Keller Group plc 12 April 2013 Keller Group plc ("the Company") - Annual Financial Report In accordance with the Listing Rules, copies of the following documents have been submitted to the National Storage Mechanism: * Annual Report and Accounts for the year ended 31 December 2012 (the 'Annual Report 2012') * The notice of annual general meeting 2013 * Form of proxy for the annual general meeting These documents will shortly be available for inspection at the National Storage Mechanism at www.hemscott.com/nsm.do. The Annual Report 2012 is also available on the Company's website at www.keller.co.uk. Hard copies of all the documents have been sent to shareholders. The annual general meeting will be held at 11.00am on Thursday 23 May 2013 at the offices of Investec, 2 Gresham Street, London, EC2V 7QP. In accordance with DTR 6.3.5, this announcement contains information in the attached Appendix of the principal risk factors, the directors' responsibility statement and a note to the accounts on related party transactions. This information has been extracted in full unedited text from the Annual Report 2012. References to page numbers and notes in the Appendix refer to those in the Annual Report 2012. A condensed set of financial statements was appended to Keller Group plc's preliminary results announcement issued on 4 March 2013. For further information please contact: Jackie Holman Company Secretary Appendix Unedited extract from Annual Report 2012 Principal risks Risk Description KPIs Controls Market cycles Whilst our business will Revenue growth • Strategy of always be subject to geographic The Group's broad economic cycles, market compared with diversification: base helps to risk is reduced by the mitigate against diversity of our markets, market growth - operations in the risk of both in terms of geography over 30 countries downturn in and market segment. It is Definition and also partially offset by - growing presence our markets opportunities for method of in Australia and consolidation in our highly calculation developing markets. fragmented markets. Year-on-year • Broad customer Typically, even where we sales base. are the clear leader, we still have a relatively growth in • Services used small share of the market. local currency across all industry Our ability to exploit segments: these opportunities through compared with infrastructure, bolt-on acquisitions is growth in industrial, reflected in our track commercial, record of growing sales, the total residential and and doing so profitably, regional environmental. across market cycles. construction market. As our work occurs at the start of the construction cycle, our revenue is a leading indicator for the construction market, whereas market comparators are based on the lagging indicator 'construction put in place'. Tendering and It is in the nature of our Operating • Risk Management business that we margin Framework defines management continually assess and Minimum Standards manage technical, and other in the control of of projects operational, risks. project risk. Definition and Project risk is Some of the controls we method of • Risk-based managed have in place, particularly tender at the crucial stage of Calculation. approval throughout the tendering of contracts, are Operating process, with life of a set out in the table clear opposite. Given the Group's profit delegations of project from the relatively small average expressed as a authority. tendering contract value (less than £ 200,000), it would be percentage of • Independent stage to unusual for any one revenue. review of tenders. completion contract to • Training for materially affect the staff in the results of the Group. In typical risk issues fact, our largest contract they may face when in 2012 accounted for less tendering for jobs, than 3% of total revenue. negotiating Our ability to manage contracts and technical risks will executing work. generally be reflected • Legal review of in our profitability. unusual or onerous contract terms. • Project staff selected on the basis of their skills, experience of a particular type of project and their workload. • Establishment of 'centres of excellence'. • Formal handover meetings at each step of the contract in progress. • Weekly cost reports produced for all projects and reviewed by next level management. • Periodic reviews of poorly performing contracts to establish lessons learned with the results communicated to all relevant staff. Acquisitions We recognise the risks Return on net • Target companies associated with operating are usually well Our long-term acquisitions and our known to Keller; growth approach to buying Assets and the operational businesses aims to manage and cultural track record is these to acceptable levels. differences and built on a potential synergies combination of First, we try to get to Definition and are well organic growth know a target company, method of understood. and acquisitions often working in joint venture, to understand the calculation • Robust due operational and cultural diligence process, differences and potential Operating mostly undertaken profit before by own management. synergies. This is followed by a robust due diligence impairment of • Clear process, most of which is intangibles integration plan, undertaken by our own reflecting the managers, and we then expressed as a unique character of develop a clear integration percentage the target company. plan which takes account of of average net the unique character of the operating target company. assets (including goodwill acquired through acquisitions). Net operating assets excludes net debt, tax balances, deferred consideration and net defined benefit pension liabilities. Safety Keller is made up of Accident • Keller Safety businesses Frequency Framework 'Think The construction Safe', industry in which of varying sizes operating Rate ('AFR') incorporating our we operate poses around the world, often in Safety Goal, significant challenging environments. Principles, Policy safety and Minimum challenges, but It is essential that, as we Definition and Standards. we do not accept continue to grow and move method of the inevitability into new regions, we can be • All business of injury sure that our approach to calculation units undertake an safety is equally rigorous, annual safety no matter Accident assessment. frequency per whereabouts in the world, • From these, or on which projects, we 100,000 man safety improvement are working. hours. plans are developed and implemented. • Regular directors' and managers' safety tours reinforce the importance of safety. People The risk of losing, or not Staff turnover • Excellent being able to attract, good rate training and The accumulation people is key. We pride development of ourselves in having some of opportunities. the best professional and knowledge and skilled people Definition and • Opportunities experience is method of for career growth. essential to in the industry, who are helping our motivated by our culture calculation • Good engagement customers to find and the opportunities for and two-way the best career growth. The number of communications. solutions managerial, • Employees professional treated with dignity and and technical respect. staff leaving in the period, other than through redundancy or normal retirement, expressed as a percentage of employees in this category. Responsibility statement of the Directors in respect of the annual report and the financial statements We confirm that to the best of our knowledge: * the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole; and * the Directors' report, including content contained by reference, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. 24 Related party transactions Transactions between the parent, jointly controlled operations and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. During the year the Group undertook various contracts with a total value of £ 3.9m (2011: £2.3m) for GTCEISU Construcción, S.A., a connected person of Mr López Jiménez, who retired as a Director of the Company during the year. An amount of £5.6m (2011: £1.8m) is included in trade and other receivables in respect of amounts outstanding as at 31 December 2012. During the year the Group made purchases from GTCEISU Construcción, S.A. with a total value of £2.0m (2011: £3.5m). An amount of £1.0m (2011: £1.0m) is included in trade and other payables in respect of amounts outstanding as at 31 December 2012. Related party transactions were made on an arms-length basis. All amounts outstanding from related parties are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties. The remuneration of the Directors, who are the key management personnel and related parties of the Group is set out below in aggregate for each of the relevant categories specified in IAS 24 Related Party Disclosures. Key management personnel compensation comprised: 2012 2011 £m £m Short-term employee benefits 3.4 2.1 Post-employment benefits 0.3 0.2 3.7 2.3 END END -0- Apr/12/2013 07:00 GMT
KELLER GROUP PLC: Annual Financial Report
Press spacebar to pause and continue. Press esc to stop.