Keller Regulatory News (KLR)

For immediate release Tuesday, 19 November 2013 Keller Group plc Interim Management Statement Keller Group plc ("Keller" or "the Group"), the international groundengineering specialist, issues this Interim Management Statement, covering theperiod from 1 July to 18 November 2013. Overview The Group's trading in the four months to the end of October has continued theimproving trend established in the first half of the year. Although there has been no significant change in overall market conditionssince we last reported, our project awards have increased. Accordingly, thevalue of the like-for-like order book at the end of October, for work to beexecuted over the next 12 months, is now slightly above this time last year. As expected, revenue has been broadly flat, after adjusting for the effect ofacquisitions. However, the efficiencies driven by our ongoing businessimprovement initiatives, combined with very strong final results on somecompleted major projects, have generated better-than-expected marginimprovement. Accordingly, the Group's results for the full year are expected to be slightlyabove the top end of current market expectations. Divisional Review North America The US construction market as a whole continues to recover, albeit there aresome indications that the rate of recovery is slowing. Private expenditure onconstruction continues to grow, while public expenditure has fallen for thethird consecutive year. Following a strong first half, our North American business has continued toperform well. Our US foundation contracting companies are expected to end theyear with both revenue and, in particular, profit significantly ahead of lastyear. North American Piling, which we acquired in July 2013 and have rebrandedas Keller Foundations Canada, is performing in line with our expectations atthe time of the acquisition. Our post-tension cable systems business, Suncoast,continues to benefit from the positive momentum in the US residential sector. Europe, Middle East & Africa (EMEA) Conditions in our key EMEA construction markets remain mixed and in thoseregions where we have started to see signs of improvement, recovery continuesto be somewhat fragile. Despite this market backdrop, we expect overall revenue for the full year to beahead of last year. In profit terms, the self-help measures implemented bymanagement continue to bring benefits, which we expect to be reflected in amuch improved full-year operating margin. In South Africa, Esorfranki Limited has secured shareholder approval for ouracquisition of its geotechnical division, which we announced in October. Theacquisition is set to complete by the end of November. Asia Overall, we have seen little change in the conditions in our Asian markets. Revenue in the last four months has lagged behind the corresponding period lastyear, reflecting a slowdown in the Indian market and the absence of a majorproject in Malaysia to replace the Vale contract. However, operating profit forthe full year is expected to be close to last year's level, helped by a strongfinish on a number of projects and a good start on the Sengkang hospitalproject in Singapore, which together have helped to offset a weaker result inIndia. Australia As we reported in July, the resources sector of Australia's construction markethas been less buoyant than in recent years and this has not changed discerniblyin the past four months. Nor has there been any improvement in the weakcommercial and infrastructure sectors. Overall, however, Keller Australia has fared better than the market conditionsmight suggest, thanks to a strong performance on some of its larger contracts.In particular, since our last report, encouraging progress has been made on theWheatstone contract, the value of which has now reached A$200m (£116m) andwhich we expect will contribute towards a much-improved full-year result. Financial Position There has been no material change in the financial position of the Group sincethe interim results announcement on 30 July 2013. Outlook Given the better-than-expected improvement in the overall margin in the periodto the end of October, driven largely by business efficiencies and strongcontract outcomes, the Group's results for the full year are expected to beslightly above the top end of current market expectations. Looking further ahead, we remain optimistic about the long-term prospects forour sector and our business. Recent acquisitions have increased the Group'spresence in higher-growth regions and we feel that our business is in goodshape to take full advantage of future opportunities. Keller will issue a pre-close statement in respect of the year ending 31December 2013 on 19 December 2013. For further information, please contact: Keller Group plc www.keller.co.ukJustin Atkinson, Chief Executive 020 7616 7575James Hind, Finance Director FinsburyGordon Simpson, Rowley Hudson 020 7251 3801 This document contains forward-looking statements which have been made in goodfaith based on the information available at the time of its approval. It isbelieved that the expectations reflected in these statements are reasonable,but they may be affected by a number of risks and uncertainties that areinherent in any forward-looking statement which could cause actual results todiffer materially from those currently anticipated. Note to Editors Keller is the world's largest independent ground engineering specialist,providing technically advanced and cost-effective foundation solutions to theconstruction industry. With annual revenue of around £1.5bn, Keller hasapproximately 8,000 staff world-wide. Keller is the clear market leader in the US and Australia; it has primepositions in most established European markets; and a strong profile in manydeveloping markets.