Interim Management Statement
For immediate release Tuesday, 19 May 2009
Keller Group plc
Interim Management Statement
AGM Statement
Ahead of its Annual General Meeting to be held at 10.00 a.m. today, Keller
Group plc ("Keller" or "the Group"), the international ground engineering
specialist, issues its Interim Management Statement covering the period 1
January to 18 May 2009.
Overview
The global recession continues to affect almost all of our markets and private
funding for construction projects remains scarce. Whilst we have experienced a
shift towards more publicly-financed projects, we have not as yet felt any
noticeable impact from promised fiscal stimulus measures and we do not
anticipate that these will benefit the Group before 2010.
As reported in March, order intake in the autumn of last year quickly fell by
around 20% in constant currency terms; since when, orders have stabilised.
Therefore, as anticipated, revenue and operating profit in the year to date are
materially down on a constant currency basis compared with the same period last
year, although the impact has been somewhat mitigated by the relative weakness
of sterling. Accordingly, we have already taken steps to re-size the business
in a number of geographies and we will continue to take actions where
necessary, as well as maintaining our focus on cash management.
Given the Group's performance to date and the order book at the end of April,
the expected results for the full year remain within the current range of
market expectations.
Divisional Review
US
With the slowdown in commercial and office building, our US foundation
contracting businesses have relied more heavily on public infrastructure and
power-related projects, where spending has remained robust. As we anticipated,
tighter pricing, in response to increased competition, has weakened margins.
Suncoast, with its significant residential exposure, has continued to respond
to the slump in that sector with additional cost reduction measures, including
a further cut of around 10% in its workforce in the last quarter.
Continental Europe, Middle East & Asia (CEMEA)
Across our diverse markets within the CEMEA division, performance remains
somewhat mixed. The Middle East has been particularly impacted by a continued
extension of lead times for the award of large contracts, although our profit
from the region in the year to date has been good. In Eastern Europe, where our
order book remains well above the level at this time last year, the slowdown in
investment has delayed certain projects and the region is seeing a significant
inflow of competition from neighbouring markets. Elsewhere in Europe, trading
has held up fairly well, despite sluggish demand and the adverse impact of
severe weather conditions in the first quarter.
Australia and UK
Overall, our Australian business has performed well in the year to date, with
good results and orders from several large infrastructure projects mitigating
the impact of weakness in the commercial building sector.
In the UK, further downsizing has been necessary, as UK housing remains in the
doldrums and opportunities in the commercial sector are significantly reduced.
Financial Position
The Group's financial position remains strong. Other than the normal seasonal
increase in working capital, there has been no significant change to our
financial position since the last year end.
Board Change
As announced separately today, Dr Michael West, who has chaired the Group since
1995, will retire as Chairman at the end of July. He is to be succeeded by Mr
Roy Franklin OBE, who joined the Board as a Non-executive Director in 2007.
Notice of Interim Results
Keller intends to announce its interim results on Friday, 31 July 2009.
For further information, please contact:
Keller Group plc www.keller.co.uk
Justin Atkinson, Chief Executive 020 7616 7575
James Hind, Finance Director
Smithfield 020 7390 4600
Reg Hoare/Will Henderson
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