Keller UK losses deepen as office work dwindles

Aaron Morby 12 years ago

Global piling contractor Keller reported losses at its UK business for the second-year running despite measures to cut costs.

Operating losses at the UK business deepened from £2.7m in 2010 to £3.7m in 2011 despite turnover edging up 8% to £53.6m.

Over the year, the UK business reduced its costs, with the closure of one office and the downsizing of another.

Despite these actions, Keller reported a loss in the UK, exacerbated by the impact of two legacy contracts.

But Keller hopes to see an uplift this year after its £37m Victoria Station Upgrade project and £31m contact for Crossrail started as anticipated at the end of last year.

Another Crossrail contract for the largest-ever restricted access piling project awarded in the UK, at Lord Hill’s Bridge 4 is progressing well.

The first phase requiring the installation of vertical piles is now complete. The more challenging second phase, which involves installing mini piles at up to 38-degree angles, is progressing well.

But Keller warned that it had seen a decline in house building and commercial work.

Across the rest of the group, pre-tax profits nearly halved to £22m on turnover slightly up at £1.15bn.

Keller at a glance

  • UK: loss £3.7m (2010: £2.5m); revenue £54m (2010: £50m)
  • America: profit £12m (2010: 6.9m); revenue £471m (2010: £425)
  • EMEA: profit £18m (2010: £19m): revenue £407m (2010: £400m)
  • Australia: profit £6.7m (2010: 19m); Revenue £222m (2010: £194m)

Justin Atkinson, Keller chief executive said: “These results reflect tough market conditions which remained very challenging throughout 2011, with the uncertain macro-economic outlook impeding any significant recovery in our mature construction markets – principally the US and Western Europe – and overcapacity maintaining pressure on margins.

“Overall, while the business is expected to show steady improvement in 2012, the year will not be without further challenges, particularly given the economic uncertainty and a slow start to the year in Europe.

“However, with signs of strengthening demand in certain of our key markets, an increased number of larger projects in the order book and with the benefits of our Group-wide business improvement initiatives starting to come through, we are confident that 2012 will be a year of progress.”

The UK is the only one of Keller’s global operating region’s still returning losses and from this year on will be incorporated into the European division for financial reporting purposes.

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