For immediate release
19 November 2019
Keller Group plc
Keller Group plc ("Keller", or "the group"), the world's largest geotechnical specialist contractor, today issues an update on trading for the period ended 31 October 2019.
The Board expects the Group's overall performance for 2019 to be in line with market expectations, although the outturn remains dependent on the continued progress and timely resolution of a number of customer claims.
As anticipated, trading in North America has seen increased momentum in the important fourth quarter. The re-organisation of our North American foundations business, which will strategically position Keller to better win and execute work in the US, is on track with the new structure becoming effective from 1 January 2020. Whilst there has been material progress in the negotiations in respect of the scope adjustment to the Bencor long-term contract, it is unlikely to be settled until early 2020. We remain confident of a successful outcome.
EMEA trading has been mixed. There has been good progress in our key continental European businesses, with particularly strong performances from South East Europe and Central Europe. Challenging market conditions have continued outside of Europe. Further restructuring has now been taken in Franki Africa following continued disappointing performance during the year. In Norway, we have been awarded a major contract to complete soil stabilisation and grouting works, as part of the Sandbukta-Moss-Sastad (SMS2) rail project, valued at approximately €42m (c. £36m) and expect to start in November 2019 and complete in 2022.
In APAC our expectation of a return to profitability in the second half remains on track. The restructuring activities and exit from heavy foundations in ASEAN are close to completion and we continue to execute in line with our Waterway restructuring programme in Australia. Our Austral business unit has won the final contract it required to underpin its 2019 performance, a major contract to procure and construct the replacement of berthing structures at Rio Tinto's Cape Lambert Port in the Pilbara region in Western Australia. Work will start in late 2019 and is expected to finish in mid-2021, and is estimated to be worth approximately AUD$110m (c. £60m), Austral's largest ever contract.
Fourth quarter cash flows are strong and we expect our year-end leverage net debt/EBITDA to be below 1.5x (on an IAS 17 basis). Earlier this month, we successfully agreed with our banking group the planned one year extension of the group's £375m revolving credit facility through to November 2024.
The process of appointing a new CEO, led by the Nominations Committee, is ongoing, with an announcement anticipated during the first quarter of 2020.
Whilst current construction work in our key markets remains robust, we remain cognisant of increasing global macroeconomic uncertainty as we look ahead. In the medium term, Keller remains strategically well positioned with ongoing favourable market fundamentals expected to support profitable growth. The order book continues to be robust, and we remain focussed on positioning the business to take full advantage of the positive long term market trends of urbanisation and infrastructure growth.
For further information, please contact:
Keller Group plc 020 7616 7575
Michael Speakman, Interim Chief Executive Officer
Mark Hooper, Interim Chief Financial Officer
Caroline Crampton, Interim Head of Investor Relations
Gordon Simpson 020 7251 3801
Notes to editors:
Keller is the world's largest geotechnical specialist contractor providing a wide portfolio of advanced foundation and ground improvement techniques used across the entire construction sector. With around 10,000 staff and operations across six continents, Keller tackles an unrivalled 7,000 projects every year, generating annual revenues of more than £2bn.
This document contains certain 'forward looking statements' with respect to Keller's financial condition, results of operations and business and certain of Keller's plans and objectives with respect to these items.
Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'reasonably possible', 'targets', 'goal' or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates. For a more detailed description of these risks, uncertainties and other factors, please see the Risk Management approach and Principal Risks section of the Strategic Report in the Annual Report and Accounts.
All written or verbal forward looking statements, made in this document or made subsequently, which are attributable to Keller or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Keller does not intend to update these forward looking statements.
Nothing in this document should be regarded as a profits forecast.
This document is not an offer to sell, exchange or transfer any securities of Keller Group plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended).
Announcement classification: 2.2 Inside information. The person responsible for making this announcement is Kerry Porritt, Group Company Secretary and Legal Advisor
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