Keller draws £54m line under warehouse disaster

Grant Prior 9 years ago
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Keller has confirmed that its long running dispute on a defective warehouse job has cost the company £54m.

The ground engineering giant set aside an exceptional charge for the contract in its annual results today.

Keller has never confirmed the identify of the problem job but it is widely believed to centre on purported defects in a floor slab at a warehouse for which Keller designed and installed the piling.

Keller reached a settlement last month and added today: “The 2014 result includes an exceptional charge relating to the settlement of a dispute on a completed contract of £54m.

“The contract dispute relates to a project that the Group’s UK subsidiary, Keller Limited, completed in 2008.

“The dispute was subject to litigation proceedings involving a number of parties, but these were settled in February 2015.

“The final cost to Keller is subject to a number of remedial and other actions to be undertaken as part of the settlement agreement.

“The exceptional charge represents management’s best estimate of the net cost to Keller before taking account of future recoveries under applicable insurances.”

Keller has revamped its risk management practices in the wake of the dispute.

The firm said: “Although the exceptional contract dispute in the UK predated this recent period, lessons have been learned from this project and have been disseminated throughout the Group.”

Before exceptional items Keller saw group pre-tax profits rise to £85.1m for the year to December 31 2014 from £74.1m last time on turnover up to £1.6bn from £1.44bn.

Keller said the UK market had returned “to steady, albeit slow, growth.”

 

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