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 £176m and £179m this year but this has now been revised upwards to between £205m and £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 £106m on revenue up 4% to £884m in the six months to June.
Chief executive Michael Speakman said he didn’t expect this November’s US election to affect workloads and played down the impact of recent worries the US economy is heading for a slowdown. “We don’t think it will affect us too much in 2024, there may be some headwinds in 20205 – we’ll wait and see.”
The firm’s Europe and Middle East business saw income grow 6% to £419m but underlying operating profit fell 74% to £3m.
Keller said it had been impacted by problems on the Trojema mountain resort project on the Neom scheme in Saudi Arabia.
It added: “The 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.”
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 “bonkers” not to run the railway into Euston and this morning added: “If I was in Rachel Reeves’ shoes, yes you have books to balance but I would expect her to complete the London end of the line.”
Keller’s 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’s 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 £1.5bn but pre-tax profit was up 121% to £95m. Underlying operating profit was up 69% to £113m. The firm said its order book stood at a record £1.6bn.
In a note, broker Investec said it was raising profit forecasts to £207m this year and £209m next. “Full year profit expectations are materially higher and look well supported by a strong order book,” it added.
Keller turned in a record set of results last year with revenue up 1% to £2.9bn with pre-tax profit up 123% to £126m.
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