes the impact of the non-underlying items.
Dividend and share buybacks
The Board has recommended a final dividend of 52.1p per share (2024: 33.1p per
share) which, following the interim dividend for 2025 of 18.3p (2024: 16.6p),
brings the total dividend for the year to 70.4p (2024: 49.7p), an increase of
41.6%. The 2025 dividend earnings cover, before non-underlying items, was 3.0x
(2024: 4.0x). If approved, the proposed 2025 final dividend of 52.1p (2024:
33.1p) will be paid on 26 June 2026 to shareholders on the register as at the
close of business on 29 May 2026. Dividends paid to equity shareholders in the
year totalled £36.2m (2024: £34.6m).
During the year we initiated two tranches of £25m under our multi-year share
buyback programme and at year end we had returned £38.9m of capital to
shareholders, in addition to the dividend. Given the strength of the Group's
free cash flow and balance sheet, the Board is announcing an intention to
launch a further £100m share buyback programme to be completed during 2026.
Keller Group plc had distributable reserves of £274.0m at 31 December 2025
(2024: £283.7m) that are available to support the dividend policy and
announced buybacks, which comfortably covers the proposed final dividend for
2025 of £35.9m. Keller Group plc is a non-trading investment company that
derives its profits from dividends paid by subsidiary companies. The dividend
policy and buyback approach 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 and future
cash commitments and investment plans.
Net debt flow
The Group's free cash flow was an inflow of £175.9m (2024: £192.6m); the
reduction was due to the return to a normalised working capital outflow and
the one-off impact of large capital disposal proceeds in 2024. The ratio of
free cash flow before interest and tax to underlying operating profit remains
over 100% at 108%. The basis of deriving free cash flow is set out below.
2025 2024
£m £m
Underlying operating profit 218.2 212.6
Depreciation, amortisation and impairment 109.1 108.8
Underlying EBITDA 327.3 321.4
Non-cash items 2.0 (13.5)
(Increase)/decrease in working capital (13.1) 27.7
Increase in provisions, retirement benefit and other non-current liabilities 15.3 30.9
Net capital expenditure (77.5) (60.0)
Additions to right-of-use assets (21.4) (26.4)
Sale of non-current assets 2.7 -
Free cash flow before interest and tax 235.3 280.1
Free cash flow before interest and tax to underlying operating profit 108% 132%
Net interest paid (20.9) (21.9)
Cash tax paid (38.5) (65.6)
Free cash flow 175.9 192.6
Dividends paid (36.7) (34.6)
Purchase of own shares for EBT (3.6) (20.1)
Purchase of own shares for share buyback (38.9) -
Acquisitions (0.6) (0.9)
Business disposals 0.2 (2.6)
Non-underlying items (10.6) (8.4)
Right-of-use assets/lease liability modifications (7.2) (8.8)
Foreign exchange movements 19.5 (6.8)
Movement in net debt 98.0 110.4
Opening statutory net debt (126.9) (237.3)
Closing statutory net debt (28.9) (126.9)
Working capital
Net working capital increased by £13.1m (2024: decrease of £27.7m). The net
movement comprises an £8.0m increase (2024: £10.4m decrease) in inventories
and a increase in trade and other receivables of £42.5m (2024: £54.4m),
offset by an increase in trade and other payables of £37.4m (2024: £71.7m).
The movement in trade and other payables includes movements in deferred
revenue (contract liabilities). The increase in the year is lower than in
2024, due to two significant customer advance payments received in the prior
year, which have now been utilised.
An increase in provisions, retirement benefit and other non-current
liabilities improved the working capital by £15.3m (2024: £30.9m). 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,
excluding leased assets, of £77.5m (2024: £60.0m) was net of proceeds from
the sale of equipment of £12.9m (2024: £29.0m). 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 117% (2024: 113%).
Acquisitions, disposals and transactions with non-controlling interests
Acquisition cash outflow of £0.6m in the year 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 earnout receipt
from the disposal of the South African subsidiary last year.
Financing facilities and net debt
Strong cash generation, combined with the borrowing headroom of £447.1m
(2024: £447.4m) has further strengthened the resilience of the Group's
balance sheet.
The Group's total net debt of £28.9m (2024: £126.9m) comprises loans and
borrowings of £218.9m (2024: £236.6m), lease liabilities of £91.5m (2024:
£98.0m) net of cash and cash equivalents of £281.5m (2024: £207.7m). The
Group's term debt and committed facilities principally comprise US private
placement notes repayable in August 2030 ($120m) and in August 2033 ($180m).
The Group's syndicated revolving credit facility (£400m) was a five-year
facility, with the option to extend for two further years, with the agreement
of the lenders, the first year extension was secured this year, extending the
facility to June 2030. It was undrawn at the year end. At the year end, the
Group had undrawn committed and uncommitted borrowing facilities totalling
£447.1m (2024: £447.4m).
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 (0.2)x (2024: 0.1x), well
within the covenant limit of 3.0x and below the Group's leverage target of
between 0.5x-1.5x. Calculated on a statutory basis, including the impact of
IFRS 16, net debt to EBITDA leverage was 0.1x at 31 December 2025 (2024:
0.4x). Underlying EBITDA to net finance charges, excluding the impact of IFRS
16, was 21.5x (2024: 20.2x), well above the limit of 4.0x.
On an IFRS 16 basis, year-end gearing, defined as statutory net debt divided
by net assets, was 5% (2024: 21%).
The average month-end net debt during 2025, excluding IFRS 16 lease
liabilities, was £41.8m (2024: £96.5m). The Group had no material
discounting or factoring in place during the year. 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, although we have negotiated
advance payments on larger projects.
At 31 December 2025 the Group had no drawings under uncommitted overdraft
facilities (2024: £nil) and had drawn £199.7m of bank guarantee facilities
(2024: £201.8m).
Retirement benefits
The Group has defined benefit pension arrangements in the UK, Germany and
Austria.
The Group's UK defined benefit scheme is closed to future benefit accrual. The
most recent actuarial valuation of the UK scheme was as at 5 April 2023, which
recorded the market value of the scheme's assets at £45.2m and the scheme
being 98% funded on an ongoing basis. Given the funding level, contributions
ceased in August 2024, with a total of £1.7m paid in 2024 and no cash
contributions in 2025. Contributions will be reviewed following the next
triennial actuarial valuation to be prepared as at 5 April 2026. The 2025
year-end IAS 19 valuation of the UK scheme showed assets of £41.6m,
liabilities of £36.0m and a pre-tax surplus of £5.6m before an IFRIC 14
adjustment to reflect the minimum funding requirement for the scheme, which
adjusts the closing position to a nil balance.
In Germany and Austria, the defined benefit arrangements only apply to certain
employees who joined the Group before 1997. The IAS 19 valuation of the
defined benefit obligation totalled £11.7m at 31 December 2025 (2024:
£11.5m). There are no segregated funds to cover these defined benefit
obligations and the respective liabilities are included on the Group balance
sheet.
All other pension arrangements in the Group are of a defined contribution
nature.
The Group has a number of end of service schemes in the Middle East as
required by local laws and regulations. The amount of benefit payable depends
on the current salary of the employee and the number of years of service.
These retirement obligations are included on the Group's balance sheet and
obligations are met as and when required by the Group. The IAS 19 valuation
of the defined benefit obligation totalled £3.7m at 31 December 2025 (2024:
£3.7m).
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 year:
2025 2024
Closing Average Closing Average
USD 1.35 1.32 1.25 1.28
CAD 1.85 1.84 1.80 1.75
EUR 1.15 1.17 1.21 1.18
AUD 2.02 2.04 2.02 1.94
Treasury policies and risk management
Currency risk
The Group faces currency risk principally on its net assets, most of which are
in currencies other than sterling. The Group aims to reduce the impact that
retranslation of these net assets might have on the consolidated balance
sheet, by matching the currency of its borrowings, where possible, with the
currency of its assets. The majority of the Group's borrowings are held in US
dollar.
The Group manages its currency flows to minimise transaction exchange risk.
Forward contracts and other derivative financial instruments are used to hedge
significant individual transactions. The majority of such currency flows
within the Group relate to repatriation of profits, intra-Group loan
repayments and any foreign currency cash flows associated with acquisitions.
The Group's treasury risk management is performed at the Group's head office.
The Group does not trade in financial instruments, nor does it engage in
speculative derivative transactions.
Interest rate risk
Interest rate risk is managed by mixing fixed and floating rate borrowings
depending upon the purpose and term of the financing. At 31 December 2025 all
of borrowings were fixed rate.
Credit risk
The Group's principal financial assets are trade and other receivables, bank
and cash balances and a limited number of investments and derivatives held to
hedge certain Group liabilities. These represent the Group's maximum exposure
to credit risk in relation to financial assets.
The Group recognises impairment losses on trade receivables where there is
uncertainty over the amount we can recover from customers. The amount
recognised in underlying costs is a net credit of £0.5m (2024: cost of
£12.0m), a lower impact than the prior year.
The Group has procedures to manage counterparty risk and the assessment of
customer credit risk is embedded in the contract tendering processes. The
counterparty risk on bank and cash balances is managed by limiting the
aggregate amount of exposure to any one institution by reference to its credit
rating and by regular review of these ratings.
Return on capital employed
Return on capital employed is defined at Group level as underlying operating
profit divided by the accounting value of equity attributable to equity
holders of the parent plus net debt plus retirement benefit liabilities.
Return on capital employed in 2025 was 30.7% (2024: 28.2%).
Consolidated income statement
For the year ended 31 December 2025
2025 2024
Underlying Non-underlying Statutory Underlying Non-underlying Statutory
items items
(note 9) (note 9)
Note £m £m £m £m £m £m
Revenue 3,4 3,087.3 - 3,087.3 2,986.7 - 2,986.7
Operating costs 6 (2,875.1) (10.8) (2,885.9) (2,775.4) (10.6) (2,786.0)
Net impairment profit/(loss) on trade receivables and contract assets 7 0.5 - 0.5 (12.0) - (12.0)
Amortisation of acquired intangible assets - (1.6) (1.6) - (3.3) (3.3)
Other operating income 6,9 4.7 1.5 6.2 12.8 6.4 19.2
Share of post-tax results of joint ventures 17 0.8 - 0.8 0.5 - 0.5
Operating profit/(loss) 3 218.2 (10.9) 207.3 212.6 (7.5) 205.1
Finance income 10 4.5 - 4.5 6.6 - 6.6
Finance costs 11 (25.4) - (25.4) (27.8) - (27.8)
Profit/(loss) before taxation 197.3 (10.9) 186.4 191.4 (7.5) 183.9
Taxation 12 (45.2) 1.9 (43.3) (43.9) 2.7 (41.2)
Profit/(loss) for the year 152.1 (9.0) 143.1 147.5 (4.8) 142.7
Attributable to:
Equity holders of the parent 151.7 (9.0) 142.7 147.1 (4.8) 142.3
Non-controlling interests 34 0.4 - 0.4 0.4 - 0.4
152.1 (9.0) 143.1 147.5 (4.8) 142.7
Earnings per share
Basic 14 215.2p 202.4p 204.0p 197.4p
Diluted 14 211.3p 198.7p 199.9p 193.3p
( )
Consolidated statement of comprehensive income
For the year ended 31 December 2025
2025 2024
Note £m £m
Profit for the year 143.1 142.7
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange movements on translation of foreign operations (21.3) (13.0)
Transfer of translation reserve on disposal of subsidiaries - (0.7)
Cash flow hedge gain taken to equity - 0.1
Cash flow hedge transfers to income statement (0.3) -
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit pension schemes 33 (0.4) 0.2
Tax on remeasurements of defined benefit pension schemes 12 - (0.1)
Other comprehensive (loss) for the year, net of tax (22.0) (13.5)
Total comprehensive income for the year 121.1 129.2
Attributable to:
Equity holders of the parent 120.8 128.9
Non-controlling interests 0.3 0.3
121.1 129.2
Consolidated balance sheet
As at 31 December 2025
2025 2024
Note £m £m
Assets
Non-current assets
Goodwill and intangible assets 15 102.8 111.2
Property, plant and equipment 16 456.9 461.4
Investments in joint ventures 17 5.9 4.8
Deferred tax assets 12 43.8 61.5
Other assets 18 105.6 88.3
715.0 727.2
Current assets
Inventories 19 86.8 81.6
Trade and other receivables 20 735.7 759.1
Current tax assets 9.2 5.9
Cash and cash equivalents 21 281.5 207.7
Assets held for sale 22 0.2 9.2
1,113.4 1,063.5
Total assets 3 1,828.4 1,790.7
Liabilities
Current liabilities
Loans and borrowings 26 (29.2) (27.5)
Current tax liabilities (25.9) (33.0)
Trade and other payables 23 (628.9) (608.7)
Provisions 24 (91.6) (85.2)
(775.6) (754.4)
Non-current liabilities
Loans and borrowings 26 (281.2) (307.1)
Retirement benefit liabilities 33 (15.4) (15.2)
Deferred tax liabilities 12 (9.4) (9.4)
Provisions 24 (85.3) (89.3)
Other liabilities 25 (17.3) (18.6)
(408.6) (439.6)
Total liabilities 3 (1,184.2) (1,194.0)
Net assets 3 644.2 596.7
Equity
Share capital 28 7.3 7.3
Share premium account 38.1 38.1
Capital redemption reserve 28 7.6 7.6
Translation reserve (5.0) 16.2
Other reserve 28 56.9 56.9
Hedging reserve 1.5 1.8
Retained earnings 535.0 465.8
Equity attributable to equity holders of the parent 641.4 593.7
Non-controlling interests 34 2.8 3.0
Total equity 644.2 596.7
These consolidated financial statements were approved by the Board of
Directors and authorised for issue on 2 March 2026.
They were signed on its behalf by:
James Wroath David Burke
Chief Executive Officer Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 31 December 2025
Capital Attributable Non-
Share Share redemption Other Hedging to equity controlling
capital premium reserve Translation reserve reserve Retained holders of interests Total
(note 28) account (note 28) reserve (note 28) (note 26) earnings the parent (note 34) equity
£m £m £m £m £m £m £m £m £m £m
At 31 December 2023 7.3 38.1 7.6 29.8 56.9 1.7 373.9 515.3 2.7 518.0
Profit for the year - - - - - - 142.3 142.3 0.4 142.7
Other comprehensive income
Exchange movements on translation of foreign operations - - - (12.9) - - - (12.9) (0.1) (13.0)
Transfer of translation reserve on disposal of subsidiaries - - - (0.7) - - - (0.7) - (0.7)
Cash flow hedge gain taken to equity - - - - - 0.1 - 0.1 - 0.1
Remeasurements of defined benefit pension schemes - - - - - - 0.2 0.2 - 0.2
Tax on remeasurements of defined benefit pension schemes - - - - - - (0.1) (0.1) - (0.1)
Other comprehensive (loss)/ income for the year, net of tax - - - (13.6) - 0.1 0.1 (13.4) (0.1) (13.5)
Total comprehensive (loss)/ income for the year - - - (13.6) - 0.1 142.4 128.9 0.3 129.2
Dividends - - - - - - (34.6) (34.6) - (34.6)
Purchase of own shares for ESOP trust - - - - - - (20.1) (20.1) - (20.1)
Share-based payments - - - - - - 4.2 4.2 - 4.2
At 31 December 2024 7.3 38.1 7.6 16.2 56.9 1.8 465.8 593.7 3.0 596.7
Profit for the year - - - - - - 142.7 142.7 0.4 143.1
Other comprehensive income
Exchange movements on translation of foreign operations - - - (21.2) - - - (21.2) (0.1) (21.3)
Cash flow hedge transfers to income statement - - - - - (0.3) - (0.3) - (0.3)
Remeasurements of defined benefit pension schemes - - - - - - (0.4) (0.4) - (0.4)
Other comprehensive (loss)/ income for the year, net of tax - - - (21.2) - (0.3) (0.4) (21.9) (0.1) (22.0)
Total comprehensive (loss)/ income for the year - - - (21.2) - (0.3) 142.3 120.8 0.3 121.1
Dividends - - - - - - (36.2) (36.2) (0.5) (36.7)
Purchase of own shares for ESOP trust - - - - - - (3.6) (3.6) - (3.6)
Purchase of own shares (38.9) (38.9) - (38.9)
Share-based payments - - - - - - 4.9 4.9 - 4.9
Tax on share-based payments - - - - - - 0.7 0.7 - 0.7
At 31 December 2025 7.3 38.1 7.6 (5.0) 56.9 1.5 535.0 641.4 2.8 644.2
Consolidated cash flow statement
For the year ended 31 December 2025
2025 2024
Note £m £m
Cash flows from operating activities
Profit before taxation 186.4 183.9
Non-underlying items 9 10.9 7.5
Finance income 10 (4.5) (6.6)
Finance costs 11 25.4 27.8
Underlying operating profit 3 218.2 212.6
Depreciation/impairment of property, plant and equipment 16 109.0 108.7
Amortisation of intangible assets 15 0.1 0.1
Share of underlying post-tax results of joint ventures 17 (0.8) (0.5)
Profit on sale of property, plant and equipment (4.7) (12.8)
Other non-cash movements (including charge for share-based payments) 5.3 4.0
Foreign exchange losses/(gains) 2.2 (4.2)
Operating cash flows before movements in working capital and other underlying 329.3 307.9
items
(Increase)/decrease in inventories (8.0) 10.4
Increase in trade and other receivables (42.5) (54.4)
Increase in trade and other payables 37.4 71.7
Increase in provisions net of insurance receivables, retirement benefit and 15.3 30.9
other non-current liabilities
Cash generated from operations before non-underlying items 331.5 366.5
Cash outflows from non-underlying items: ERP costs (9.7) (4.9)
Cash outflows from non-underlying items: restructuring costs (0.9) (4.9)
Cash inflows from non-underlying items: claims for closed businesses - 1.4
Cash generated from operations 320.9 358.1
Interest paid (17.6) (20.4)
Interest element of lease rental payments (6.4) (6.2)
Income tax paid (38.5) (65.6)
Net cash inflow from operating activities 258.4 265.9
Cash flows from investing activities
Interest received 4.0 5.8
Proceeds from sale of property, plant and equipment 12.9 29.0
Proceeds from sale of other non-current assets 2.7 -
Disposal of businesses 5 0.2 (2.6)
Acquisition of businesses, net of cash acquired 5 (0.6) (0.9)
Acquisition of property, plant and equipment 16 (90.3) (89.0)
Acquisition of other intangible assets 15 (0.1) -
Net cash outflow from investing activities (71.2) (57.7)
Cash flows from financing activities
Debt issuance costs (0.5) (3.5)
Repayment of borrowings (0.3) (59.0)
Payment of lease liabilities (31.1) (28.0)
Purchase of own shares for ESOP trust (3.6) (20.1)
Purchase of own shares (38.9) -
Dividends paid 13 (36.7) (34.6)
Net cash outflow from financing activities (111.1) (145.2)
Net increase in cash and cash equivalents 76.1 63.0
Cash and cash equivalents at beginning of year 207.7 149.0
Effect of exchange rate movements (2.3) (4.3)
Cash and cash equivalents at end of year 21 281.5 207.7
Notes to the consolidated financial statements
1 Corporate information
The consolidated financial statements of Keller Group plc and its subsidiaries
(collectively, the 'Group') for the year ended 31 December 2025 were
authorised for issue in accordance with the resolution of the Directors on 2
March 2026.
Keller Group plc (the 'company') is a public 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 services.
2 Material accounting policy information
Basis of preparation
In accordance with the Companies Act 2006, these consolidated financial
statements have been prepared and approved by the Directors in accordance with
UK adopted international accounting standards. The company prepares its parent
company financial statements in accordance with FRS 101.
These financial statements do not constitute the company's full statutory
accounts, as defined in section 434 of the Companies Act 2006, for the years
ended 31 December 2025 or 31 December 2024 but are derived from the 2025
accounts. Statutory accounts for 2024 have been delivered to the Registrar of
Companies and made available on the company's website at www.keller.com
(http://www.keller.com) . The independent auditors' report on the full
financial statements for both years ended 31 December 2025 and 31 December
2024 were unqualified and did not contain an emphasis of matter paragraph or
any statement under section 498 of the Companies Act 2006.
The consolidated financial statements have been prepared on an historical cost
basis, except for non-qualifying deferred compensation assets and liabilities
and derivative financial instruments that have been measured at fair value.
The carrying values of recognised assets and liabilities that are designated
as hedged items in fair value hedges that would otherwise be carried at
amortised cost are adjusted to recognise changes in the fair values
attributable to the risks that are being hedged in effective hedge
relationships. The consolidated financial statements are presented in pounds
sterling and all values are rounded to the nearest hundred thousand, expressed
in millions to one decimal point, except when otherwise indicated.
Going concern
At 31 December 2025, the Group had undrawn committed and uncommitted borrowing
facilities totalling £447.1m, comprising the undrawn committed £400m
revolving credit facility and undrawn uncommitted borrowing facilities of
£47.1m, as well as cash and cash equivalents of £281.5m. At 31 December
2025, the Group's net debt to underlying EBITDA ratio (calculated on an IAS 17
covenant basis) was (0.2)x, well within the limit of 3.0x.
The Group has prepared a forecast of financial projections for the three-year
period to 31 December 2028. The forecast underpins the going concern
assessment which has been made for the period through to 31 March 2027, a
period of at least 12 months from when the financial statements are authorised
for issue and aligning with the period in which the Group's banking covenants
are tested. The base case reflects the forecast of financial projections
prepared by the Group for the three-year period to 31 December 2028. The
forecast shows significant headroom and supports the position that the Group
can operate within its available banking facilities and covenants throughout
this period.
For the going concern assessment, management ran a series of downside
scenarios over the base case forecast to assess covenant headroom against
available funding facilities. 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 this 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 £18.7m over the period to 31
March 2027. 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 and the cost of
a product or solution failure; and
· 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 plausible downside scenario incorporating an
aggregation of all risks considered, which showed a decrease in operating
profit of 22.3% and an increase in net debt of 63.0% against the Group's
latest forecast profit and cash flow projections for the review period up to
31 March 2027, the adjusted projections do not show a breach of covenants in
respect of available funding facilities or any liquidity shortfall. Management
considered the breaking point of the model, which would result in a breach of
financial covenants and the reduction in forecast profit and cash flow
projections required to achieve this. These outcomes 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 March
2027, a period of at least 12 months from when the financial statements are
authorised for issue. Accordingly, the consolidated financial statements are
prepared on a going concern basis.
Climate change
In preparing the consolidated financial statements, management has considered
the impact of climate change, particularly in the context of the risks
identified in the TCFD disclosure. The output from the scenario analysis has
been considered, particularly the financial reporting judgements and estimates
in respect of the following areas:
• estimates of future cash flows used in impairment assessments of
the carrying value of goodwill;
• the useful economic life of plant, equipment and other intangible
assets; and
• going concern and viability of the Group over the next three
years.
Although the scenario analysis identified a risk of stranded assets as a
result of increased emission standards, this was in one extreme downside
scenario and we have not adjusted the useful economic life of any plant or
equipment as a result. Whilst there is currently no change, management are
aware of the variable risks arising from climate change and will regularly
assess these risks against judgements and estimates made in preparation of the
Group's financial statements.
Changes in accounting policies and disclosures
New and amended standards and interpretations
An amendment to IAS 21 applies for the first time in 2025 but does not have an
impact on the Group's financial statements.
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.
Amendments to Illustrative Examples
There were Amendments to Illustrative Examples on IFRS 7, IFRS 18, IAS 1, IAS
8, IAS 36 and IAS 37 - Disclosures about Uncertainties in the Financial
Statements to show how entities can apply IFRS accounting standards when
reporting uncertainties in financial statements, with example disclosures
related to impairment testing, credit risk, decommissioning and site
restoration provisions, addressing topics such as materiality judgements,
significant judgements and estimates, and aggregation and disaggregation, were
issued in November 2025. The Group has considered the guidance provided in the
examples.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group's financial statements are
disclosed below. The Group intends to adopt these new and amended standards
and interpretations, if applicable, when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of
Financial Statements. IFRS 18 introduces new requirements for presentation
within the statement of profit or loss, including specified totals and
subtotals. Furthermore, entities are required to classify all income and
expenses within the statement of profit or loss into one of five categories:
operating, investing, financing, income taxes and discontinued operations,
whereof the first three are new. The standard requires disclosure of newly
defined management-defined performance measures, subtotals of income and
expenses, and it also includes new requirements for aggregation and
disaggregation of financial information based on the identified 'roles' of the
primary financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash
Flows, which include changing the starting point for determining cash flows
from operations under the indirect method, from 'profit or loss' to 'operating
profit or loss' and removing the optionality around classification of cash
flows from dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, are effective for
reporting periods beginning on or after 1 January 2027, but earlier
application is permitted and must be disclosed. IFRS 18 will apply
retrospectively.
The Group is currently working to identify all impacts the amendments will
have on the primary financial statements and notes to the financial
statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect
to apply its reduced disclosure requirements while still applying the
recognition, measurement and presentation requirements in other IFRS
accounting standards. To be eligible, at the end of the reporting period, an
entity must be a subsidiary as defined in IFRS 10, cannot have public
accountability and must have a parent (ultimate or intermediate) that prepares
consolidated financial statements, available for public use, which comply with
IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or after 1
January 2027, with early application permitted. As the Group's equity
instruments are publicly traded, it is not eligible to elect to apply IFRS 19.
Amendments to the Classification and Measurement of Financial
Instruments-Amendments to IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to IFRS 9 and IFRS 7, Amendments to
the Classification and Measurement of Financial Instruments (the Amendments).
The Amendments include:
▪ A clarification that a financial liability is derecognised on the
'settlement date' and the introduction of an accounting policy choice (if
specific conditions are met) to derecognise financial liabilities settled
using an electronic payment system before the settlement date
▪ Additional guidance on how the contractual cash flows for financial assets
with environmental, social and corporate governance (ESG) and similar features
should be assessed
▪ Clarifications on what constitute 'non-recourse features' and what are the
characteristics of contractually linked instruments
▪ The introduction of disclosures for financial instruments with contingent
features and additional disclosure requirements for equity instruments
classified at fair value through other comprehensive income (OCI)
The Amendments are effective for annual periods starting on or after 1 January
2026 with early adoption permitted for classification of financial assets and
related disclosures only.
The Group does not anticipate that the amendments will have a material effect
on the Group's financial statements.
Annual Improvements to IFRS Accounting Standards - Volume 11
In July 2024, the IASB issued nine narrow scope amendments as part of its
periodic maintenance of IFRS accounting standards. The amendments include
clarifications, simplifications, corrections or changes to improve consistency
in IFRS 1 First-time Adoption of International Financial Reporting Standards,
IFRS 7 Financial instruments: Disclosure and its accompanying Guidance on
implementing IFRS 7, IFRS 9 Financial Instruments, IFRS 10 Consolidated
Financial Statements and IAS 7 Statements of Cash Flows.
The amendments will be effective for reporting periods beginning on or after 1
January 2026. Earlier application is permitted and must be disclosed.
The amendments are not expected to have a material impact on the Group's
financial statements.
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and
IFRS 7
In December 2024, the IASB issued Amendments to IFRS 9 and IFRS 7 - Contracts
Referencing Nature-dependent Electricity. The amendments apply only to
contracts that reference nature-dependent electricity; the amendments:
▪ Clarify the application of the 'own-use' requirements for in-scope
contracts
▪ Amend the designation requirements for a hedged item in a cash flow
hedging relationship for in-scope contracts
▪ Add new disclosure requirements to enable investors to understand the
effect of these contracts on a company's financial performance and cash flows
The amendments will take effect for annual reporting periods starting on or
after 1 January 2026. Early adoption is allowed, but it must be disclosed. The
amendments concerning the own-use exception are to be applied retrospectively,
while the hedge accounting amendments should be applied prospectively to new
hedging relationships designated from the initial application date.
Additionally, the IFRS 7 disclosure amendments must be implemented alongside
the IFRS 9 amendments. If an entity does not restate comparative information,
it cannot present comparative disclosures.
The Group does not expect that the amendments will have a material impact on
its financial statements.
Basis of consolidation
The consolidated financial statements consolidate the accounts of the parent
and its subsidiary undertakings to 31 December each year. Subsidiaries are
entities controlled by the company. Control exists when the company has power
over an entity, exposure to variable returns from its involvement with the
entity and the ability to use its power over the entity to affect its returns.
Where subsidiary undertakings were acquired or sold during the year, the
accounts include the results for the part of the year for which they were
subsidiary undertakings using the acquisition method of accounting.
Intra-group balances, and any unrealised income and expense arising from
intra‑group transactions, are eliminated in preparing the consolidated
financial statements.
Joint operations
Where the Group undertakes contracts jointly with other parties, these are
accounted for as joint operations as defined by IFRS 11. In accordance with
IFRS 11, the Group accounts for its own share of assets, liabilities, revenues
and expenses measured according to the terms of the joint operations
agreement.
Joint ventures
A joint venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint
arrangement. The consolidated financial statements incorporate a share of the
results, assets and liabilities of joint ventures using the equity method of
accounting, whereby the investment is carried at cost plus post-acquisition
changes in the share of net assets of the joint venture, less any provision
for impairment. Losses in excess of the consolidated interest in joint
ventures are not recognised except where the Group has a constructive
commitment to make good those losses. The results of joint ventures acquired
or disposed of during the year are included in the consolidated income
statement from the effective date of acquisition or up to the effective date
of disposal, as appropriate.
Summary of material accounting policy information
Foreign currencies
The Group's consolidated financial statements are presented in pounds
sterling, which is also the parent company's functional currency. For each
entity, the Group determines the functional currency and items included in the
financial statements of each entity are measured using that functional
currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group's
entities at their respective functional currency spot rates at the date the
transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange at the reporting
date. Differences arising on settlement or translation of monetary items are
recognised in the consolidated income statement. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions.
Group companies
On consolidation, the assets and liabilities of foreign operations are
translated into pounds sterling at the rate of exchange prevailing at the
reporting date and their income statements are translated at exchange rates
prevailing at the dates of the transactions. The exchange movements arising on
translation for consolidation are recognised in other comprehensive income
(OCI). On disposal of a foreign operation, the component of the translation
reserve relating to that particular foreign operation is reclassified to
profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair
value adjustments to the carrying amounts of assets and liabilities arising on
the acquisition are treated as assets and liabilities of the foreign
operation.
The exchange rates used in respect of principal currencies are:
Average rates 2025 2024
US dollar 1.32 1.28
Canadian dollar 1.84 1.75
Euro 1.17 1.18
Singapore dollar 1.72 1.71
Australian dollar 2.04 1.94
Year-end rates 2025 2024
US dollar 1.35 1.25
Canadian dollar 1.85 1.80
Euro 1.15 1.21
Singapore dollar 1.73 1.71
Australian dollar 2.02 2.02
Revenue from construction contracts
The Group's operations involve the provision of specialist geotechnical
services. The majority of the Group's revenue is derived from construction
contracts. Typically, the Group's construction contracts consist of one
performance obligation; however, for certain contracts (for example where
contracts involve separate phases or products that are not highly
interrelated) multiple performance obligations exist. Where multiple
performance obligations exist, total revenue is allocated to performance
obligations based on the relative standalone selling prices of each
performance obligation.
For each contract, revenue is the amount that is expected to be received from
the customer. Revenue is typically invoiced in stages during the contracts,
however smaller contracts are usually invoiced on completion. Variable
consideration and contract modifications are assessed on a
contract-by-contract basis, according to the terms, facts and circumstances of
the project. Variable consideration is recognised only to the extent that it
is highly probable that there will not be a significant reversal.
The effects of contract modifications, including claims to customers, are
recognised only when the Group considers there is an enforceable right to
consideration, therefore no revenue is recognised until this point. Operating
expenses in relation to customer modifications are recognised as incurred.
Factors indicating an enforceable right to consideration will vary from
country to country but usually includes written confirmation from the
customer..
Revenue attributed to each performance obligation is recognised based on
either the input or the output method. The output method is the Group's
default revenue recognition approach. The input method is generally used for
longer-term, more complex contracts. These methods best reflect the transfer
of benefits to the customer.
● Output method: revenue is recognised on the direct
measurement of progress based on output, such as units of production relative
to the total number of contracted production units.
● Input method: revenue is recognised on the percentage of
completion with reference to cost. The percentage of completion is calculated
based on the costs incurred to date as a percentage of the total costs
expected to satisfy the performance obligation. Estimates of revenues, costs
or extent of progress towards completion are revised if circumstances change.
Any resulting increases or decreases in estimated revenues or costs are
reflected in the percentage of completion calculation in the period in which
the circumstances that give rise to the revision become known.
Where the Group becomes aware that a loss may arise on a contract, and that
loss is probable, full provision is made in the consolidated balance sheet
based on the estimated unavoidable costs of meeting the obligations of the
contract, where these exceed the economic benefits expected to be received.
The unavoidable costs under a contract reflect the least net cost of exiting
from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Incremental bid/tender costs and fulfilment costs are not material to the
overall contract and are expensed as incurred.
Any revenues recognised in excess of billings are recognised as contract
assets within trade and other receivables. Any payments received in excess of
revenue recognised are recognised as contract liabilities within trade and
other payables.
Revenue from the sale of goods and services
The Group's revenue recognised from the sale of goods and services primarily
relates to certain parts of the North America business. These contracts
typically have a single performance obligation, or a series of distinct
performance obligations that are substantially the same. There are typically
two types of contract:
● Delivery of goods: revenue for such contracts is
recognised at a point in time, on delivery of the goods to the customer.
● Delivery of goods with installation and/or post-delivery
services: revenue for these contracts is recognised at a point in time by
reference to the date on which the goods are installed and/or accepted by the
customer.
Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income. Current income tax relating to items
recognised directly in equity is recognised in equity and not in the
consolidated income statement.
The Group provides for future liabilities in respect of uncertain tax
positions where additional tax may become payable in future periods. Such
provisions are based on management's best judgement of the probability of the
outcome in reaching agreement with the relevant tax authorities. For further
information refer to note 12.
Deferred tax
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities, and their carrying amounts
for financial reporting purposes at the reporting date.
Deferred tax is recognised on temporary differences in line with IAS 12
'Income Taxes'. Deferred tax assets are recognised when it is considered
likely that they will be utilised against future taxable profits or deferred
tax liabilities.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited to the income statement, except when it relates to items
charged or credited directly to equity or to OCI, in which case the related
deferred tax is also dealt with in equity or in OCI.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Interest income and expense
All interest income and expense is recognised in the income statement on an
accruals basis, using the effective interest method.
Employee benefit costs
The Group operates a number of defined benefit pension schemes, and also makes
payments into defined contribution schemes.
The liability in respect of defined benefit schemes is the present value of
the defined benefit obligations at the balance sheet date, calculated using
the projected unit credit method, less the fair value of the schemes' assets
where applicable. The Group recognises the administration costs, current
service cost and interest on scheme net liabilities in the income statement,
and remeasurements of defined benefit plans in OCI in full in the period in
which they occur. Any surplus resulting from this calculation is limited to
the present value of any economic benefits available in the form of refunds
from the plans or reductions in future contributions to the plans. Where there
is no legal right to a refund from the plan, the liability is calculated as
the minimum funding requirement to the plan that exists at the balance sheet
date.
The Group also has long service arrangements in certain overseas countries.
These are accounted for in accordance with IAS 19 'Employee Benefits' and
accounting follows the same principles as for a defined benefit scheme.
Payments to defined contribution schemes are accounted for on an accruals
basis.
Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. Further details are
set out in note 16 for impairments recognised in the year. Subsequent
expenditure on property, plant and equipment is capitalised when it enhances
or improves the condition of the item of property, plant and equipment beyond
its original assessed standard of performance. Maintenance expenditure is
expensed as incurred.
Depreciation
Depreciation is provided to write off the cost less the estimated residual
value of property, plant and equipment using the straight-line method by
reference to their estimated useful lives as follows:
Buildings 50 years
Plant and equipment 3 to 12 years
Motor vehicles 4 years
Computers 3 years
Depreciation is not provided for on freehold land.
An item of property, plant and equipment is derecognised upon disposal (i.e.
at the date the recipient obtains control) or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property,
plant and equipment are reviewed at each financial year end and adjusted where
appropriate.
Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease. That is, if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets (less than
£3,000). The Group recognises lease liabilities to make payments and
right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and
estimated useful lives as follows:
Land and buildings 3 to 15 years
Plant and equipment 2 to 8 years
Motor vehicles 3 to 5 years
Right-of-use assets are tested for impairment in accordance with IAS 36
'Impairment of Assets'.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate
are recognised as an expense in the period in which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date, if the interest
rate implicit in the lease is not readily determinable. The incremental
borrowing rate applied to each lease is determined by considering the
risk-free rate of the country where the asset under lease is located, matched
to the term of the lease and adjusted for factors such as the credit risk
profile of the lessee. Incremental borrowing rates applied to individual
leases range from 1.85% to 15.2%.
After the commencement date, the amount of lease liabilities is increased to
reflect the addition of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in lease payments (e.g.
changes to future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an option to
purchase the underlying asset. The Group's lease liabilities are included in
interest-bearing loans and borrowings. Refer to note 26 for details.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of plant, machinery and vehicles (i.e. those leases that have a lease
term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered of low asset value
(below £3,000). Lease payments on short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over the lease
term.
Business combinations
Business combinations are accounted for using the acquisition method as at the
acquisition date, which is the date on which control is transferred to the
Group. Control is the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. In assessing control,
the Group takes into consideration potential voting rights that currently are
exercisable. The cost of an acquisition is measured as the aggregate of the
consideration transferred, which is measured at the fair value at the
acquisition date. Acquisition-related costs are expensed as incurred and
included in administrative expenses. Identifiable assets acquired, and
liabilities and contingent liabilities assumed, in a business combination are
measured initially at their fair values at the acquisition date. The excess of
cost of an acquisition over the fair value of the Group's share of the
identifiable net assets acquired, including assets identified as intangibles
on acquisition, is recorded as goodwill.
The results of subsidiaries which have been disposed are included up to the
effective date of disposal.
Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred. After initial recognition, goodwill is measured
at cost less any accumulated impairment losses. Goodwill is reviewed for
impairment annually and whenever there is an indication that the goodwill may
be impaired in accordance with IAS 36, any impairment losses are recognised
immediately in the income statement. Goodwill arising prior to 1 January 1998
was taken directly to equity in the year in which it arose. Such goodwill has
not been reinstated on the balance sheet. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group's cash-generating units (CGUs) that are
expected to benefit from the combination, irrespective of whether other assets
or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation
is included in the carrying amount of the operation when determining the gain
or loss on disposal. Goodwill disposed in these circumstances is measured
based on the relative values of the disposed operation and the portion of the
CGU retained.
Other intangible assets
Intangible assets, other than goodwill, include purchased licences, software
(including internally generated software), customer relationships, customer
contracts and trade names. Intangible assets are capitalised at cost and
amortised on a straight-line basis over their useful economic lives from the
date that they are available for use and are stated at cost less accumulated
amortisation and impairment losses. The estimated useful economic lives are as
follows:
Licences 1 to 4 years
Software 3 to 7 years
Patents 2 to 7 years
Customer relationships 5 to 7 years
Customer contracts 1 to 2 years
Trade names 5 to 7 years
Software-as-a-service arrangements
The Group's current SaaS arrangements are arrangements in which the Group does
not control the underlying software used in the arrangement.
Software development costs incurred to configure or customise application
software provided under a cloud computing arrangement and associated fees are
recognised as operating expenses as and when the services are received where
the costs represent a distinct service provided to the Group.
When such costs incurred do not provide a distinct service, the costs are
recognised as expenses over the duration of the SaaS contract. The Group
capitalises other software costs when the requirements of IAS 38 'Intangible
Assets' are satisfied, including configuration and customisation costs which
are distinct and within the control of the Group. Such software costs are
capitalised and carried at cost less any accumulated amortisation and
impairment, and amortised on a straight-line basis over the period
which the developed software is expected to be used.
Amortisation commences when the development is complete and the asset is
available for use and is included in the operating costs item of the
consolidated income statement. The amortisation is reviewed at least at the
end of each reporting period and any changes are treated as changes in
accounting estimates.
Impairment of assets excluding goodwill
The carrying values of property, plant and equipment, right-of-use assets and
other intangibles are reviewed for impairment when events or changes in
circumstances indicate the carrying value may be impaired. If any such
indication exists, the recoverable amount, being the lower of their carrying
amount and fair value less costs to sell, of the asset is estimated in order
to determine the extent of impairment loss.
Capital work in progress
Capital work in progress represents expenditure on property, plant and
equipment in the course of construction. Transfers are made to other property,
plant and equipment categories when the assets are available for use.
Inventories
Inventories are measured at the lower of cost and estimated net realisable
value with allowance made for obsolete or slow-moving items.
Cost comprises direct materials and, where applicable, direct labour costs and
those overheads that have been incurred in bringing the inventories to their
present location and condition.
Write-downs to net realisable value are made for slow-moving, damaged or
obsolete items based on evaluations made at the local level by reference to
frequency of stock turnover or specific factors affecting the items concerned.
Assets held for sale
Assets are classified as held for sale if their carrying amount will be
recovered by sale rather than by continuing use in the business. Assets held
for sale are measured at the lower of their carrying amount and fair value
less costs to sell, with reference to comparable market transactions. Assets
that are classified as held for sale are not depreciated.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's
balance sheet when the Group becomes a party to the contractual provisions of
the instrument. The principal financial assets and liabilities of the Group
are as follows:
(a) Trade receivables and trade payables
Trade receivables are initially recorded at fair value and subsequently
measured at cost and reduced by allowances for estimated irrecoverable
amounts.
Trade receivables and contract assets are stated net of expected credit losses
(ECLs). At each reporting date, the Group evaluates the estimated
recoverability of trade receivables and contract assets and records allowances
for ECLs based on experience.
The Group applies the simplified approach to measurement of ECLs in respect of
trade receivables, which requires expected lifetime losses to be recognised
from initial recognition of the receivable. Immediately after an individual
trade receivable or contract asset is assessed to be unlikely to be recovered,
an impairment is recognised as the difference between the carrying amount of
the receivable and the present value of estimated future cash flows. Customer
specific factors are considered when identifying impairments, which can
include the geographic location and credit rating of a customer.
Where there are no specific concerns over recovery, other than the increasing
age of a trade receivable or contract asset balance past payment terms, the
Group uses a provision matrix, where provision rates are based on days past
due. The provision matrix used reflects estimates based on past experience,
current economic factors and consideration of forward looking estimates of
economic conditions. Generally, trade receivables are written-off completely
if past due for more than 180 days. Default is defined as the point where
there is no further legal address available for the Group to recover the
receivable amount.
The information about the ECLs on the Group's trade receivables and contract
assets is disclosed in note 20.
Trade payables that are not interest bearing are initially recognised at fair
value and carried at amortised cost.
(b) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and on
hand and short-term deposits with a maturity of three months or less. For the
purpose of the consolidated statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits, as defined above, net of outstanding
bank overdrafts as they are considered an integral part of the Group's cash
management. Bank overdrafts are included within financial liabilities in
current liabilities in the balance sheet.
(c) Bank and other borrowings
Interest-bearing bank and other borrowings are recorded at the fair value of
the proceeds received, net of direct issue costs. Subsequent to initial
recognition, borrowings are stated at amortised cost, where applicable.
Bank or other borrowings are derecognised when the obligation under the
liability is discharged, cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference
in the respective carrying amounts is recognised in the consolidated income
statement.
Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to
settle on a net basis, ie to realise the assets and settle the liabilities
simultaneously.
(d) Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments to manage interest rate risk
and to hedge fluctuations in foreign currencies in accordance with its risk
management policy. In cases where these derivative instruments are
significant, hedge accounting is applied as described below. The Group does
not use derivative financial instruments for speculative purposes.
Derivatives are initially recognised in the balance sheet at fair value on the
date the derivative contract is entered into and are subsequently remeasured
at reporting periods to their fair values. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities
when the fair value is negative.
Changes in the fair value of the effective portion of derivatives that are
designated and qualify as cash flow hedges are recognised in other
comprehensive income (OCI). Changes in the fair value of the ineffective
portion of cash flow hedges are recognised in the income statement. Amounts
originally recognised in OCI are transferred to the income statement when the
underlying transaction occurs or if the transaction results in the recognition
of a non-financial asset or liability, the amount accumulated in equity is
included in the initial cost or carrying amount of the hedged asset or
liability.
Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in the income statement as they
arise.
Hedge accounting is discontinued when the hedging instrument expires or is
sold, terminated, or exercised, or no longer qualifies for hedge accounting.
At that time, any cumulative gain or loss on the hedging instrument recognised
in OCI is retained in equity until the hedged transaction occurs. If a hedged
transaction is no longer expected to occur, the net cumulative gain or loss
recognised in OCI is transferred to the income statement in the period.
For the purpose of hedge accounting, hedges are classified as:
● Cash flow hedges when hedging the exposure or variability
in cash flows that is either attributable to a particular risk associated with
a recognised asset or liability or a highly probable transaction.
● Fair value hedges when hedging the exposure to changes in
the fair value of a recognised asset or liability.
● Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Group formally designates and
documents the hedge relationship to which it wishes to apply hedge accounting
and the risk management objective and strategy for undertaking the hedge. The
documentation includes identification of the hedging instrument, the hedged
item, the nature of the risk being hedged and how the Group will assess
whether the hedging relationship meets the hedge effectiveness requirements
(including the analysis of sources of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship qualifies for hedge accounting if
it meets all of the following effectiveness requirements:
● There is 'an economic relationship' between the hedged
item and the hedging instrument.
● The effect of credit risk does not 'dominate the value
changes' that result from that economic relationship.
● The hedge ratio of the hedging relationship is the same as
that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses
to hedge that quantity of hedged item.
Provisions
Provisions have been made for employee-related liabilities, restructuring
commitments, onerous contracts, insured liabilities and legal claims, and
other property-related commitments. These are recognised as management's best
estimate of the expenditure required to settle the Group's liability at the
reporting date.
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event and where it is
probable that an outflow will be required to settle the obligation and the
amount of the obligation can be estimated reliably. If the effect is material,
expected future cash flows are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to unwinding the
discount is recognised as a finance cost. Details of provisions are set out in
note 24.
Provisions for insured liabilities and legal claims include the full estimated
value of the liability. Any related insurance reimbursement asset that is
virtually certain to be received is separately presented gross within trade
and other receivables or other non-current assets on the consolidated balance
sheet.
Contingent liabilities
Contingent liabilities are possible obligations of the Group of which the
timing and amount are subject to significant uncertainty. Contingent
liabilities are not recognised in the consolidated balance sheet, unless they
are assumed by the Group as part of a business combination. They are however
disclosed, unless they are considered to be remote. If a contingent liability
becomes probable and the amount can be reliably measured it is no longer
treated as contingent and recognised as a liability on the balance sheet.
Contingent assets
Contingent assets are possible assets of the Group of which the timing and
amount are subject to significant uncertainty. Contingent assets are not
recognised in the consolidated balance sheet. They are however disclosed, when
they are considered to be probable. A contingent asset is recognised in the
financial statements when the inflow of economic benefits is virtually
certain.
Share-based payments
The Group operates a number of equity-settled executive and employee share
plans. For all grants of share options and awards, the fair value of the
employee services received in exchange for the grant of share options is
recognised as an expense, calculated using appropriate option pricing models.
The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options granted, excluding the impact of
any non-market vesting conditions, with a corresponding increase in retained
earnings. The charge is adjusted to reflect expected actual levels of options
vesting due to non-market conditions.
Shares purchased and held in trust in connection with the Group's share
schemes are deducted from retained earnings. No gain or loss is recognised
within the income statement on the market value of these shares compared with
the original cost.
Segmental reporting
During the year the Group comprised 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.
Dividends
Interim dividends are recorded in the Group's consolidated financial
statements when paid. Final dividends are recorded in the Group's consolidated
financial statements in the period in which they receive shareholder approval.
Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements in conformity
with IFRS requires management to make judgements, estimates and assumptions
that affect the application of policies, reported amounts of assets and
liabilities, revenue and expenses and the accompanying disclosures, and the
disclosure of contingent liabilities. The estimates are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods. Actual
results may also differ from these estimates.
The estimates are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the
revision affects only that and prior periods, or in the period of the revision
and future periods if the revision affects both current and future periods.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes are reflected
in the assumptions when they occur.
Construction contracts
The Group's approach to key estimates and judgements relating to construction
contracts is set out in the revenue recognition policy. In the Group
consolidated balance sheet this impacts contract assets, contract liabilities
and contract provisions (refer to notes 4 and 24).
As described in the policy, the default revenue recognition approach is the
output method. When revenue is recognised based on the output method, there is
little judgement involved in accounting for construction contracts as the
amount of revenue that has not been certified/accepted by the client is
typically small and is usually based on volumes achieved at agreed rates.
These contracts can still be subject to claims and variations resulting in an
adjustment to the revenue recognised.
When revenue is recognised based on the input (cost) method, the main factors
considered when making estimates and judgements include the cost of the work
required to complete the contract in order to estimate the percentage
completion, and the outcome of claims raised against the Group by customers or
third parties. The Group performed around 5,500 contracts during 2025, at an
average revenue of approximately £560,000 and a typical range of between
£25,000 and £10m in value. The majority of contracts were completed in the
year and therefore there are no estimates involved in accounting for these.
For contracts that are not complete at year end and revenue is recognised on
the input method, the Group estimates the total costs to complete in order to
measure progress and therefore how much revenue to recognise, which may impact
the contract asset or liability recorded in the balance sheet. The actual
total costs incurred on these contracts will differ from the estimate at 31
December and it is reasonably possible that outcomes on these contracts within
the next year could be materially different in aggregate to those estimated.
Total contract assets are £119.6m and contract liabilities are £98.3m at 31
December 2025.
However, due to the level of uncertainty and timing across a large portfolio
of contracts, which will be at different stages of their contract life, it is
not practical to provide a quantitative analysis of the aggregated judgements
that are applied at a portfolio level. The estimated costs to complete are
management's best estimate at this point in time and no individual estimate or
judgement is expected to have a materially different outcome.
In the case of loss-making contracts, a full provision is made based on the
estimated unavoidable costs of meeting the obligations of the contract, where
these exceed the economic benefits expected to be received. The process for
estimating the total cost to complete is the same as for in-progress
profitable contracts, and will include management's best estimate of all
labour, equipment and materials costs required to complete the contracted
work. All cost to complete estimates involve judgement over the likely future
cost of labour, equipment and materials and the impact of inflation is
included if material. The amount included within provisions in respect of
contract provisions is £72.9m (2024: £66.3m), this includes other
contract-related provisions as well as onerous contract provisions.
As stated in the revenue recognition accounting policy, variable consideration
is assessed on a contract-by-contract basis, according to the terms, facts and
circumstances of the project. Variable consideration is recognised only to the
extent that it is highly probable that there will not be a significant
reversal; management judgement is required in order to determine when variable
consideration is highly probable. Uncertainty over whether a project will be
completed or not can mean that it is appropriate to treat the contracted
revenue as variable consideration.
Non-underlying items
Non-underlying items are disclosed separately in the financial statements
where it is necessary to do so to provide further understanding of the
financial performance of the Group. They are items which are exceptional by
their size and/or are non-trading in nature, including amortisation of
acquired intangibles, goodwill impairment, 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.
The Group exercises judgement in assessing whether restructuring items and the
ERP implementation costs 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. The value of exceptional restructuring costs in 2025
(£0.9m) is lower than in 2024 (£4.3m), due to the higher spend on the
finance transformation project in the prior year. ERP implementation costs are
categorised as non-underlying due to the scale and length of the project. The
nature of the project and costs incurred are reviewed on a regular basis to
assess the appropriateness of the classification as a non-underlying cost.
Carrying value of goodwill
The Group tests annually whether goodwill has suffered any impairment in
accordance with the accounting policy set out above. Impairment exists when
the carrying value of an asset or cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its
value-in-use. The fair value less costs of disposal calculation is based on
available market data for transactions conducted at arm's length, for similar
assets or observable market prices less incremental costs of disposing of the
asset. The Group estimates the recoverable amount based on value-in-use
calculations. The value-in-use calculation is based on a discounted cash flow
(DCF) model. The cash flows are derived from the relevant budget and forecasts
for the next three years, including a terminal value assumption. The
recoverable amount is sensitive to the discount rate used for the DCF model as
well as the expected future cash inflows and growth rates assumed within the
calculation.
In 2025, management noted sensitivity in the headroom available for Keller
Canada. The DCF for the CGU is sensitive to the future successful execution of
business plans to consistently meet forecasted margins. Refer to note 15 for
further information.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses and other timing
differences to the extent that it is probable that future taxable profits will
be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and the level of future taxable
profits (based on the same Board-approved information to support the going
concern and goodwill impairment assessments). The Group uses judgement in
assessing the recoverability of deferred tax assets, for which the significant
assumption is forecast taxable profits. A 10% shortfall in expected profits
would have a proportional impact on the value of the deferred tax assets
recoverable. Deferred tax assets recognised on unused tax losses were £10.1m
at 31 December 2025 (2024: £13.1m). Refer to note 12 for further information.
Insurance and legal provisions
The recognition of provisions for insurance and legal disputes is subject to a
significant degree of estimation. In making its estimates, management seek
specialist input from legal advisers and the Group's insurance claims handler
to estimate the most likely legal outcome. Provisions are reviewed regularly
and amounts updated where necessary to reflect developments in the disputes.
The ultimate liability may differ from the amount provided depending on the
outcome of court proceedings and settlement negotiations or if investigations
bring to light new facts. Refer to note 24 for further information.
3 Segmental analysis
During the year the Group was managed as three geographical divisions and has
only one major product or service: specialist geotechnical services.
This is reflected in the Group's management structure and in the segment
information reviewed by the Chief Operating Decision Maker.
2025 2024
Revenue Operating Revenue Operating
profit profit
£m £m £m £m
North America 1,815.7 166.2 1,785.8 190.0
Europe and Middle East 873.4 38.8 835.1 7.9
Asia-Pacific 398.2 30.6 365.8 28.7
3,087.3 235.6 2,986.7 226.6
Central items - (17.4) - (14.0)
Underlying 3,087.3 218.2 2,986.7 212.6
Non-underlying items (note 9) - (10.9) - (7.5)
3,087.3 207.3 2,986.7 205.1
2025
Depreciation(2) Tangible(3)
and
Segment Segment Capital Capital and intangible
assets liabilities employed additions amortisation assets
£m £m £m £m £m £m
North America 926.6 (349.4) 577.2 45.9 56.0 323.4
Europe and Middle East 417.5 (294.5) 123.0 29.6 38.7 164.0
Asia-Pacific 160.4 (114.6) 45.8 14.9 13.3 68.9
1,504.5 (758.5) 746.0 90.4 108.0 556.3
Central items(1) 323.9 (425.7) (101.8) - 1.1 3.4
1,828.4 (1,184.2) 644.2 90.4 109.1 559.7
2024
Depreciation(2) Tangible(3)
and
Segment Segment Capital Capital and intangible
assets liabilities employed additions amortisation assets
£m £m £m £m £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(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.
Revenue analysed by country:
2025 2024
£m £m
United States 1,664.4 1,612.5
Australia 286.5 246.4
Canada 156.8 171.7
Germany 150.7 168.9
Poland 98.3 101.3
United Kingdom 84.4 97.5
India 82.3 78.2
Other 563.9 510.2
3,087.3 2,986.7
Non-current assets(1) analysed by country:
2025 2024
£m £m
United States 380.0 349.0
Germany 57.4 51.4
Australia 51.3 52.9
Canada 39.3 37.5
Austria 31.0 30.0
Other 128.2 144.9
687.2 665.7
1 Excluding deferred tax assets
4 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 3) and timing of revenue recognition:
2025 2024
Revenue Revenue Revenue Revenue
recognised recognised recognised recognised
on on on on
performance performance performance performance
obligations obligations obligations obligations
satisfied over satisfied at a Total satisfied over satisfied at a Total
time point in time revenue time point in time revenue
£m £m £m £m £m £m
North America 1,530.9 284.8 1,815.7 1,457.5 328.3 1,785.8
Europe and Middle East 873.4 - 873.4 835.1 - 835.1
Asia-Pacific 398.2 - 398.2 365.8 - 365.8
2,802.5 284.8 3,087.3 2,658.4 328.3 2,986.7
The final contract value will not always have been agreed at the year end. The
contract value, and therefore revenue allocated to a performance obligation,
may change subsequent to the year end as variations and claims are agreed with
the customer. The amount of revenue recognised in 2025 from performance
obligations satisfied in previous periods is £10.3m (2024: £24.9m).
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. As at 31
December 2025, the total order book is £1,541.7m (2024: £1,610.0m).
The order book for contracts with a total duration over one year is £559.7m
(2024: £578.3m). Revenue on these contracts is expected to be recognised as
follows:
2025 2024
£m £m
Less than one year 395.5 421.9
One to two years 156.8 130.5
More than two years 7.4 25.9
559.7 578.3
The following table provides information about trade receivables, contract
assets and contract liabilities arising from contracts with customers:
2025
2024
£m £m
Trade receivables 548.3 575.1
Contract assets 119.6 119.2
Contract liabilities (98.3) (115.2)
Trade receivables include invoiced amounts for retentions, which are balances
typically payable at the end of a construction project, when all contractual
performance obligations have been met, and are therefore received over a
longer period of time. Included in the trade receivables balance is £103.5m
(2024: £137.7m) in respect of retentions anticipated to be receivable within
one year. Included in non-current other assets is £76.1m (2024: £33.7m)
anticipated to be receivable in more than one year. All contract assets and
liabilities are current.
Significant changes in the contract assets and liabilities during the year are
as follows:
2025 2024
Contract assets Contract liabilities Contract assets Contract liabilities
£m £m £m £m
As at 1 January 119.2 (115.2) 90.9 (90.9)
Revenue recognised in the current year 1,100.3 1,075.6 1,091.3 930.8
Disposed with businesses - - (1.3) 0.9
Amounts transferred to trade receivables (1,096.0) - (1,059.9) -
Cash received/invoices raised for performance obligations not yet satisfied - (1,062.6) - (956.8)
Exchange movements (3.9) 3.9 (1.8) 0.8
As at 31 December 119.6 (98.3) 119.2 (115.2)
5 Acquisitions and disposals
Acquisitions
There were no material acquisitions during the year to 31 December 2025 or
during the year to 31 December 2024.
Disposals
There were no disposals during the year to 31 December 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 £2.4m (ZAR56m). A non-underlying loss on disposal
of £0.8m (ZAR19m) was recognised. The business disposal cash outflow of
£2.6m related to the £5.0m disposal of the cash held by the South African
subsidiary on the disposal date of 28 June 2024 less the sale proceeds of
£2.4m.
6 Operating costs 2025
2024
Note £m £m
Raw materials and consumables 855.6 834.7
Staff costs 8 830.4 790.1
Other operating charges 833.5 839.6
Amortisation of intangible assets 15 0.1 0.1
Expenses relating to short-term leases and leases of low-value assets 246.5 202.2
Depreciation:
Owned property, plant and equipment 16a 77.3 78.8
Right-of-use assets 16b 31.7 29.9
Underlying operating costs 2,875.1 2,775.4
Non-underlying items 9 10.8 10.6
Statutory operating costs 2,885.9 2,786.0
Other operating charges include:
Fees payable to the company's auditor for the audit of the company's Annual 1.5 1.5
Report and Accounts
Fees payable to the company's auditor for other services:
The audit of the company's subsidiaries, pursuant to legislation 2.2 2.1
Other assurance services 0.2 0.1
Underlying other operating income relates to profit on sale of property, plant
and equipment of £4.7m (2024: £12.8m). Non-underlying other operating income
is discussed in note 9.
7 Net impairment loss on trade receivables and contract assets
The net impairment loss on trade receivables and contract assets is made up of
movements in the allowance for expected credit losses of trade receivables and
contract assets as follows:
2025 2024
£m £m
Additional provisions (16.1) (21.0)
Unused amounts reversed 16.6 9.0
Net impairment profit/(loss) 0.5 (12.0)
Further information on the Group's allowance for expected credit losses of
trade receivables and contract assets and on the Group's expected credit loss
rates for the 2024 and 2025 financial years can be found in note 20 Trade and
other receivables.
8 Employees
The aggregate staff costs of the Group were:
2025 2024
£m £m
Wages and salaries 730.2 697.4
Social security costs 76.1 71.0
Other pension costs 19.2 17.5
Share-based payments 4.9 4.2
830.4 790.1
These costs include Directors' remuneration. Fees payable to Non-executive
Directors totalled £0.7m (2024: £0.6m).
The average number of staff, including Directors, employed by the Group during
the year was:
2025 2024
Number Number
North America 4,786 4,542
Europe and Middle East 3,547 3,403
Asia-Pacific 1,531 1,441
9,864 9,386
9 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,
goodwill impairment, 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 in
the table 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.
2025 2024
£m £m
ERP implementation costs 9.9 4.0
Exceptional restructuring costs 0.9 4.3
Claims related to closed businesses - 1.5
Loss on disposal of operations - 0.8
Non‑underlying items in operating costs 10.8 10.6
Amortisation of acquired intangible assets 1.6 3.3
Change in fair value of contingent consideration payable (1.3) (6.4)
Contingent consideration received on disposal of operations (0.2) -
Non-underlying items in other operating income (1.5) (6.4)
Total non-underlying items in operating profit and before taxation 10.9 7.5
Taxation (1.9) (2.7)
Total non-underlying items after taxation 9.0 4.8
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. The phased roll-out of the ERP is
planned to start in 2026. Non-underlying ERP costs of £9.9m (2024: £4.0m)
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 comprises £0.9m (2024: £4.3m) in respect of
the Group's finance transformation project, which has moved certain finance
activities into internal shared service centres. This is a group-wide
strategic project. The costs for the year mainly comprise planning activities
for the North America division. We anticipate incurring further costs for the
North America division in 2026. Non-underlying costs does not include
operational post-implementation running costs for the shared service centres.
In 2024, the costs comprised headcount restructuring and one-off set up costs
for the shared service centres for the EME and APAC divisions.
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. The value
of exceptional restructuring costs in 2025 (£0.9m) is lower than in 2024
(£4.3m).
Claims related to closed businesses
The cost incurred for the prior period of £1.5m reflected increased
provisions for customer claims for businesses no longer operating.
Loss on disposal of operations
As explained in note 5, the Group disposed of its South African operation in
the prior period, recognising a loss on disposal of £0.8m.
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets of £1.6m relates to the
amortisation charge on assets acquired in the RECON acquisition. The
amortisation of acquired intangible assets in 2024 of £3.3m related to the
amortisation charge on assets acquired in the RECON, GKM, Moretrench and NWF
acquisitions.
Non-underlying items in other operating income
Change in fair value of contingent consideration payable
Non-underlying other operating income of £1.3m (2024: £6.4m) arises from a
change in fair value of the contingent consideration related to the
non-controlling interest transaction to acquire 35% of Keller Company Limited
(formerly Keller Turki Company Limited). Refer to note 26 for further detail.
Contingent consideration received on disposal of operations
The first instalment of contingent consideration of £0.2m in respect of the
South African business disposal in 2024 was received in the year.
Non-underlying taxation
Refer to note 12 for details of the non-underlying tax items.
10 Finance income
2025 2024
£m £m
Bank and other interest receivable 4.0 6.1
Net pension interest income 0.2 0.2
Other finance income 0.3 0.3
Underlying finance income 4.5 6.6
Total finance income 4.5 6.6
11 Finance costs
2025 2024
£m £m
Interest payable on bank loans and overdrafts 1.7 1.4
Interest payable on other loans 14.5 17.3
Interest on lease liabilities 6.4 6.2
Net pension interest cost 0.4 0.4
Other interest costs 1.6 1.9
Total interest costs 24.6 27.2
Unwinding of discount on provisions 0.8 0.6
Total finance costs 25.4 27.8
12 Taxation
2025 2024
£m £m
Current tax expense:
Current year 26.0 64.0
Prior years 3.1 -
Total current tax 29.1 64.0
Deferred tax expense:
Current year 21.1 (23.0)
Prior years (6.9) 0.2
Total deferred tax 14.2 (22.8)
43.3 41.2
UK corporation tax is calculated at 25% (2024: 25%) of the estimated
assessable profit for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions.
The effective tax rate can be reconciled to the UK corporation tax rate of 25%
(2024: 25%) as follows:
2025 2024
Non- Non-
underlying underlying
items items
Underlying (note 9) Statutory Underlying (note 9) Statutory
£m £m £m £m £m £m
Profit/(loss) before tax 197.3 (10.9) 186.4 191.4 (7.5) 183.9
UK corporation tax charge/(credit) at 25% (2024: 25%) 49.3 (2.7) 46.6 47.9 (1.9) 46.0
Tax charged at rates other than 25% (2024: 25%) 2.3 (0.1) 2.2 5.0 - 5.0
Tax losses and other deductible temporary differences not recognised 12.1 0.6 12.7 2.7 - 2.7
Utilisation of tax losses and other deductible temporary differences (4.4) - (4.4) (9.3) - (9.3)
previously unrecognised
Permanent differences (10.2) 0.3 (9.9) (3.6) (0.8) (4.4)
Adjustments to tax charge in respect of previous periods (3.8) - (3.8) 0.2 - 0.2
Other (0.1) - (0.1) 1.0 - 1.0
Tax charge/(credit) 45.2 (1.9) 43.3 43.9 (2.7) 41.2
Effective tax rate 22.9% 17.5% 23.2% 22.9% 35.3% 22.4%
The effective tax rate on underlying profits of 22.9% remains unchanged from
the 2024 effective tax rate.
The tax credit of £1.9m on non-underlying items has been calculated by
assessing the tax impact of each component of the charge/(credit) to the
income statement and applying the jurisdictional tax rate that applies to that
item. The effective tax rate in 2025 on non-underlying items is lower than the
effective tax rate on underlying items largely due to the impact of
non-deductible expenses.
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, provisions are made where necessary, based on
interpretation of legislation, management experience and appropriate
professional advice. Management do 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 applied to the Group from the beginning of the
financial year commencing on 1 January 2024. 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 Pillar Two
top-up taxes, based on the Country-by-Country Reporting data for 2025 for the
constituent entities in the Group. Based on the assessment, the Pillar Two
effective tax rates in most of the jurisdictions in which the Group operates
are above 15%. There are however a limited number of jurisdictions where the
transitional safe harbour relief may not apply and appropriate provision has
been made for resultant top up taxes. The Group does not expect a material
exposure to Pillar Two 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.
The following are the major deferred tax liabilities and assets recognised by
the Group and the movements during the current and prior reporting periods:
Other
Unused Accelerated Retirement employee- Other(1)
tax capital benefit related Bad temporary
losses allowances obligations liabilities debts differences Total
£m £m £m £m £m £m £m
At 1 January 2024 10.7 1.0 2.3 12.4 7.0 (4.4) 29.0
Credit/(charge) to the income statement 2.5 21.2 (0.3) (5.6) 4.5 0.5 22.8
Charge to other comprehensive income - - (0.1) - - - (0.1)
Exchange movements (0.1) 1.2 (0.1) (0.1) 0.1 (0.2) 0.8
Other reallocations/transfers - (0.4) - - - - (0.4)
At 31 December 2024 13.1 23.0 1.8 6.7 11.6 (4.1) 52.1
Credit/(charge) to the income statement (1.6) (18.8) (1.1) 2.5 (0.4) 5.2 (14.2)
Credit to retained earnings - - - 0.7 - - 0.7
Exchange movements (1.4) (1.4) 0.2 (0.5) (0.7) (0.4) (4.2)
At 31 December 2025 10.1 2.8 0.9 9.4 10.5 0.7 34.4
1 Other temporary differences are mainly in respect of
intangible assets and contract provisions.
The movement from a net deferred tax asset of £52.1m at 31 December 2024 to
£34.4m at 31 December 2025 is largely as a result of the change in tax
treatment of R&D expenditure for US tax purposes. As the R&D
expenditure is no longer deferred for tax purposes and amortised over five
years, whilst the previously accrued expenditure continues to be amortised,
the net deferred tax asset is being reduced.
The following is the analysis of the deferred tax balances:
2025 2024
£m £m
Deferred tax assets 43.8 61.5
Deferred tax liabilities (9.4) (9.4)
34.4 52.1
Deferred tax assets include amounts of £43.8m (2024: £61.5m) where recovery
is based on forecasts of future taxable profits that are expected to be
available to offset the reversal of the associated temporary differences. The
deferred tax assets arise in the US (£34m), Australia (£5m), Canada (£2.9m)
and India (£1.9m), with only the assets recognised in Canada being partially
in relation to tax losses carried forward. The amount of profits in each
territory which are necessary to be realised over the forecast period to
support these assets are £130m, £17m, £11m, and £7.5m respectively.
Canadian tax rules currently allow tax losses to be carried forward up to 20
years. The recovery of deferred tax assets has been assessed by reviewing the
likely timing and level of future taxable profits. The period assessed for
recovery of assets is appropriate for each territory having regard to the
specific facts and circumstances and the probability of achieving forecast
profitability. A 10% shortfall in expected profits would have a proportional
impact on the value of the deferred tax assets recoverable.
At the balance sheet date, the Group had unused tax losses of £114.3m (2024:
£101.7m), mainly arising in Canada, Spain, France, Saudi Arabia, Malaysia and
the UK, available for offset against future profits, on which no deferred tax
asset has been recognised. Of these losses, £86.3m (2024: £59.1m) may be
carried forward indefinitely. Of the remaining losses, £1.3m expire in 2028,
£16.1m expire in 2031, and £10.6m expire in 2035.
At the balance sheet date, the aggregate of other deductible temporary
differences for which no deferred tax asset has been recognised was £10.7m
(2024: £18.1m). These differences have no expiry term.
No deferred tax liability is recognised on temporary differences of £147.5m
(2024: £169.2m) relating to the unremitted earnings of overseas subsidiaries
as the Group is able to control the timing of the reversal of these temporary
differences and it is probable that they will not reverse in the foreseeable
future. The temporary differences at 31 December 2025 represent only the
unremitted earnings of those overseas subsidiaries where remittance to the UK
of those earnings may result in a tax liability, principally as a result of
dividend withholding taxes levied by the overseas tax jurisdictions in which
these subsidiaries operate.
13 Dividends payable to equity holders of the parent
Ordinary dividends on equity shares:
2025 2024
£m £m
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2024 of 33.1p (2023: 31.3p) per 23.3 22.6
share
Interim dividend for the year ended 31 December 2025 of 18.3p (2024: 16.6p) 12.9 12.0
per share
36.2 34.6
The Board has recommended a final dividend for the year ended 31 December 2025
of £35.9m, representing 52.1p (2024: 33.1p) per share. The proposed dividend
is subject to approval by shareholders at the Annual General Meeting on 20 May
2026 and has not been included as a liability in these financial statements.
14 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 adjusted for the dilutive impact
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.
There have been no other transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of authorisation of
these financial statements.
Basic and diluted earnings per share are calculated as follows:
Underlying earnings attributable to the equity holders of the parent Earnings attributable to the equity holders of the parent
2025 2024 2025 2024
Basic and diluted earnings (£m) 151.7 147.1 142.7 142.3
Weighted average number of ordinary shares (m)(1)
Basic number of ordinary shares outstanding 70.5 72.1 70.5 72.1
Effect of dilution from:
Share options and awards 1.3 1.5 1.3 1.5
Diluted number of ordinary shares outstanding 71.8 73.6 71.8 73.6
Earnings per share
Basic earnings per share (p) 215.2 204.0 202.4 197.4
Diluted earnings per share (p) 211.3 199.9 198.7 193.3
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.
15 Goodwill and intangible assets
Goodwill Trade names Customer contracts and relationships Other intangibles Total
£m £m £m £m £m
Cost
At 1 January 2024 238.6 32.8 45.2 27.1 343.7
Disposed with businesses - - - (2.1) (2.1)
Reclassification - - - 2.5 2.5
Exchange movements (4.8) (0.6) (0.9) (1.1) (7.4)
At 31 December 2024 and 1 January 2025 233.8 32.2 44.3 26.4 336.7
Additions - - - 0.1 0.1
Exchange movements (8.0) (0.8) (1.3) (1.2) (11.3)
At 31 December 2025 225.8 31.4 43.0 25.3 325.5
Accumulated amortisation and impairment
At 1 January 2024 131.0 28.9 42.6 26.6 229.1
Amortisation charge for the year - 2.1 1.2 0.1 3.4
Disposed with businesses - - - (2.1) (2.1)
Reclassification - - - 2.5 2.5
Exchange movements (4.8) (0.6) (0.9) (1.1) (7.4)
At 31 December 2024 and 1 January 2025 126.2 30.4 42.9 26.0 225.5
Amortisation charge for the year - 0.9 0.7 0.1 1.7
Exchange movements (1.4) (0.8) (1.3) (1.0) (4.5)
At 31 December 2025 124.8 30.5 42.3 25.1 222.7
Carrying amount
At 1 January 2024 107.6 3.9 2.6 0.5 114.6
At 31 December 2024 and 1 January 2025 107.6 1.8 1.4 0.4 111.2
At 31 December 2025 101.0 0.9 0.7 0.2 102.8
Other intangibles represent internally developed software and licences. There
are no indicators of impairment for assets relating to trade names, customer
contracts and relationships or other intangibles as at 31 December 2025.
Assets disposed of during 2024 related mainly to the South African business.
For the purposes of impairment testing, goodwill has been allocated to six
(2024: six) separate cash-generating units (CGUs). The carrying amount of
goodwill allocated to the three CGUs with the largest goodwill balances is
significant in comparison to the total carrying amount of goodwill and
comprises 90% of the total (2024: 90%). The relevant CGUs and the carrying
amount of the goodwill allocated to each are as set out below, together with
the pre-tax discount rate and medium-term growth rate used in their
value-in-use calculations:
2025 2024
Carrying Pre-tax Forecast Carrying Pre-tax Forecast
value discount rate(1) growth rate value discount rate(1) growth rate
CGU Geographical segment £m % % £m % %
Keller US North America 46.5 14.2 2.0 50.1 14.9 2.0
Suncoast North America 31.9 14.0 2.0 34.4 14.8 2.0
Keller Canada North America 12.1 13.0 2.0 12.4 13.6 2.0
Other North America and Europe 10.5 10.7
101.0 107.6
( )
1 Pre-tax discount rates and forecast growth rates are defined
by market.
The recoverable amount of the goodwill allocated to each CGU has been
calculated on a value-in-use basis. The calculations use cash flow projections
based on financial budgets and forecasts approved by management and cover a
three-year period.
The Group's businesses operate in a diverse geographical set of markets, some
of which are expected to continue to face uncertain conditions in future
years. The calculation of value in use for the CGUs is most sensitive to the
following assumptions: forecast operating cash flow, the growth rates used to
extrapolate cash flows beyond the forecast period and discount rates applied
to future cash flows.
Forecast operating cash flow
Operating cash flow is impacted by the forecast revenues and margins assumed
in the forecast. Management considers all the forecast revenues and margins to
be reasonably achievable given recent performance and the historic trading
results of the relevant CGUs. A margin for historical forecasting error has
also been factored into the value-in-use model.
Growth rates
Cash flows beyond 2028 have been extrapolated using the forecast growth rates
in the table above and do not exceed the long-term average growth rates for
the markets in which the relevant CGUs operate. The growth rates used in the
Group's value-in-use calculation into perpetuity are based on forecasted
growth in the construction sector in each region where a CGU is located and
adjusted for longer-term compound annual growth rates for each CGU as
estimated by management.
Discount rates
The discount rates used in the value-in-use calculations are based on the
weighted average cost of capital of companies comparable to the relevant CGUs,
adjusted as necessary to reflect the risk associated with the asset being
tested. The discount rates are set out in the table above.
Sensitivities
Management's assessment for Keller Canada is sensitive to the future
successful execution of the CGU's business plan to meet forecasted margins.
The estimated recoverable amount for Keller Canada exceeds the carrying value
by £36.4m. The forecasted annual operating profit margin for 2026 to 2028 of
7.8% would need to decrease to 4.6% to result in a full impairment of the
carrying value of the goodwill.
For the remaining significant CGUs, management believes that any reasonable
possible change in the key assumptions on which the recoverable amounts of the
CGUs are based would not cause any of their carrying amounts to exceed their
recoverable amounts.
A number of sensitivities were run on the projections to identify the changes
required in each of the key assumptions that, in isolation, would give rise to
an impairment of the following goodwill balances.
Increase in(1) Reduction in(1) Reduction in
discount future growth final year cash
rate rate Flow
CGU Geographical segment % % %
Keller US North America 76.7 n/a 112.9
Suncoast North America 19.3 30.0 79.9
Keller Canada North America 12.9 18.4 69.2
( )
1 The increase in discount rate and reduction in future growth
rate are presented as gross movements.
16 Property, plant and equipment
Property, plant and equipment comprises owned and leased assets.
2025 2024
Note £m £m
Property, plant and equipment - owned assets 16a 373.6 371.5
Right-of-use assets - leased assets 16b 83.3 89.9
At 31 December 456.9 461.4
16 a) Property, plant and equipment - owned assets
Plant,
Land and machinery Capital work
buildings and vehicles in progress Total
£m £m £m £m
Cost
At 1 January 2024 78.6 1,000.4 8.2 1,087.2
Additions 5.0 80.1 3.9 89.0
Disposals (2.1) (40.8) - (42.9)
Net transfers to held for sale(1) (2.3) (13.0) - (15.3)
Disposed with businesses (0.1) (10.2) - (10.3)
Reclassification - 2.7 (2.7) -
Exchange movements (1.5) (20.6) (0.2) (22.3)
At 31 December 2024 and 1 January 2025 77.6 998.6 9.2 1,085.4
Additions 4.4 86.4 (0.5) 90.3
Disposals (1.4) (40.8) - (42.2)
Net transfers (to)/from held for sale(1) (0.2) 5.7 - 5.5
Reclassification 0.1 2.6 (2.7) -
Exchange movements (0.9) (16.9) (0.5) (18.3)
At 31 December 2025 79.6 1,035.6 5.5 1,120.7
Accumulated depreciation and impairment
At 1 January 2024 27.5 664.8 - 692.3
Charge for the year 2.0 76.8 - 78.8
Disposals (1.6) (27.5) - (29.1)
Net transfers to held for sale(1) - (2.4) - (2.4)
Disposed with businesses(2) - (9.5) - (9.5)
Exchange movements (0.5) (15.7) - (16.2)
At 31 December 2024 and 1 January 2025 27.4 686.5 - 713.9
Charge for the year 2.2 75.1 - 77.3
Disposals (0.7) (33.9) - (34.6)
Exchange movements (0.1) (9.4) - (9.5)
At 31 December 2025 28.8 718.3 - 747.1
Carrying amount
At 1 January 2024 51.1 335.6 8.2 394.9
At 31 December 2024 and 1 January 2025 50.2 312.1 9.2 371.5
At 31 December 2025 50.8 317.3 5.5 373.6
1 The carrying amount of assets held for sale at the balance
sheet date are detailed in note 22.
2 Assets disposed with the South African business in 2024 as
detailed in note 5.
The Group had contractual commitments for the acquisition of property, plant
and equipment of £11.5m (2024: £16.9m) at the balance sheet date. These
amounts were not included in the balance sheet at the year end.
16 b) Right-of-use assets - leased assets
The Group has lease contracts for various items of land and buildings, plant,
machinery and vehicles used in its operations. Leases of land and buildings
generally have lease terms between 3 and 15 years, while plant, machinery and
vehicles generally have lease terms between two and eight years. The Group's
obligations under its leases are secured by the lessor's title to the lease
assets. Generally, the Group is restricted from assigning and sub-leasing its
leased assets. There are several lease contracts that include extension and
termination options.
The Group has certain leases of machinery with lease terms of 12 months or
less and leases of office equipment with low value. The Group applies the
'short-term lease' and 'lease of low-value assets' recognition exemptions for
these leases.
Set out below are the carrying amounts of the right-of-use assets recognised
and the movements during the year:
Plant,
Land and machinery
buildings and vehicles Total
£m £m £m
At 1 January 2024 52.0 33.3 85.3
Additions 7.6 18.8 26.4
Depreciation expense (15.3) (14.6) (29.9)
Contract modifications 9.7 (0.9) 8.8
Exchange movements (0.5) (0.2) (0.7)
At 31 December 2024 and 1 January 2025 53.5 36.4 89.9
Additions 1.7 19.7 21.4
Depreciation expense (15.1) (16.6) (31.7)
Contract modifications 7.4 (0.2) 7.2
Exchange movements (2.2) (1.3) (3.5)
At 31 December 2025 45.3 38.0 83.3
The carrying amounts of lease liabilities (included within note 26 within
loans and borrowings) and the movements during the year are set out in note
27.
17 Investments in joint ventures
The Group's investment in joint ventures relates to a 50% interest in the
ordinary shares of KFS Finland Oy, an entity incorporated in Finland.
2025
£m
At 1 January 2025 4.8
Share of underlying post-tax results 0.8
Exchange movements 0.3
At 31 December 2025 5.9
2024
£m
At 1 January 2024 4.5
Share of underlying post-tax results 0.5
Exchange movements (0.2)
At 31 December 2024 4.8
In 2025, KFS Finland Oy earned total revenue of £58.2m (2024: £60.4m) and a
statutory profit after tax for the year of £1.6m (2024: £1.0m).
The joint venture had no contingent liabilities or commitments as at 31
December 2025 (2024: £nil).
Aggregate amounts relating to joint ventures:
2025 2024
Underlying Statutory Underlying Statutory
£m £m £m £m
Revenue 58.2 58.2 60.4 60.4
Operating costs(1) (56.0) (56.0) (59.2) (59.2)
Operating profit 2.2 2.2 1.2 1.2
Finance costs (0.2) (0.2) (0.2) (0.2)
Profit before taxation 2.0 2.0 1.0 1.0
Taxation (0.4) (0.4) - -
Profit for the year 1.6 1.6 1.0 1.0
Group's share of post-tax results 0.8 0.8 0.5 0.5
( )
1 Included within operating costs is depreciation on
owned assets of £2.2m (2024: £1.8m).
KFS Finland Oy Group's portion of
(100% of results) the joint venture
2025 2024 2025 2024
£m £m £m £m
Non-current assets 15.4 15.4 7.7 7.7
Cash and cash equivalents 3.2 2.8 1.6 1.4
Other current assets 7.0 8.2 3.5 4.1
Total assets 25.6 26.4 12.8 13.2
Other current liabilities (7.0) (8.6) (3.5) (4.3)
Non-current loans and borrowings (6.6) (7.8) (3.3) (3.9)
Other non-current liabilities (0.4) (0.4) (0.2) (0.2)
Total liabilities (14.0) (16.8) (7.0) (8.4)
Net assets 11.6 9.6 5.8 4.8
18 Other non-current assets
2025 2024
£m £m
Non-qualifying deferred compensation plan assets 20.7 23.0
Customer retentions 76.1 33.7
Other assets 0.9 1.3
Insurance receivables 7.9 30.3
105.6 88.3
A non-qualifying deferred compensation plan (NQ) is available to US employees,
whereby an element of eligible employee bonuses and salary is deferred over a
period of four to six years. The plan allows participants to receive tax
relief for contributions beyond the limits of the tax-free amounts allowed per
the 401k defined contribution pension plan. The plan is administered by a
professional investment provider with participants able to select their
investments from an approved listing. An amount equal to each participant's
compensation deferral is transferred into a trust and invested in various
marketable securities. The related trust assets are not identical to
investments held on behalf of the employee but are invested in similar funds
with the objective that performance of the assets closely tracks the
liabilities. The investments held in the trust are designated solely for the
purpose of paying benefits under the non-qualified deferred compensation plan.
The investments in the trust would however be available to all unsecured
general creditors in the event of insolvency.
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.
Invoiced amounts for customer retentions are balances typically payable at the
end of a construction project, when all contractual performance obligations
have been met, and are therefore received over a longer period of time.
At 31 December 2025, non-current assets in relation to the investments held in
the trust were £20.7m (2024: £23.0m). The fair value movement on these
assets was £2.4m (2024: £2.1m). During the period proceeds from the sale of
NQ-related investments were £2.7m (2024: £nil). At 31 December 2025,
non-current liabilities in relation to the participant investments were
£15.9m (2024: £15.6m). These are accounted for as financial liabilities at
fair value through profit or loss. The fair value movement on these
liabilities was £2.3m (2024: £2.1m). During the year £0.4m (2024: £1.2m)
of compensation was deferred.
Further details on insurance receivables are given in note 24.
19 Inventories
2025 2024
£m £m
Raw materials and consumables 55.9 49.2
Work in progress 1.4 1.1
Finished goods 29.5 31.3
86.8 81.6
During 2025, £1.9m (2024: £2.0m) of inventory write-downs were recognised as
an expense for inventories carried at net realisable value. This is recognised
within operating costs in the consolidated income statement.
20 Trade and other receivables
2025
2024
£m £m
Trade receivables 548.3 575.1
Contract assets 119.6 119.2
Other receivables 22.4 23.7
Prepayments 34.3 41.0
Insurance receivables 11.0 -
Fair value of derivative financial instruments 0.1 0.1
735.7 759.1
Further details on insurance receivables included within other receivables are
given in note 24.
Trade receivables and contract assets included in the balance sheet are shown
net of expected credit loss provisions as detailed in note 2.
The movement in the allowance for expected credit losses of trade receivables
and contract assets is as follows:
2024
2025
£m £m
At 1 January 52.3 45.1
Used during the year (1.7) (2.7)
Additional provisions 16.1 21.0
Unused amounts reversed (16.6) (9.0)
Disposal of businesses - (1.3)
Exchange movements (2.3) (0.8)
At 31 December(1) 47.8 52.3
(1) Of this amount £24.3m (2024: £27.0m) is subject to
enforcement activity.
Set out below is information about the credit risk exposure on the Group's
trade receivables and contract assets, detailing past due but not impaired,
based on agreed terms and conditions with the customer:
2025
Contract assets Trade receivables and
non-current customer retentions
Days past due
Total Current <30 days 31-90 days >90 days Total
£m £m £m £m £m £m
Expected credit loss rate 0% 2% 2% 1% 60% 7%
Estimated total gross carrying amount at default 120.1 479.3 88.0 47.1 57.3 671.7
Allowance for expected credit loss (0.5) (10.6) (2.0) (0.4) (34.3) (47.3)
Carry amount as shown in the balance sheet 119.6 468.7 86.0 46.7 23.0 624.4
2024
Contract assets Trade receivables and
non-current customer retentions
Days past due
Total Current <30 days 31-90 days >90 days Total
£m £m £m £m £m £m
Expected credit loss rate 1% 1% 2% 1% 64% 8%
Estimated total gross carrying amount at default 120.8 460.9 80.1 52.6 65.9 659.5
Allowance for expected credit loss (1.6) (6.7) (1.5) (0.4) (42.1) (50.7)
Carry amount as shown in the balance sheet 119.2 454.2 78.6 52.2 23.8 608.8
The Group's expected credit loss rate for trade receivables and non-current
customer retentions that were more than 90 days past due reduced from 64% in
2024 to 60% in 2025. The reduction was driven by the unused amounts reversed
of £16.6m (2024: £9.0m) which included a large trade receivable, provided
for in prior years, but recovered during the year after a prolonged legal
process.
21 Cash and cash equivalents
2025 2024
£m £m
Bank balances 142.3 116.1
Short-term deposits 139.2 91.6
Cash and cash equivalents in the balance sheet 281.5 207.7
Cash and cash equivalents in the cash flow statement 281.5 207.7
Cash and cash equivalents include £4.0m (2024: £5.0m) of the Group's share
of cash and cash equivalents held by joint operations.
22 Assets held for sale
2025 2024
£m £m
Land and buildings 0.2 -
Plant and machinery - 9.2
0.2 9.2
During 2025, £0.2m (2024: £12.9m) of assets were transferred from property,
plant and equipment to Assets held for sale and £5.7m (2024: £nil) of assets
were transferred from assets held for sale to property, plant and equipment.
The assets transferred to property, plant and equipment comprised of £5.1m of
rigs in Saudi Arabia that were subsequently brought into use elsewhere and an
electric crane in Australia of £0.6m that is also now in use.
During the year, an asset in Australia with a net book value of £2.9m (2024:
£2.4m) was sold for a total cash consideration of £3.0m (2024: £6.5m)
resulting in a gain from the disposal of assets of £0.1m (2024: £4.1m) which
is included in operating costs. £2.3m of the cash consideration for the asset
was receivable as at 31 December 2025 and this balance is included in other
receivables in note 20.
At 31 December 2025, assets held for sale comprised of a property in the
United States costing £0.2m. At 31 December 2024, assets held for sale
comprised of drilling rigs in Saudi Arabia costing £4.2m, a cargo ship in
Australia costing £2.8m, other assets in Saudi Arabia costing £1.3m and
other assets in Australia costing £0.2m, all of which were added during the
period and an electric crane in Australia costing £0.6m.
23 Trade and other payables
2025 2024
£m £m
Trade payables 191.1 168.0
Other taxes and social security payable 16.1 17.2
Other payables 182.6 163.3
Contract liabilities 98.3 115.2
Accruals 138.5 142.9
Non-qualifying compensation plan liabilities 1.9 1.4
Fair value of derivative financial instruments 0.4 0.7
628.9 608.7
Other payables includes contingent and deferred consideration of £0.5m (2024:
£0.6m), interest payable of £5.6m (2024: £6.0m), and contract specific
accruals of £151.1m (2024: £131.3m).
24 Provisions
Employee Restructuring Contract Insurance Other
and legal
provisions provisions provisions provisions provisions Total
£m £m £m £m £m £m
As at 31 December 2024 11.0 4.0 66.3 90.6 2.6 174.5
Charge for the year 4.6 1.2 50.9 14.0 0.3 71.0
Used during the year (2.9) (2.6) (33.9) (1.8) (0.1) (41.3)
Unused amounts reversed (0.1) (0.1) (8.8) (14.6) (0.5) (24.1)
Unwinding of discount 0.2 - - 0.6 - 0.8
Exchange movements (0.5) - (1.6) (1.8) (0.1) (4.0)
At 31 December 2025 12.3 2.5 72.9 87.0 2.2 176.9
Current 5.6 2.4 60.7 20.8 2.1 91.6
Non-current 6.7 0.1 12.2 66.2 0.1 85.3
At 31 December 2025 12.3 2.5 72.9 87.0 2.2 176.9
Employee provisions
Employee provisions relate to various liabilities in respect of employee
rights and benefits, including the workers' compensation scheme in North
America and long service leave benefits in Australia.
At 31 December 2025, the provision in respect of workers' compensation was
£6.4m (2024: £7.2m). A provision is recognised when an employee informs the
company of a workers' compensation claim. The provision is measured based on
information provided by the workers' compensation insurer. The actual costs
that may be incurred in respect of these claims are dependent on the
assessment of an employee's claim and potential medical expenses, with timing
of outflows variable depending on the claim.
At 31 December 2025, the provision in respect of long service leave was £2.7m
(2024: £2.1m). A provision is recognised at the point an employee joins the
company, with an adjustment made to factor the likelihood that the employee
will remain in continuous service with the company to meet the threshold to
receive the benefits. It is measured on an IAS 19 basis, at the present value
of expected future benefit for services provided by employees up to the
reporting date. The actual costs that may be incurred are dependent on the
length of service for employees and amended for any starters and leavers. The
provision is utilised when the leave is taken by the employee or when unused
leave is paid on termination of employment.
Employee provisions also includes an amount of £1.6m (2024: £1.7m) in
respect of social security contributions on share options. This provision is
utilised as the options are exercised by employees, which occurs when the
awards vest. The provision covers three years of open share options and will
be utilised each year as the options vest.
Restructuring provisions
A restructuring provision is recognised when the Group has developed a
detailed formal plan for the restructuring, has raised a valid expectation in
those individuals affected and liabilities have been identified. The
measurement of a restructuring provision includes only the direct expenditures
arising from the restructuring. The provisions comprise mainly amounts for
redundancy costs. Estimates may differ from the actual charges depending on
the finalisation of redundancy amounts. These provisions are expected to be
utilised within the next 12 months.
The restructuring provisions in 2025 includes amounts provided in the year for
exit costs arising from the closure of the Mauritius business.
The restructuring provisions in 2024 included amounts provided in the year for
senior management changes, the majority of which had been utilised by year
end.
Contract provisions
Contract provisions include onerous contracts where the forecast costs of
completing the contract exceed the revenue and provision for potential
remediation or damages costs that we believe are probable to incur.
Provision for onerous contracts is made in full when such losses are foreseen,
based on the estimated unavoidable costs of meeting the obligations of the
contract, where these exceed the economic benefits expected to be received.
The unavoidable costs under a contract reflect the least net cost of exiting
from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it. The actual loss
incurred is uncertain until the project has been completed, and the actual
costs incurred to complete the contract could be higher or lower than
estimated in the calculation of the provision. The majority of this balance is
expected to be utilised in the next 12 months, given the general short-term
nature of contracts.
Provision for potential remediation or damages costs typically arises after
the completion of a project through a customer claim or dispute. The provision
reflects our estimate of costs to be incurred in relation to the dispute, some
disputes can take a long period of time to resolve and the actual amount
incurred could be higher or lower than our provision, so there is uncertainty
over both the amount and the timing of the expected cash outflows. The
non-current element of the provision relates to disputes we expect will take
longer than a year to resolve.
Insurance and legal provisions
Insurance and legal provisions comprises the liability for legal claims
against the Group, including those that are retained within the Group's
captive insurer (the 'captive'). The captive covers both public liability and
professional indemnity claims for the Group. The captive covers liabilities
below an upper limit above which third-party insurance applies. The provision
also includes matters relating to separate legal issues which are not covered
by the captive, including claims arising from civil matters which could result
in penalties and legal costs. By their nature the amounts and timings of any
outflows are difficult to predict.
Provisions for insurance and legal claims are made based on the best estimate
of the likely total settlement value of a claim against the Group. Management
seek specialist input from legal advisers and the Group's insurance claims
handler to estimate the most likely legal outcome. The outcome of legal
negotiations is inherently uncertain; as a result, there can be no guarantee
that the assumptions used to estimate the provision will result in an accurate
prediction of the actual costs that may be incurred.
A provision is recognised when it is judged likely that a legal claim will
result in a payment to the claimant and the amount of the claim can be
reliably estimated. Provisions are utilised as insurance or other legal claims
are settled, which may take a number of years. A separate insurance receivable
is recognised to the extent that confirmed third-party insurance is expected
to cover any element of an estimated claim value and is virtually certain to
be recovered. The asset is recognised within other non-current assets (refer
to note 18) and trade and other receivables (refer to note 20). Management
considers that there are no instances of reimbursable assets which are
probable in nature.
During the year £14.6m of the insurance related provision was reversed, this
mainly related to two insured claims settled during the year for amounts less
than originally provided. The reduction in the provision for these two claims
was matched by a reduction in the insurance receivable and therefore had no
impact on the income statement for the period.
Other provisions
Other provisions are in respect of property dilapidation arising from lease
obligations and other operational provisions. Where a lease includes a
'make-good' requirement, provision for the cost is recognised as the
obligation is incurred, either at the commencement of the lease or as a
consequence of using the asset, and the cost of the expected work required can
be reliably estimated. These are expected to be utilised over the relevant
lease term which ranges from 3 to 15 years across the Group.
25 Other non-current liabilities
2025 2024
£m £m
Non-qualifying compensation plan liabilities 15.9 15.6
Other liabilities 1.4 3.0
17.3 18.6
Other liabilities include contingent consideration of £0.6m (2024: £2.6m).
Refer to note 18 for further information on the non-qualifying deferred
compensation plan.
26 Financial instruments
Exposure to credit, interest rate and currency risks arise in the normal
course of the Group's business and have been identified as risks for the
Group. Derivative financial instruments are used to hedge exposure to
fluctuations in foreign exchange and interest rates.
The Group does not trade in financial instruments nor does it engage in
speculative derivative transactions.
Currency risk
The Group faces currency risk principally on its net assets, most of which are
in currencies other than sterling. The Group aims to reduce the impact that
retranslation of these net assets might have on the consolidated balance sheet
by matching the currency of its borrowings, where possible, with the currency
of its assets. The majority of the Group's borrowings are held in US dollars.
The Group manages its currency flows to minimise transaction exchange risk.
Forward contracts are used to hedge significant individual transactions. The
majority of such currency flows within the Group relate to the repatriation of
profits, intra-group loan repayments and any foreign currency cash flows
associated with acquisitions. The Group's treasury risk management is
performed at the Group's head office.
As at 31 December 2025, the fair value of outstanding foreign exchange forward
contracts was £0.1m (2024: 0.1m) included in current assets and £0.4m (2024:
£0.7m) included in current liabilities.
Interest rate risk
Our objectives are to add stability to the interest expense and to manage our
exposure to interest rate movements. To accomplish these objectives, we
primarily use fixed rate external debt and have previously used interest rate
swaps as part of our interest rate risk management strategy.
Interest rate risk is managed by either fixed or floating rate borrowings
dependent upon the purpose and term of the financing.
As at 31 December 2025, 100% (2024: 100%) of the Group's third-party
borrowings were at fixed interest rates.
Hedging currency risk and interest rate risk
The Group currently uses hedge accounting to manage currency risk only. Where
hedging instruments are used to hedge significant individual transactions, the
Group ensures that the critical terms, including dates, currencies, nominal
amounts, interest rates and lengths of interest periods, are matched. The
Group uses both qualitative and quantitative methods to confirm this and to
assess the effectiveness of the hedge.
There are no derivatives or other hedging instruments in place at the balance
sheet date held for the purpose of hedging interest rate risk.
Credit risk
The Group's principal financial assets are trade and other receivables, bank
and cash balances and a limited number of investments and derivatives held to
hedge certain Group exposures. These represent the Group's maximum exposure to
credit risk in relation to financial assets.
The Group has procedures to manage counterparty risk and the assessment of
customer credit risk is embedded in the contract tendering processes. The
counterparty risk on bank and cash balances is managed by limiting the
aggregate amount of exposure to any one institution by reference to their
credit rating and by regular review of these ratings.
Customer credit risk is mitigated by the Group's relatively small average
contract size and diversity, both geographically and in terms of end markets.
No individual customer represented more than 4% of revenue in 2025 (2024: 4%).
The ageing of trade receivables that were past due but not impaired is shown
in note 20.
The Group evaluates each new customer and assesses their creditworthiness
before any contract is undertaken.
The Group reviews customer receivables (including contract assets) on an
ageing basis and provides against expected unrecoverable amounts. Experience
has shown the level of historical provision required to be relatively low.
Credit loss provisioning reflects past experience, economic factors and
specific conditions.
The Group's estimated exposure to credit risk for trade receivables and
contract assets is disclosed in note 20. This amount is the accumulation of
several years of provisions for known or expected credit losses.
Liquidity risk and capital management
The Group's capital structure is kept under constant review, taking into
account the need for availability and cost of various sources of funding. The
capital structure of the Group consists of net debt and equity as shown in the
consolidated balance sheet. The Group maintains a balance between the
certainty of funding and a flexible, cost-effective financing structure, with
all main borrowings being from committed facilities. The Group's policy
ensures that its capital structure is appropriate to support this balance and
the Group's operations.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt. The Group's debt and committed
facilities mainly comprise a $120m private placement repayable in August 2030,
a $180m private placement repayable in August 2033 and a £400m syndicated
revolving credit facility (RCF) expiring in June 2030.
When agreed in 2024, the RCF had an extension option for two further years to
June 2030 and June 2031, with the agreement of the lending banks, and its
terms and conditions are materially the same as the prior facility. In June
2025, the first extension option was exercised, and the facility therefore now
expires in June 2030. The RCF remained undrawn at 31 December 2025.
The private placement debt and RCF are subject to certain covenants linked to
the Group's financing structure, specifically regarding the ratios of net debt
and interest to profit. The covenants are calculated on an IAS 17 basis;
EBITDA to net debt leverage must be below three times and EBITDA interest
cover must be above four times. The covenants are tested at the half-year and
year-end reporting dates. The liability for the private placement debt has
been presented as a non-current liability as it is not due to be repaid until
2030 and 2033, and we do not anticipate having any difficulty in complying
with the covenants. The Group has complied with these covenants throughout the
year, and the going concern assessment detailed in note 1 indicated that the
covenants would not be breached in our most extreme downside scenario
incorporating an aggregation of all risks considered.
At the year end, the Group also had other borrowing facilities available of
£47.1m (2024: £47.4m).
Private placements
In August 2023, $120m and $180m were raised through a private placement with
US institutions. The US private placement notes are accounted for on an
amortised cost basis and are retranslated at the exchange rate at each period
end. The carrying value of the $120m and $180m private placement liabilities
at 31 December 2025 were £88.6m and £133.0m, respectively.
In December 2024, the Group repaid $75m of US private placement notes as they
fell due. The repayment was funded from the proceeds of the 2023 US private
placement notes.
Hedging
The Group entered into a Treasury lock on 28 April 2023 designated as a cash
flow hedge against the highly probable cash outflows for the interest payments
on the US private placement notes issued in August 2023. A Treasury lock is a
synthetic forward sale of a US Treasury note, which is settled in cash based
upon the difference between an agreed-upon treasury rate and the prevailing
treasury rate at settlement. Such Treasury locks are entered into to
effectively fix the underlying treasury rate component of an upcoming debt
issuance. The Treasury lock was settled on 26 May 2023. The gain from the
proceeds of the hedging instrument was recognised in the hedging reserve and
an amount is transferred to the income statement as the cash flows are
realised.
All hedges are tested for effectiveness every six months. All hedging
relationships remained effective during the year while they were in place.
Accounting classifications 2025 2024
£m £m
Financial assets measured at fair value through profit or loss
Non-qualifying deferred compensation plan 20.7 23.2
Forward contracts 0.1 0.1
Financial assets measured at amortised cost
Trade receivables (including non-current customer retentions) 624.4 608.8
Contract assets 119.6 119.2
Cash and cash equivalents 281.5 207.7
Financial liabilities at fair value through profit or loss
Non-qualifying compensation plan liabilities (17.8) (17.0)
Contingent consideration payable (1.1) (3.2)
Forward contracts (0.4) (0.7)
Financial liabilities measured at amortised cost
Trade payables (191.1) (168.0)
Contract liabilities (98.3) (115.2)
Bank and other loans (218.9) (236.6)
Lease liabilities (91.5) (98.0)
Effective interest rates and maturity analysis
In respect of financial liabilities, the following table indicates their
effective interest rates and undiscounted contractual cash flows at the
balance sheet date:
2025
Due after Carrying amount
Effective Due within Due within Due within more than as shown in the
interest rate 1 year 1-2 years 2-5 years 5 years Total balance sheet
% £m £m £m £m £m £m
Bank loans and overdrafts 1.5 (0.1) (0.1) - - (0.2) (0.1)
Other loans and private placements 6.4 (14.3) (14.3) (129.4) (155.7) (313.7) (218.8)
Lease liabilities 6.8 (34.9) (26.9) (34.0) (8.9) (104.7) (91.5)
Contract liabilities - (98.3) - - - (98.3) (98.3)
Trade payables - (191.1) - - - (191.1) (191.1)
Non-qualifying compensation plan liabilities - (1.9) (2.7) (2.1) (11.1) (17.8) (17.8)
Forward contracts - (0.4) - - - (0.4) (0.4)
Contingent consideration - (0.5) (0.4) (0.2) - (1.1) (1.1)
(341.5) (44.4) (165.7) (175.7) (727.3) (619.1)
2024
Due after Carrying amount
Effective Due within Due within Due within more than as shown in the
interest rate 1 year 1-2 years 2-5 years 5 years Total balance sheet
% £m £m £m £m £m £m
Bank loans and overdrafts 1.4 (0.3) (0.1) - - (0.4) (0.4)
Other loans and private placements 6.4 (15.4) (15.4) (46.1) (277.1) (354.0) (236.2)
Lease liabilities - (33.1) (27.0) (40.8) (13.6) (114.5) (98.0)
Contract liabilities - (115.2) - - - (115.2) (115.2)
Trade payables - (168.0) - - - (168.0) (168.0)
Non-qualifying compensation plan liabilities - (1.8) (2.5) (2.1) (10.6) (17.0) (17.0)
Forward contracts - (0.7) - - - (0.7) (0.7)
Contingent consideration - (0.6) (1.0) (2.0) - (3.6) (3.2)
(335.1) (46.0) (91.0) (301.3) (773.4) (638.7)
Loans and borrowings analysis
2025 2024
£m £m
$120m private placement (due August 2030) (88.6) (95.7)
$180m private placement (due August 2033) (133.0) (143.6)
Deferred financing costs 2.8 3.1
Bank overdrafts - -
Other bank borrowings (0.1) (0.4)
Lease liabilities (note 27) (91.5) (98.0)
Total loans and borrowings (310.4) (334.6)
The Group has substantial borrowing facilities available to it. The undrawn
committed facilities available at 31 December 2025 amounted to £400.0m (2024:
£400.0m), this is the Group's unutilised £400m revolving credit facility,
which expires on 4 June 2030. In addition, the Group had undrawn uncommitted
borrowing facilities totalling £47.1m at 31 December 2025 (2024: £47.4m).
Other uncommitted bank borrowing facilities are normally reaffirmed by the
banks annually, although they can theoretically be withdrawn at any time.
Facilities totalling £nil (2024: £nil) are secured against certain assets.
Future obligations under finance leases on a former IAS 17 basis totalled
£3.1m (2024: £0.6m), including interest of £0.2m (2024: £0.1m).
Changes in loans and borrowings were as follows:
Foreign
2024 Cash flows Other(1) New leases exchange movements Fair value changes 2025
£m £m £m £m £m £m £m
Bank loans (0.4) 0.3 - - - - (0.1)
Private placements (239.3) - (0.1) - 17.8 - (221.6)
Deferred financing costs 3.1 0.5 (0.8) - - - 2.8
Lease liabilities (note 27) (98.0) 37.5 (13.6) (21.4) 4.0 - (91.5)
Total loans and borrowings (334.6) 38.3 (14.5) (21.4) 21.8 - (310.4)
1 Other comprises disposals and contract modifications and
interest accretion on lease liabilities and the amortisation of deferred
financing costs on bank loans and private placements.
Changes in loans and borrowings in the prior year were as follows:
Foreign
2023 Cash flows Other(1) New leases exchange movements Fair value changes 2024
£m £m £m £m £m £m £m
Bank overdrafts (2.4) 2.4 - - - - -
Bank loans (0.8) 0.4 - - - - (0.4)
Private placements (294.4) 58.6 (0.2) - (3.3) - (239.3)
Deferred financing costs 0.5 3.5 (0.9) - - - 3.1
Lease liabilities (note 27) (91.6) 34.2 (15.0) (26.4) 0.8 - (98.0)
Total loans and borrowings (388.7) 99.1 (16.1) (26.4) (2.5) - (334.6)
1 Other comprises disposals and contract modifications and
interest accretion on lease liabilities and the amortisation of deferred
financing costs on bank loans.
Cash flow hedges
At 31 December 2025, the Group held foreign exchange forward contracts to
hedge exposures to changes in foreign currency rates. The net value of
instruments held was £0.4m (2024: £0.7m).
2025
Maturity Carrying amount Change in fair
value used for
calculating
hedge Nominal
<1 year 1-2 years 2-5 years >5 years Asset Liability ineffectiveness amount
£m £m £m £m £m £m £m £m
Forward exchange forwards (0.4) - - - - (0.4) - (0.4)
2024
Maturity Carrying amount Change in fair
value used for
calculating
hedge Nominal
<1 year 1-2 years 2-5 years >5 years Asset(1) Liability ineffectiveness amount
£m £m £m £m £m £m £m £m
Forward exchange forwards (0.7) - - - - (0.7) - (0.7)
Fair value hedges
At 31 December 2025, the Group held no instruments to hedge exposures to
changes in interest rates (2024: £nil).
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.
Derivatives
The fair values of foreign currency forward contracts are calculated based on
achieved contract rates compared to the prevailing market rates at the balance
sheet date. The valuation methods of all of the Group's derivative financial
instruments carried at fair value are categorised as Level 2. Level 2 assets
are financial assets and liabilities that do not have regular market pricing,
but whose fair value can be determined based on other data values or market
prices.
Interest-bearing loans and borrowings
Fair value is calculated based on expected future principal and interest cash
flows discounted using appropriate discount rates prevailing at the balance
sheet date.
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. The individually significant unobservable inputs used in the fair
value measurement of the Group's contingent consideration as at 31 December
2025 are the estimation of future profits at Keller Arabia in order to
determine the expected outcome of the earnout arrangement.
The following table shows a reconciliation from the opening to closing
balances for contingent and deferred consideration:
2025 2024
£m £m
At 1 January 3.2 10.7
Paid during the period (0.6) (0.9)
Fair value in the income statement during the period (note 9) (1.3) (6.4)
Exchange movements (0.2) (0.2)
At 31 December 1.1 3.2
( )
On 29 August 2023, the Group acquired the 35% interest in the voting shares of
Keller Company Limited (formerly Keller Turki Company Limited). A contingent
consideration is payable annually between the years 2023 and 2027, dependent
on the qualifying revenue generated by the business for each of those years.
The fair value of the contingent consideration as at 31 December 2025 was
£1.1m (SAR 5.6m).
Total contingent consideration of £0.6m (2024: £0.7m) was paid during the
year, in respect of the acquisition of the 35% interest in the voting shares
of Keller Company Limited in 2023. During 2024, £0.2m of deferred
consideration was also paid in respect of the Voges Drilling acquisition in
2021.
In 2025, a fair value movement of £1.3m (2024: £5.2m) related to Keller
Company Limited. During 2024, there were also fair value movements during the
year of £0.8m related to contingent consideration on the GKM Consultants Inc.
acquisition and £0.4m related to deferred consideration on the Nordwest
Fundamentering AS acquisition, which both took place in 2022.
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 assets and liabilities
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 of the assets and related liabilities
are recorded within net finance costs in the consolidated income statement.
Refer to note 18 for further information on the non-qualifying deferred
compensation plan.
Interest rate and currency profile
The profile of the Group's financial assets and financial liabilities after
taking account of the impact of hedging instruments was as follows:
2025
GBP USD EUR CAD AUD Other Total
Weighted average fixed debt interest rate (%) - 6.4 1.5 - - - 6.4
Weighted average fixed debt period (years) - 6.4 2.0 - - - 6.4
2025
GBP USD EUR CAD AUD Other Total
£m £m £m £m £m £m £m
Fixed rate financial liabilities - (218.8) (0.1) - - - (218.9)
Lease liabilities (4.4) (58.9) (6.9) (3.0) (3.4) (14.9) (91.5)
Cash and cash equivalents 99.0 60.1 16.5 13.2 24.4 68.3 281.5
Net debt 94.6 (217.6) 9.5 10.2 21.0 53.4 (28.9)
Trade receivables (including non-current customer retentions) 7.0 398.3 45.8 42.3 24.1 106.9 624.4
Trade payables (4.6) (96.7) (27.2) (9.3) (13.0) (40.3) (191.1)
2024
GBP USD EUR CAD AUD Other Total
Weighted average fixed debt interest rate (%) - 6.4 1.4 - - - 6.4
Weighted average fixed debt period (years) - 7.4 1.7 - - - 7.4
2024
GBP USD EUR CAD AUD Other Total
£m £m £m £m £m £m £m
Fixed rate financial liabilities - (236.2) (0.4) - - - (236.6)
Lease liabilities (5.7) (66.1) (7.6) (4.2) (4.3) (10.1) (98.0)
Cash and cash equivalents 93.8 6.0 16.7 6.8 27.9 56.5 207.7
Net debt 88.1 (296.3) 8.7 2.6 23.6 46.4 (126.9)
Trade receivables (including non-current customer retentions) 8.2 405.2 39.6 60.2 19.6 76.0 608.8
Trade payables (6.9) (82.9) (27.2) (5.6) (3.7) (41.7) (168.0)
Sensitivity analysis
At 31 December 2025, all borrowings are at fixed rate, therefore the only
interest rate exposure is on the rate of interest earned on cash and cash
equivalents. it is estimated that an increase of 500 basis points in interest
rates would have increased the Group's profit before taxation by approximately
£0.9m (2024: £0.9m).
It is estimated that a general increase of 10 percentage points in the value
of sterling against other principal foreign currencies would have decreased
the Group's profit before taxation and non‑underlying items by approximately
£23m for the year ended 31 December 2025 (2024: £21m). The estimated impact
of a 10 percentage point decrease in the value of sterling is an increase of
£28m (2024: £26m) in the Group's profit before taxation and non-underlying
items. This sensitivity relates to the impact of retranslation of foreign
earnings only. The impact on the Group's earnings of currency transaction
exchange risk is not significant. These sensitivities assume all other factors
remain constant.
27 Lease liabilities
Set out below are the carrying amounts of lease liabilities (included within
note 26 within loans and borrowings) and the movements during the year:
2025 2024
£m £m
At 1 January 98.0 91.6
Additions 21.4 26.4
Contract modifications 7.2 8.8
Interest expense 6.4 6.2
Payments (37.5) (34.2)
Exchange movements (4.0) (0.8)
At 31 December 91.5 98.0
Current 29.9 27.5
Non-current 61.6 70.5
28 Share capital and reserves
2025 2024
£m £m
Allotted, called up and fully paid equity share capital:
73,099,735 ordinary shares of 10p each (2024: 73,099,735) 7.3 7.3
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.
As at 31 December 2025, the total number of shares held in treasury was
2,686,898 (2024: 123,153). The increase in treasury shares reflects 2,570,100
shares (2024: nil) purchased under the Group's announced share buyback
arrangements. The cost of the market purchases was £38.9m (2024: £nil). In
addition, 6,355 treasury shares (2024: 199,980) were issued to satisfy
obligations under the Keller Group plc Long Term Incentive Plan.
During the year to 31 December 2025, 253,175 ordinary shares were purchased by
the Keller Group Employee Benefit Trust (2024: 1,454,195 purchased) 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 year (2024: 426,686). This brings the total ordinary shares held by the
Employee Benefit Trust to 1,163,322 (2024: 1,564,680). The cost of the market
purchases was £3.6m (2024: £20.1m).
There is a dividend waiver in place for both shares held in treasury and by
the Keller Group Employee Benefit Trust.
29 Related party transactions
Transactions between the parent, its subsidiaries and joint operations, which
are related parties, have been eliminated on consolidation. Other related
party transactions are disclosed below:
Compensation of key management personnel
The remuneration of the Board and Executive Committee, who are the key
management personnel, comprised:
2025 2024
£m £m
Short-term employee benefits 8.7 8.5
Post-employment benefits 0.3 0.3
Termination payments - -
9.0 8.8
Other related party transactions
As at 31 December 2025, there was a net balance of £nil (2024: £nil) owed by
the joint venture. These amounts are unsecured, have no fixed date of
repayment and are repayable on demand.
30 Commitments
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not
yet incurred was £11.5m (2024: £16.9m) and relates to property, plant and
equipment purchases.
31 Guarantees, contingent liabilities and contingent assets
Claims and disputes arise, both in the normal course of business and in
relation to the historic construction activities of the Group, some of which
lead to litigation or arbitration procedures. Such claims are predominantly
covered by the Group's insurance arrangements. The Group recognises provisions
for liabilities when it is more likely than not that a settlement will be
required and the value of such a payment can be reliably estimated.
At 31 December 2025, the Group had outstanding standby letters of credit and
surety bonds for the Group's captive and other global insurance arrangements
totalling £43.2m (2024: £34.8m). The Group enters into performance and
advance payment bonds and other undertakings in the ordinary course of
business, using guarantee facilities with financial institutions to provide
these bonds to customers. At 31 December 2025, the Group had £162.7m
outstanding related to performance and advanced payment bonds (2024:
£167.1m). These are treated as a contingent liability until such time it
becomes probable that payment will be required under the individual terms of
each arrangement. It is judged to be a remote possibility that a payment will
be required under any of the current performance or advance payment bonds.
At 31 December 2025, the Group had no contingent assets (2024: £nil).
32 Share-based payments
The Group operates a Long Term Incentive Plan (the 'Plan'). Under the Plan,
Executive Directors and certain members of senior management are granted
nil-cost share options with a vesting period of three years. The awards are
exercised automatically on vesting, in addition the Executive Directors are
subject to a two-year post-vesting holding period.
Performance share awards are granted to Executive Directors and key management
personnel which are subject to performance conditions including total
shareholder return, earnings per share, return on capital employed and
operating profit margin. Conditional awards are granted under which senior
management receive shares subject only to service conditions, ie the
requirement for participants to remain in employment with the Group over the
vesting period. Participants are entitled to receive dividend equivalents on
these awards.
Outstanding awards are as follows:
Number
Outstanding at 1 January 2024 2,088,266
Granted during 2024 681,046
Lapsed during 2024 (122,387)
Exercised during 2024 (652,419)
Outstanding at 31 December 2024 and 1 January 2025 1,994,506
Granted during 2025 618,562
Lapsed during 2025 (76,755)
Exercised during 2025 (671,060)
Outstanding at 31 December 2025 1,865,253
Exercisable at 1 January 2024 -
Exercisable at 31 December 2024 and 1 January 2025 -
Exercisable at 31 December 2025 -
The average share price during the year was 1,444.6p (2024: 1,298.7p).
Under IFRS 2, the fair value of services received in return for share awards
granted is measured by reference to the fair value of share options granted.
The estimate of the fair value of share awards granted is measured based on a
stochastic model. The contractual life of the award is used as an input into
this model, with expectations of early exercise being incorporated into the
model.
2025 2024
The inputs into the stochastic model are as follows:
Share price at grant 1,392.0p 1,006.0p
Weighted average exercise price 0.0p 0.0p
Expected volatility 33.6% 31.5%
Expected life 3 years 3 years
Risk-free rate 4.1% 4.2%
Expected dividend yield 0.00% 0.00%
Expected volatility was determined by calculating the historical volatility of
the Group's share price over the previous three years, adjusted for any
expected changes to future volatility due to publicly available information.
The Group recognised total expenses (included in operating costs) of £4.9m
(2024: £4.2.m) related to equity-settled, share-based payment transactions.
The weighted average fair value of options granted in the year was 1,444.6p
(2024: 1,298.7p). Options outstanding at the year-end have a weighted average
remaining contractual life of 1.2 years (2024: 1.2 years).
The awards, which are taken as shares, are intended to be satisfied from
shares held under the Keller Group Employee Benefit Trust (the 'Trust') or
from treasury shares held. The shares held by the Trust are accounted for as a
deduction from equity in retained earnings. At 31 December 2025, 1,163,322
(2024: 1,564,680) ordinary shares were held by the Trust with a value of
£15.5m (2024: £20.5m).
33 Retirement benefit liabilities
The Group operates pension schemes in the UK and overseas.
In the UK, the Group operates the Keller Group Pension Scheme (the 'Scheme'),
a defined benefit scheme, which has been closed to new members since 1999 and
was closed to all future benefit accrual with effect from 31 March 2006. Under
the Scheme, employees are normally entitled to retirement benefits on
attainment of a retirement age of 65. The Scheme is subject to UK pensions
legislation which, inter alia, provides for the regulation of work‑based
pension schemes by The Pensions Regulator. The trustees are aware of and
adhere to the Codes of Practice issued by The Pensions Regulator. The Scheme
trustees currently comprise one member-nominated trustee and two
employer-nominated trustees. An employer-nominated trustee is also the Chair
of the trustees. The Scheme exposes the Group to actuarial risks, such as
longevity risk, interest rate risk and market (investment) risk, which are
managed through the investment strategy to acceptable levels established by
the trustees. The Scheme can invest in a wide range of asset classes including
equities, bonds, cash, property, alternatives (including private equity,
commodities, hedge funds, infrastructure, currency, high yield debt and
derivatives) and annuity policies. Any investment in derivative instruments is
only made to contribute to a reduction in the overall level of risk in the
portfolio or for the purposes of efficient portfolio management. With effect
from the most recent actuarial valuation date (5 April 2023), the Group agreed
to pay a contribution of £1.7m in total, paid in monthly instalments from
January to August 2024. Contributions have now ceased, subject to a review of
the level of employer contributions at the next actuarial review in 2026.
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.
The Group has two UK defined contribution retirement benefit schemes. There
were no contributions outstanding in respect of these schemes at 31 December
2025 (2024: £nil). The total UK defined contribution pension charge for the
year was £1.6m (2024: £1.7m).
The Group has defined benefit retirement obligations in Germany and Austria.
Under these schemes, employees are entitled to retirement benefits on
attainment of a retirement age of 65, provided they have either five or ten
years of employment with the Group, depending on the area or field they are
working in. The amount of benefit payable depends on the grade of the employee
and the number of years of service. Benefits under these schemes only apply to
employees who joined the Group prior to 1997. These defined benefit retirement
obligations are funded on the Group's balance sheet and obligations are met as
and when required by the Group.
The Group has a number of end of service schemes in the Middle East as
required by local laws and regulations. The amount of benefit payable depends
on the current salary of the employee and the number of years of service.
These retirement obligations are funded on the Group's balance sheet and
obligations are met as and when required by the Group.
The Group operates a defined contribution scheme for employees in North
America, where the Group is required to match employee contributions up to a
certain level in accordance with the scheme rules. The total North America
pension charge for the year was £9.4m (2024: £9.0m).
In Australia, there is a defined contribution scheme where the Group is
required to ensure that a prescribed level of superannuation support of an
employee's notional base earnings is made. This prescribed level of support is
currently 12.0% (2024: 11.5%). The total Australian pension charge for the
year was £6.2m (2024: £5.1m).
Details of the Group's defined benefit schemes are as follows:
The Keller German,(1) German,(1)
Group Pension The Keller Austrian Austrian
Group Pension and other and other
Scheme (UK) Scheme (UK) schemes schemes
2025 2024 2025 2024
£m £m £m £m
Present value of the scheme liabilities (36.0) (37.0) (15.4) (15.2)
Fair value of assets 41.6 43.3 - -
Surplus/(deficit) in the scheme 5.6 6.3 (15.4) (15.2)
Irrecoverable surplus (5.6) (6.3) - -
Net defined benefit liability - - (15.4) (15.2)
( )
1 ( ) Included in this balance is £3.7m (2024: £3.7m)
in relation to the end of service schemes in the Middle East.
For the Keller Group Pension Scheme, based on the net deficit of the Scheme as
at 31 December 2025 and the committed payments under the Schedule of
Contributions agreed on 15 December 2023, there is an irrecoverable surplus of
£5.6m (2024: £6.3m). Management is of the view that, based on the Scheme
rules, it does not have an unconditional right to a refund of a surplus under
IFRIC 14. The minimum funding requirement is equal to the IAS 19 surplus as
there are no further employer contributions to be paid under the current
Schedule of Contributions. The contributions will be reviewed following the
next actuarial review to be prepared as at 5 April 2026.
The value of the scheme liabilities has been determined by the actuary using
the following assumptions:
The Keller The Keller German and Austrian German and
Group Pension Scheme (UK) Group Pension Scheme (UK) schemes Austrian
schemes
2025 2024 2025 2024
% % % %
Discount rate 5.5 5.6 3.5 3.3
Interest on assets 5.5 5.6 - -
Rate of increase in pensions in payment 3.5 3.6 2.5 2.5
Rate of increase in pensions in deferment 2.5 2.8 2.9 2.6
Rate of inflation 3.2 3.5 2.9 2.6
The mortality rate assumptions are based on published statistics. The average
remaining life expectancy, in years, of a pensioner retiring at the age of 65
at the balance sheet date is:
The Keller The Keller German and Austrian German and
Group Penson Scheme (UK) Group Pension Scheme (UK) schemes Austrian
schemes
2025 2024 2025 2024
Male currently aged 65 21.3 21.3 22.7 22.5
Female currently aged 65 24.2 24.1 25.6 25.4
The assets of the schemes were as follows:
The Keller The Keller German, German,
Group Pension Group Pension Austrian Austrian
Scheme (UK) Scheme (UK) and other and other
schemes schemes
2025 2024 2025 2024
£m £m £m £m
Equities - 2.2 - -
Target return funds(1) - 14.0 - -
Bonds 1.1 20.4 - -
Liability driven investing (LDI) portfolios(2) 40.2 6.4 - -
Cash 0.3 0.3 - -
41.6 43.3 - -
1 A diversified growth fund split between mainly UK listed
equities, bonds and alternative investments which are capped at 20% of the
total fund.
2 ( ) A portfolio of gilt and swap contracts, backed by
investment-grade credit instruments, that is designed to hedge the majority of
the interest rate and inflation risks associated with the schemes'
obligations. In 2025, multiple funds were consolidated and have since been
managed by a single investment manager.
The Keller The Keller German,(1) German,(1)
Austrian Austrian
Group Pension Scheme (UK) Group Pension Scheme (UK)
and other and other
schemes
schemes
2025 2024 2025 2024
£m £m £m £m
Changes in scheme liabilities
Opening balance (37.0) (41.8) (15.2) (16.2)
Current service cost - - (0.5) (0.7)
Interest cost (2.1) (1.8) (0.4) (0.4)
Benefits paid 3.2 2.3 1.3 1.2
Exchange movements - - (0.3) 0.6
Experience loss on defined benefit obligation (0.2) (0.1) - -
Changes to demographic assumptions - - - -
Changes to financial assumptions 0.1 4.4 (0.3) 0.3
Closing balance (36.0) (37.0) (15.4) (15.2)
Changes in scheme assets
Opening balance 43.3 46.0 - -
Interest on assets 2.3 2.0 - -
Administration costs (0.1) (0.2) - -
Employer contributions - 1.6 - -
Benefits paid (3.2) (2.3) - -
Return on plan assets less interest (0.7) (3.8) - -
Closing balance 41.6 43.3 - -
Actual return on scheme assets 1.6 (1.8) - -
Statement of comprehensive income
Return on plan assets less interest (0.7) (3.8) - -
Experience loss on defined benefit obligation (0.2) (0.1) - -
Changes to financial assumptions 0.1 4.4 (0.3) 0.3
Change in irrecoverable surplus 0.7 (0.6) - -
Remeasurements of defined benefit plans (0.1) (0.1) (0.3) 0.3
Cumulative remeasurements of defined benefit plans (26.0) (25.9) (6.4) (6.1)
Expense recognised in the income statement
Current service cost - - (0.5) (0.7)
Administration costs (0.1) (0.2) - -
Operating costs (0.1) (0.2) (0.5) (0.7)
Net pension interest income 0.2 0.2 - -
Net pension interest cost - - (0.4) (0.4)
Income/(expense) recognised in the income statement 0.1 - (0.9) (1.1)
Movements in the balance sheet liability
Net liability at start of year - 1.5 15.2 16.2
(Income)/expense recognised in the income statement (0.1) - 0.9 1.1
Employer contributions - (1.6) - -
Benefits paid - - (1.3) (1.2)
Exchange movements - - 0.3 (0.6)
Remeasurements of defined benefit plans 0.1 0.1 0.3 (0.3)
Net liability at end of year - - 15.4 15.2
schemes
German,(1)
Austrian
and other
schemes
2025
2024
2025
2024
£m
£m
£m
£m
Changes in scheme liabilities
Opening balance
(37.0)
(41.8)
(15.2)
(16.2)
Current service cost
-
-
(0.5)
(0.7)
Interest cost
(2.1)
(1.8)
(0.4)
(0.4)
Benefits paid
3.2
2.3
1.3
1.2
Exchange movements
-
-
(0.3)
0.6
Experience loss on defined benefit obligation
(0.2)
(0.1)
-
-
Changes to demographic assumptions
-
-
-
-
Changes to financial assumptions
0.1
4.4
(0.3)
0.3
Closing balance
(36.0)
(37.0)
(15.4)
(15.2)
Changes in scheme assets
Opening balance
43.3
46.0
-
-
Interest on assets
2.3
2.0
-
-
Administration costs
(0.1)
(0.2)
-
-
Employer contributions
-
1.6
-
-
Benefits paid
(3.2)
(2.3)
-
-
Return on plan assets less interest
(0.7)
(3.8)
-
-
Closing balance
41.6
43.3
-
-
Actual return on scheme assets
1.6
(1.8)
-
-
Statement of comprehensive income
Return on plan assets less interest
(0.7)
(3.8)
-
-
Experience loss on defined benefit obligation
(0.2)
(0.1)
-
-
Changes to financial assumptions
0.1
4.4
(0.3)
0.3
Change in irrecoverable surplus
0.7
(0.6)
-
-
Remeasurements of defined benefit plans
(0.1)
(0.1)
(0.3)
0.3
Cumulative remeasurements of defined benefit plans
(26.0)
(25.9)
(6.4)
(6.1)
Expense recognised in the income statement
Current service cost
-
-
(0.5)
(0.7)
Administration costs
(0.1)
(0.2)
-
-
Operating costs
(0.1)
(0.2)
(0.5)
(0.7)
Net pension interest income
0.2
0.2
-
-
Net pension interest cost
-
-
(0.4)
(0.4)
Income/(expense) recognised in the income statement
0.1
-
(0.9)
(1.1)
Movements in the balance sheet liability
Net liability at start of year
-
1.5
15.2
16.2
(Income)/expense recognised in the income statement
(0.1)
-
0.9
1.1
Employer contributions
-
(1.6)
-
-
Benefits paid
-
-
(1.3)
(1.2)
Exchange movements
-
-
0.3
(0.6)
Remeasurements of defined benefit plans
0.1
0.1
0.3
(0.3)
Net liability at end of year
-
-
15.4
15.2
( )
1 ( ) Other comprises end of service schemes in the
Middle East of £3.7m (2024: £3.7m).
A reduction in the discount rate of 0.5% would increase the deficit in the
schemes by £2.0m (2024: £2.0m), whilst a reduction in the inflation
assumption of 0.5%, including its impact on the revaluation in deferment and
pension increases in payment, would decrease the deficit by £1.0m (2024:
£1.1m). A decrease in the mortality rate by one year would decrease the
deficit in the schemes by £1.7m. Note that these sensitivities do not include
end of service schemes in the Middle East as these are not material to the
Group.
The weighted average duration of the defined benefit obligation is
approximately 13 years for the UK scheme and nine years for the German and
Austrian schemes. The history of experience adjustments on scheme assets and
liabilities for all the Group's defined benefit pension schemes, including the
end of service schemes in the Middle East, are as follows:
2025 2024 2023 2022 2021
£m £m £m £m £m
Present value of defined benefit obligation (51.4) (52.4) (58.0) (55.7) (77.2)
Fair value of scheme assets 41.6 43.5 46.0 42.2 63.7
Deficit in the schemes (9.8) (8.9) (12.0) (13.5) (13.5)
Irrecoverable surplus (5.6) (6.3) (5.7) (7.3) (12.2)
Net defined benefit liability (15.4) (15.2) (17.7) (20.8) (25.7)
Experience adjustments on scheme liabilities 0.4 4.3 (3.1) 21.1 6.6
Experience adjustments on scheme assets (0.7) (3.8) 1.3 (23.2) 4.6
34 Non-controlling interests
Financial information of subsidiaries that have a material non-controlling
interest is provided below:
Name Country of incorporation 2025 2024
Keller Fondations Speciales SPA Algeria 49% 49%
Profit attributable to non-controlling interests:
2025 2024
£m £m
Keller Fondations Speciales SPA 0.3 0.3
Other interests 0.1 0.1
0.4 0.4
Share of net assets of non-controlling interests:
2025 2024
£m £m
Keller Fondations Speciales SPA 2.4 2.7
Other interests 0.4 0.3
2.8 3.0
Aggregate amounts relating to material non-controlling interests:
2025 2024
£m £m
Keller Keller
Fondations Fondations
Speciales SPA Speciales SPA
Revenue 3.2 1.5
Operating costs (2.6) (1.1)
Operating profit 0.6 0.4
Finance costs - -
Profit before taxation 0.6 0.4
Taxation (0.3) (0.1)
Profit attributable to non-controlling interests 0.3 0.3
2025 2024
£m £m
Keller Keller
Fondations Fondations
Speciales SPA Speciales SPA
Non-current assets 0.6 0.5
Current assets 3.4 2.9
Current liabilities (1.6) (0.7)
Non-current liabilities - -
Share of net assets 2.4 2.7
On 29 August 2023, the Group acquired the 35% interest in the voting shares of
Keller Company Limited (formerly Keller Turki Company Limited), increasing its
ownership interest to 100%. An initial cash consideration of £6.4m (SAR 30m)
was paid to the non-controlling shareholders. In addition, a contingent
consideration has been agreed as part of the purchase agreement and is payable
annually between the years 2023 and 2027, dependent on the qualifying revenue
generated by the business for each of those years.
As at 31 December 2025, the fair value of the contingent consideration was
£1.1m (SAR 5.6m). Refer to note 26 for further information.
35 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 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
relating to acquisitions.
As a result, adjusted performance measures have been used throughout the
Annual Report and Accounts to describe the Group's underlying performance. The
Board and Executive Committee use these adjusted measures to assess the
performance of the business because they consider them more representative of
the underlying ongoing trading result and allow more meaningful comparison to
prior year.
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
consolidated 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 consolidated income statement, with
non-underlying items detailed in note 9 to the consolidated financial
statements. A reconciliation between the 2024 underlying result and the 2024
constant currency result is shown below and compared to the underlying 2025
performance:
Revenue by segment
2025 2024
Statutory Statutory Impact of exchange movements Constant Statutory Constant currency
currency change change
£m £m £m £m % %
North America 1,815.7 1,785.8 (57.2) 1,728.6 +1.7 +5.0
Europe and Middle East 873.4 835.1 4.0 839.1 +4.6 +4.1
Asia-Pacific 398.2 365.8 (18.2) 347.6 +8.9 +14.6
Group 3,087.3 2,986.7 (71.4) 2,915.3 +3.4 +5.9
Underlying operating profit by segment
2025 2024
Underlying Underlying Impact of exchange Constant Underlying Constant currency
movements currency change change
£m £m £m £m % %
North America 166.2 190.0 (6.1) 183.9 -12.5 -9.6
Europe and Middle East 38.8 7.9 0.2 8.1 +391.1 +379.0
Asia-Pacific 30.6 28.7 (2.0) 26.7 +6.6 +14.6
Central items (17.4) (14.0) 0.1 (13.9) +24.3 +25.2
Group 218.2 212.6 (7.8) 204.8 +2.6 +6.5
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 consolidated income
statement, consolidated balance sheet or consolidated cash flow statement, the
adjusted measures are reconciled to the IFRS statutory numbers below:
EBITDA (statutory)
2025
2024
£m £m
Underlying operating profit 218.2 212.6
Depreciation and impairment of owned property, plant and equipment 77.3 78.8
Depreciation and impairment of right-of-use assets 31.7 29.9
Amortisation of intangible assets 0.1 0.1
Underlying EBITDA 327.3 321.4
Non-underlying items in operating costs (excluding goodwill impairment) (10.8) (10.6)
Non-underlying items in other operating income 1.5 6.4
EBITDA 318.0 317.2
EBITDA (IAS 17 covenant basis)
2025
2024
£m £m
Underlying operating profit 218.2 212.6
Depreciation and impairment of owned property, plant and equipment 77.3 78.8
Depreciation and impairment of right-of-use assets 31.7 29.9
Legacy IAS 17 operating lease charges (37.6) (34.3)
Amortisation of intangible assets 0.1 0.1
Underlying EBITDA 289.7 287.1
Non-underlying items in operating costs (excluding goodwill impairment) (10.8) (10.6)
Non-underlying items in other operating income 1.5 6.4
EBITDA 280.4 282.9
Net finance costs
2025 2024
£m £m
Finance income (4.5) (6.6)
Underlying finance costs 25.4 27.8
Net finance costs (statutory) 20.9 21.2
Exclude: Finance charge on lease liabilities(1) (6.4) (6.2)
Lender covenant adjustments (1.0) (0.8)
Net finance costs (IAS 17 covenant basis) 13.5 14.2
1 Excluding legacy IAS 17 finance leases.
Net capital expenditure
2025 2024
£m £m
Acquisition of property, plant and equipment 90.3 89.0
Acquisition of other intangible assets 0.1 -
Proceeds from sale of property, plant and equipment (12.9) (29.0)
Net capital expenditure 77.5 60.0
Net debt
2025 2024
£m £m
Current loans and borrowings 29.2 27.5
Non-current loans and borrowings 281.2 307.1
Cash and cash equivalents (281.5) (207.7)
Net debt (statutory) 28.9 126.9
Lease liabilities(1) (88.6) (97.4)
Net (cash)/debt (IAS 17 covenant basis) (59.7) 29.5
1 Excluding legacy IAS 17 finance leases.
Leverage ratio
The leverage ratio is calculated as net debt to underlying EBITDA.
Statutory
2025
£m 2024
£m
Net debt 28.9 126.9
Underlying EBITDA 327.3 321.4
Leverage ratio (x) 0.1 0.4
IAS 17 covenant basis
2025
£m 2024
£m
Net (cash)/debt (59.7) 29.5
Underlying EBITDA 289.7 287.1
Leverage ratio (x) (0.2) 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
consolidated 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.
Free cash flow
The calculation of free cash flow is set out in the Chief Financial Officer's
review and is reconciled to movements in the consolidated cash flow statement
and other movements in net debt as set out below.
2025
2024
£m £m
Net cash inflow from operating activities 258.4 265.9
Net cash outflow from investing activities (71.2) (57.7)
Exclude: - (1.4)
Cash inflows from non-underlying items - historic claims
Cash outflows from non-underlying items - ERP costs 9.7 4.9
Cash outflows from non-underlying items - restructuring costs 0.9 4.9
Acquisition of subsidiaries, net of cash acquired 0.6 0.9
Disposal of subsidiaries (0.2) 2.6
Include: (21.4) (26.4)
Increase in net debt from new leases
Increase in net debt from amortisation of deferred finance costs (0.9) (1.1)
Free cash flow 175.9 192.6
Operating cash flow conversion
The calculation of operating cash flow conversion is set out in the Chief
Financial Officer's review and is reconciled to movements in the consolidated
cash flow statement and other movements in net debt as set out below.
2025
2024
£m £m
Free cash flow (as defined above) 175.9 192.6
Exclude: (4.0) (5.8)
Interest received
Interest paid 17.6 20.4
Interest element of lease rental payments 6.4 6.2
Increase in net debt from amortisation of deferred finance costs 0.9 1.1
Income tax paid 38.5 65.6
Free cash flow before interest and tax 235.3 280.1
Operating profit before non-underlying items 218.2 212.6
Free cash flow before interest and tax as a percentage of operating profit 108% 132%
before non-underlying items
Financial record
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
£m £m £m £m £m £m £m £m £m £m
Consolidated income statement
Continuing operations
Revenue 1,780.0 2,070.6 2,224.5 2,300.5 2,062.5 2,222.5 2,944.6 2,966.0 2,986.7 3,087.3
Underlying EBITDA 158.6 177.2 167.5 198.4 205.0 185.9 205.6 293.1 321.4 327.3
Underlying operating profit 95.3 108.7 96.6 103.8 110.1 88.5 108.6 180.9 212.6 218.2
Underlying net finance costs (10.2) (10.0) (16.1) (22.5) (13.2) (8.9) (15.1) (27.5) (21.2) (20.9)
Underlying profit before taxation 85.1 98.7 80.5 81.3 96.9 79.6 93.5 153.4 191.4 197.3
Underlying taxation (29.8) (24.7) (22.5) (22.4) (28.3) (18.9) (20.3) (38.8) (43.9) (45.2)
Underlying profit for the year 55.3 74.0 58.0 58.9 68.6 60.7 73.2 114.6 147.5 152.1
Non-underlying items(1) (7.3) 13.5 (71.8) (37.2) (27.5) (5.1) (28.2) (24.8) (4.8) (9.0)
Profit/(loss) for the year 48.0 87.5 (13.8) 21.7 41.1 55.6 45.0 89.8 142.7 143.1
Underlying EBITDA (IAS 17 covenant basis) 158.6 177.2 167.5 170.8 175.0 153.2 177.7 259.3 287.1 289.7
Consolidated balance sheet
Working capital 152.5 181.3 225.4 200.9 180.3 149.6 303.4 261.5 232.0 193.6
Property, plant and equipment 405.6 399.2 422.0 460.6 434.9 443.4 486.5 480.2 461.4 456.9
Intangible and other non-current assets 218.2 198.3 179.5 192.3 183.5 232.0 203.1 185.9 204.3 214.3
Net debt (statutory) (305.6) (229.5) (286.2) (289.8) (192.5) (193.3) (298.9) (237.3) (126.9) (28.9)
Other net assets/liabilities (41.1) (77.1) (114.2) (166.5) (196.2) (203.7) (197.3) (172.3) (174.1) (191.7)
Net assets 429.6 472.2 426.5 397.5 410.0 428.0 496.8 518.0 596.7 644.2
Net (debt)/cash (IAS 17 covenant basis) (305.6) (229.5) (286.2) (213.1) (120.9) (119.4) (218.8) (146.2) (29.5) 59.7
Underlying key performance indicators
Diluted earnings per share from continuing operations (p) 74.8 101.8 79.1 81.3 96.3 84.2 100.7 153.9 199.9 211.3
Dividend per share (p) 28.5 34.2 35.9 35.9 35.9 35.9 37.7 45.2 49.7 70.4
Operating margin 5.4% 5.2% 4.3% 4.5% 5.3% 4.0% 3.7% 6.1% 7.1% 7.1%
Return on capital employed(2) 15.3% 15.1% 13.2% 14.4% 16.4% 13.9% 14.9% 22.8% 28.2% 30.7%
Net debt: EBITDA (statutory) 1.9x 1.3x 1.7x 1.5x 0.9x 1.0x 1.5x 0.8x 0.4x 0.1x
Net debt/(cash): EBITDA (IAS 17 covenant basis) 1.9x 1.3x 1.7x 1.2x 0.7x 0.8x 1.2x 0.6x 0.1x (0.2)x
1 Non-underlying items are items which are exceptional by their
size and/or are non-trading in nature and are disclosed separately in the
financial statements where it is necessary to do so to provide further
understanding of the financial position of the Group.
2 Calculated as underlying operating profit expressed as a
percentage of average capital employed. 'Capital employed' is net assets
before non-controlling interests plus net debt and net defined benefit
retirement liabilities.
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