Keller Group PLC on Monday predicted its annual profit will top market expectations, despite tricky trading conditions in Europe.

Keller shares were 9.5% higher at 737.00 pence each in London on Monday morning.

The geotechnical engineering firm said ‘positive trading momentum’ in the first half of 2023 continued

in the third quarter.

‘Given our trading performance to date and the continued momentum in the business, we now expect full-year underlying operating profit to be materially ahead of current market expectations,’ Keller said.

According to the company-compiled consensus forecasts as of July 12, an underlying operating profit of £132 million is expected for 2023. This would be a 22% rise from the £108.6 million achieved in 2022.

Keller said pricing in North America at its Suncoast division was ‘more resilient’ than expected, leading to a better-than-forecast margin recovery.

However, it cautioned: ‘The pricing benefit at Suncoast is expected to moderate into 2024 with the margin returning to more normalised levels.’

Suncoast serves the infrastructure, industrial, residential and commercial construction sectors.

In the Asia-Pacific, Middle East & Africa region, Keller is also ‘performing strongly’.

Things are trickier in Europe, however. The company warned that a second half profit improvement in the region will be weaker than expected. It has taken ‘appropriate corrective actions’ as a result.

‘In Europe, the macro-economic environment remains a challenge for the business, resulting in weak demand in the residential and commercial sectors across the region. Profitability continues to be impacted by the competitive pricing environment and the impact of some challenging projects, whilst the effect of several large successful projects in the prior year, provides a tough comparator for the period,’ Keller explained.

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