Trading Statement & AGM Notice
For immediate release 23 April 2020
Keller Group plc
First Quarter Trading Update, Sale of Brazil operations, Annual General Meeting 2020 arrangements and Dividend Declaration
Keller Group plc ("Keller" or "the group"), the world's largest geotechnical specialist contractor, today provides an update on trading in the first quarter, announces the sale of its Brazil operations and announces an update to the arrangements for its forthcoming Annual General Meeting ("AGM").
First Quarter Trading Update
As announced on 25 March 2020, trading for January and February was marginally above our expectations, but as anticipated, we saw a swift deterioration in activity during the second half of March due to national and regional restrictions on travel and work. Notwithstanding this, the March result was less impacted than expected and the performance for the quarter as a whole was better than our expectations, and materially better than the prior year.
The COVID-19 situation continues to evolve and, whilst the position across our geographic markets remains broadly as described in our announcement on 25 March 2020, the short term trading outlook remains uncertain. Accordingly, we have put in place a broad range of measures to reduce costs and manage our liquidity through this period. Measures include operating cost reductions, cancellation of discretionary projects, reduced capital expenditure, and an even greater focus on working capital management. We continue to seek to maximise the group's resilience and to minimise the potential financial and other risks arising from the current crisis. We are availing ourselves of relevant Governmental support schemes across all of our markets, such as furlough and tax deferrals, where appropriate. Additionally, the Board and senior management have taken a voluntary 20% reduction in fees and salary during the second quarter.
Trading in April remains mixed, with APAC and EMEA currently impacted more than North America, which varies significantly by state. Once current national and regional restrictions on travel and work are lifted, we would expect to return to work on the majority of those contracts currently being affected and our order book in the near term remains largely unaffected.
In terms of financing and liquidity, as reported at our full year results on 3 March 2020, at 31 December 2019, our net debt was £213m, on a bank covenant IAS 17 basis, equating to a net debt to EBITDA ratio of 1.2x compared to our covenant limit of 3.0x. The group has substantial borrowing facilities available to it. As at the end of March 2020, the group had undrawn committed and uncommitted borrowing facilities totalling £238m, comprising £167m of the unutilised portion of the group's £375m revolving credit facility (which expires in November 2024 and has an option to extend by one further year), £29m of other undrawn committed borrowing facilities and undrawn uncommitted borrowing facilities of £42m - as well as cash and cash equivalents of £87m. At the end of March 2020, our net debt was £251m, on a bank covenant IAS 17 basis, equating to a net debt to EBITDA ratio of 1.3x. Our liquidity position remains under constant review.
It remains too early to provide earnings guidance in relation to the remainder of the current financial year. We will continue to monitor external events, manage the situation closely and update the market as appropriate.
Sale of Brazil operations
Further to our recent announcement that we would make a phased withdrawal from South America, the group announces today the sale of its Brazilian entity, Tecnogeo, and its successful exit from the Brazilian market. The sale is for a total cash consideration of BRL15m (£2.3m), with unconditional payments totalling BRL10m (£1.5m) in 2020 and a final payment of BRL5m (£0.8m) deferred until 2021. The sale will result in a small non-underlying loss on disposal for the group.
Annual General Meeting 2020 Arrangements
The Keller AGM was due to be held at 11am on Thursday 21 May 2020 at the offices of DLA Piper UK LLP, 160 Aldersgate Street, London EC1A 4HT. In response to the Government's limitations on gatherings of people, the Board is postponing this event to 9am on 30 June 2020 at the same location.
Whilst the group hopes that this postponement will allow Keller to hold a customary AGM, as the COVID-19 circumstances are fluid, changes to the usual arrangements, including location, may be made. Shareholders are therefore strongly encouraged to exercise their vote on the matters of business at the AGM by submitting a proxy appointment and giving voting instructions:
· CREST members may use the CREST electronic proxy appointment service as detailed in the Notice of Meeting. We strongly recommend that you submit your proxy appointment and voting instructions electronically.
· A hard copy proxy form is available upon request from Equiniti at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. Full details of how to complete the proxy form and return it are contained in the Notice of Meeting.
· The latest time for proxies to be lodged is 9am on 26 June 2020.
· You are strongly advised to appoint the chairman of the meeting as your proxy to ensure your vote is counted. Other named proxies may not be allowed to attend the AGM.
· Proxies already cast remain valid.
Questions from shareholders can be sent by email to secretariat@keller.com, or by post to the group's head office at 5th Floor, 1 Sheldon Square, London W2 6TT for the attention of the Company Secretary. Answers will not be provided at the AGM, but as soon as possible thereafter. For all other queries regarding the Annual General Meeting please contact the Company Secretary.
Dividend Declaration
Whilst Keller benefits from a strong financial position, in light of the market uncertainty arising from COVID-19, the Board will keep the appropriateness of paying the final dividend under review until the rescheduled AGM, with a final decision dependant on the prevailing circumstances at the time. As the group's proposed final dividend for 2019 of 27.4 pence per share, which was due to be paid on 26 June 2020, requires approval at the AGM, the postponement of the AGM means the approval of this final dividend to shareholders will also be postponed accordingly. Consequently, the group confirms the following revised dividend timetable: ex-dividend date - 30 July 2020; record date - 31 July 2020; and dividend payment date - 21 August 2020.
For further information, please contact:
Keller Group plc 020 7616 7575
Michael Speakman, Chief Executive Officer
Mark Hooper, Interim Chief Financial Officer
Victoria Huxster, Co-Head of Investor Relations
Caroline Crampton, Co-Head of Investor Relations
Finsbury 020 7251 3801
Gordon Simpson
James Kavanagh
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 six continents, Keller tackles an unrivalled 7,000 projects every year, generating annual revenue of more than £2bn.
For more information, please go to:
http://www.keller.com/investors.aspx and http://www.keller.com .
LEI: 549300QO4MBL43UHSN10
Classification: 2.2 Inside information (DTR Annex 1)
This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations. On the publication of this announcement via a Regulatory Information Service ("RIS"), this information is considered to be in the public domain.
The person responsible for making this announcement is Kerry Porritt, Group Company Secretary and Legal Advisor
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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