LONDON (Alliance News) - Ground engineering company Keller Group PLC on Tuesday said it is on course to meet 2016 expectations following an in-line first four months of the year, though trading in its regional operations has proved mixed.
Keller said revenue and profit in the four months to the end of April were slightly up year-on-year, with good performances in North America and Europe, the Middle East and Africa offsetting weaker trading in Asia-Pacific. Tendering and contract award activity has been "generally healthy", the company said, and its order book at the end of April was 15% higher year-on-year.
"We have seen a solid start to 2016 despite a number of difficult markets. The order book is strong, and we anticipate making continued progress in the remainder of the year," said Alain Michaelis, Keller's chief executive.
Keller said North America, which accounts for around half of group sales, has continued to see steady growth in the construction market, with both public and private spending higher in the first quarter than against the prior year.
The US arm has performed well so far in 2016, Keller said, particularly its Hayward Baker geotechnical construction engineering services unit and its Suncoast post-tensioning materials business. Keller's Canadian arm, however, continues to operate in a difficult market, but expects conditions to improve in the second half as new work flows through.
In Europe, larger construction markets have continued to be stable in 2016, but Keller said it has seen project delays in the Middle East as a by-product of the low oil price.
Keller's most significant European businesses, including the UK, Germany, Poland and Austria, have all started well, but trading elsewhere in the EMEA arm is somewhat mixed, it said.
In Asia Pacific, however, Keller's key markets in Australia, Singapore and Malaysia have all struggled, with volumes "well down" on recent years. Revenue in Australia has fallen in the first few months of 2016, due both to weak market conditions and delays on large projects. As a result, Keller expects the overall Asia-Pacific business will post a loss for the first half.
Keller said it has continued to cut its cost base and re-size its Asia Pacific business units in line with current and anticipated volumes. However, Keller said it anticipates Asia Pacific revenue will push higher in the second half, based on its robust order book, and the division will return to profit.
The group also said Peter Hill will join the board as non-executive director and chairman-designate at the close of its annual general meeting on Tuesday. Hill will take over as non-executive chairman from July 26, when current chairman Roy Franklin will retire.
Hill is currently the chairman of ventilation products supplier Volution Group PLC and sits on the board of plastic and fibre products firm Essentra PLC.
The FTSE 250 company will publish interim results on August 1.
Keller shares were down 1.2% to 958.38 pence Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Keller (KLR)