Keller Group Outlook Optimistic As It Meets Interim Expectations

(Alliance News) - Geotechnical services firm Keller Group PLC is expecting a stronger second half to 2019, it said Monday, following an interim period in line with expectations.

Keller's revenue in the six months to June-end was GBP1.09 billion, up 2% at actual currency rates, though at constant currency the figure fell 2%.

Pretax profit was down 40% to GBP21.7 million, and on an underlying basis, pretax profit fell 32% at actual rates to GBP28.9 million.

Keller has increased its dividend for the period by 5% to 12.6 pence a share.

Chief Executive Alain Michaelis said: "The first half of the year has been a period of significant activity for Keller, implementing a series of group-wide improvements. Our 2018 restructuring plan has been a strong step forward, demonstrated by the successful ASEAN turnaround, and we remain confident in APAC returning to profitability in the second half. We are also enhancing our North America division through a reorganisation programme which we expect to drive material revenue growth."

"Despite a weaker start to the year, first-half results were in line with our expectations."

Revenue in North America rose 7% to GBP611.0 million at constant currency, with underlying operating profit down 4% to GBP32.4 million. The order book at the end of the half was up 8%, at GBP607.1 million.

Keller's Europe, Middle East, & Africa segment grew revenue by 5% to GBP342.4 million, though underlying operating profit dipped 50% to GBP10.6 million.

The decline in profit was mainly due to the non-repeat of two "highly profitable" projects in the Caspian sea and the Middle East.

Lastly, Asia-Pacific revenue fell 35% to GBP138.3 million, while the underlying operating loss widened to GBP2.6 million from GBP400,000. This performance was mainly hampered by weak market conditions.

"Despite a weaker start to the year, first-half results were in line with our expectations. Recent trading means we are entering the second half of the year with good momentum and expect a stronger second-half performance, supported by a robust order book," said Michaelis.

"Looking to the future, Keller remains well-positioned to take advantage of strong underlying market fundamentals driven by the ongoing global demand for urbanisation and infrastructure growth."

Keller shares were down 4.3% on Monday morning at 628.00 pence each.

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