North American business sees ground engineer turn in sparkling set of results
Keller has upgraded its full-year profit forecast after the firm said booming workloads in North America meant the ground engineer is performing well ahead of expectations.
Analysts had been expecting underlying operating profit to be between 拢176m and 拢179m this year but this has now been revised upwards to between 拢205m and 拢207m on the back of its interim figures.
Its biggest business is North America, where two-thirds of its turnover is carried out and where underlying operating profit increased 68% to 拢106m on revenue up 4% to 拢884m in the six months to June.
Chief executive Michael Speakman said he didn鈥檛 expect this November鈥檚 US election to affect workloads and played down the impact of recent worries the US economy is heading for a slowdown. 鈥淲e don鈥檛 think it will affect us too much in 2024, there may be some headwinds in 20205 鈥� we鈥檒l wait and see.鈥�
The firm鈥檚 Europe and Middle East business saw income grow 6% to 拢419m but underlying operating profit fell 74% to 拢3m.
Keller said it had been impacted by problems on the Trojema mountain resort project on the Neom scheme in Saudi Arabia.
It added: 鈥淭he project has encountered ground condition difficulties resulting in a loss reported in the period. We are in discussions with the client to remedy the contractual position.鈥�
Meanwhile, Speakman said he hoped the new chancellor would loosen the purse strings and finish off the HS2 station at Euston in London.
He has previously said it would be 鈥渂onkers鈥� not to run the railway into Euston and this morning added: 鈥淚f I was in Rachel Reeves鈥� shoes, yes you have books to balance but I would expect her to complete the London end of the line.鈥�
Keller鈥檚 UK business accounts for around 3% of its global turnover with a large part of that figure in recent years being its work on the HS2 line in the Chilterns and further north.
The firm also revealed that long-standing employee, Brent Byford, had been promoted to a new post of chief construction officer. Based in Chicago, the American鈥檚 role will involve making sure processes and standards are aligned across a business that employs 10,000 people.
Revenue in the first half was flat at 拢1.5bn but pre-tax profit was up 121% to 拢95m. Underlying operating profit was up 69% to 拢113m. The firm said its order book stood at a record 拢1.6bn.
In a note, broker Investec said it was raising profit forecasts to 拢207m this year and 拢209m next. 鈥淔ull year profit expectations are materially higher and look well supported by a strong order book,鈥� it added.
Keller turned in a record set of results last year with revenue up 1% to 拢2.9bn with pre-tax profit up 123% to 拢126m.
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