Keller Share News (KLR)

LONDON (Alliance News) - Geotechnical contractor Keller Group PLC on Monday reported solid interim profit growth and said it expects its Asia-Pacific operations to become profitable in 2018.

For the six months to June, statutory pretax profit fell 35%, and 31% at constant currency rates, to GBP35.9 million.

However, on an underlying basis, the figure increased 7% at reported rates at 18% at constant currency to GBP42.2 million. This figure excludes exceptional items, with 2017's first half benefiting by GBP21 million due to a contract dispute.

Keller's revenue for the period came in at GBP1.08 billion, up 8% at reported rates and 15% at constant currency.

Keller is increasing its interim dividend by 24% year-on-year to 12 pence per share.

In North America, revenue rose 23% year-on-year to GBP432.4 million and underlying operating profit by 21% to GBP31.7 million. Around a quarter of growth was from acquired business Moretrench, bought in March. The North American division's comparable results also were weak a year ago, Keller said.

In Europe, the Middle East, & Africa, revenue actually fell 4% to GBP324.7 million, though underlying operating profit improved 5% to GBP19.7 million.

Keller said the decline in revenue was due to the early finish of its Caspian project. In Europe, constant currency revenue growth was 11%, and this region makes up 70% of the division's revenue.

Lastly, in Keller's Asia-Pacific operations, revenue increased 34% to GBP216.1 million while its underlying operating loss narrowed to GBP400,000 from GBP3.8 million. This, Keller said, comes after two years of "material" losses.

In the second quarter of 2018 the division made a profit, and Keller is confident for 2018 the segment will be profitable.

Keller said its order book remains over GBP1 billion, with "the majority" of markets remaining strong.

Overall, the company expects good progress going into the second half of 2018 and is confident in meeting 2018 expectations.

Keller also announced Monday the hiring of Paula Bell as a non-executive director from September.

She is currently Spirent Communications PLC's chief financial officer, and was former CFO of John Menzies PLC and Ricardo PLC. Before that, Bell held senior roles at BAA PLC, AWG PLC, and Rolls-Royce Holdings PLC.

Keller also has appointed Kate Rock, a former UK Conservative party vice-chairman, as a non-executive director from the same time.

Current Non-Executive Director Chris Girling will leave the company at its annual general meeting during May next year.

Keller shares were up 1.9% early on Monday at a price of 1,100.00p each.