Keller Group PLC KLR Interim Management Statement

  Keller Group PLC (KLR) - Interim Management Statement

RNS Number : 1648R
Keller Group PLC
15 November 2012

For        immediate        release         
 Thursday, 15 November 2012

                               Keller Group plc

                         Interim Management Statement

Keller  Group  plc  ("Keller"  or  "the  Group"),  the  international   ground 
engineering specialist, issues this Interim Management Statement covering  the 
period from 1 July to 14 November 2012.


The Group has performed  strongly in the  four months to  the end of  October, 
with results exceeding the Board's expectations  and ahead of the same  period 
last year. Accordingly, our second-half results are expected to build on  the 
improvements we reported in the first half of 2012.

This further progress is being driven primarily by our North American business
where we are  taking advantage of  a gradual improvement  in the  construction 
market. In Asia, the Group is also trading well and elsewhere in the  world, 
where market  conditions  are more  challenging,  our businesses  are  proving 
resilient: in EMEA, actions taken in the first half of the year will result in
a much improved second half, whilst Australia is trading ahead of last  year. 
All divisions  have  seen  further  benefits  from  the  business  improvement 
initiatives  announced   in   February,   particularly   those   focusing   on 
strengthening risk  management  and  increasing  our  participation  in  large 

For the Group as a whole, project awards since the half year have remained  at 
a healthy level and the order book at the end of October was around 10%  above 
last year.

The Group's 2012 full-year  revenue is expected to  be around £1.3bn, in  line 
with market expectations. However, the  Board now expects the 2012  full-year 
profit before  tax to  be  significantly above  the  current range  of  market 

Divisional Review

North America

The US construction market as a  whole continues to show solid growth,  albeit 
not at  the  levels  experienced  in  the first  few  months  of  2012,  which 
benefitted from  very  benign weather.  In  the nine  months  to the  end  of 
September, residential construction  was up 12%  year-on-year and new  housing 
starts were up around 25%. Non-residential  construction was up by 7% in  the 
same period. This growth was  driven entirely by private expenditure;  public 
expenditure  on  construction  was  down  3%  year-on-year.  Within   private 
construction spend, the power segment has remained particularly strong and our
focus on transmission line work means that  we have been able to increase  our 
exposure to this segment.

Against this backdrop, our North American business has been busy, with revenue
growth for  the  financial year  expected  to  outperform the  growth  in  the 
construction market as a whole for 2012. The first-half recovery in Suncoast
is continuing through the second  half, with profitability steadily  improving 
as volumes increase.  Within our foundation  contracting businesses,  despite 
continuing overcapacity  in  many regions  and  market segments,  margins  are 
improving as the Group  benefits from the refocusing  of our business and  our 
emphasis on higher-margin  segments. The 2012  results have also  benefitted 
from a good performance on several large projects.

Whilst we  experienced some  short-term disruption  to our  businesses in  the 
North East of the US as a result  of Hurricane Sandy, this is not expected  to 
have a material impact on financial performance.

Europe, Middle East & Africa (EMEA)

In Europe, market conditions remain very challenging in most markets.  Within 
the Middle East,  Saudi Arabia has  remained steady and  we are seeing  recent 
signs of increased activity in other parts of the region.

Across our EMEA division, we have  cut costs and restructured businesses to  a 
size and structure commensurate with their depressed markets. These measures,
together with good progress on our major infrastructure projects in the UK and
Poland, mean that the second-half result  for the division will, as  expected, 
be much improved on the first half.


Overall, our Asian  markets have  remained strong,  helped by  high levels  of 
public spending  on construction  in Singapore  and Malaysia.  We have  made 
excellent progress on our major project for Vale in Malaysia, which we are  on 
track to complete in the first half of 2013. In India, a slowdown in the rate
of  economic  growth,  combined  with   high  interest  rates  and   political 
uncertainty, has pushed back several large infrastructure projects and led  to 
lower volumes. For the region as a  whole, the full year result should be  in 
line with expectations.


The market conditions in Australia continue to reflect the two-speed  economy, 
with the resources sector  remaining strong, while infrastructure,  commercial 
and residential remain  depressed. Within the  resources sector, the  recent 
fall in iron ore prices has fed speculation as to whether forthcoming projects
will  go  ahead  as  planned,  although  our  existing  LNG  projects   remain 

Our Australian business has made good progress on a number of large  projects, 
including the Australia Pacific LNG Marine Off-loading Facility at  Gladstone, 
where we are on target to complete  our work ahead of schedule. In  addition, 
we recently successfully  completed our  test piling programme  for the  major 
Wheatstone on-shore piling project.

Financial Position

There has been no material change in the financial position of the Group since
the interim results announcement on 30 July 2012.


For the Group  as a  whole, the  full-year revenue  is expected  to be  around 
£1.3bn, in line with market expectations. However, the Board now expects  the 
2012 full-year profit before tax to  be significantly above the current  range 
of market expectations.

Looking further ahead, at a macroeconomic level the outlook remains  extremely 
uncertain. Europe  continues  to face  a  number of  economic  and  political 
challenges, whilst the rate of growth in much of Asia appears to be  slowing. 
In the US, where  the construction market  and economy as a  whole are in  the 
early stages of recovery, this recovery  is threatened by the "fiscal  cliff". 

Despite this  backdrop, the  Board believes  that corporate  actions taken  in 
recent years mean that the Group is  better placed than ever to face  whatever 
economic headwinds may materialise. Longer term, we remain confident that our
strategy and our strengths will underpin sustained future growth.

Keller will  issue a  pre-close statement  in respect  of the  year ending  31 
December 2012 on 18 December 2012.

For further information, please contact:

    Keller Group plc   
Justin Atkinson, Chief Executive    020 7616 7575
James Hind, Finance Director
James Leviton, Rowley Hudson       020 7251 3801

This document contains forward-looking statements which have been made in good
faith based on the information available at the time of its approval. It  is 
believed that the expectations reflected  in these statements are  reasonable, 
but they may  be affected  by a  number of  risks and  uncertainties that  are 
inherent in any forward-looking statement which could cause actual results  to 
differ materially from those currently anticipated.

Note to Editors

Keller is  the  world's  largest independent  ground  engineering  specialist, 
providing technically advanced and cost-effective foundation solutions to  the 
construction industry.  With  annual  revenue of  around  £1.3bn,  Keller  has 
approximately 7,000 staff world-wide.

Keller is the market leader in the US and Australia; it has prime positions in
most established European  markets; and  a strong profile  in many  developing 

                     This information is provided by RNS
           The company news service from the London Stock Exchange


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