Keller sees slowdown in UK ground engineering

Aaron Morby 6 years ago
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Ground engineering specialist Keller has warned 2018 will be a tough year for the firm in the UK after seeing a marked slowdown in project tender opportunities.

Reporting strong worldwide group profit growth for 2017 and revenue topping £2bn for the first time, Keller said the UK, which accounts for 4% of group revenue, had a solid year in 2017, working on a wide variety of commercial and infrastructure projects.

Alain Michaelis, Chief Executive, said this year looked set to see a hiatus in activity before HS2 offered the opportunity to recharge the UK order book.

He said: “We have seen a notable slowdown in orders in recent months and expect 2018 to be a challenging year.

“However, the major infrastructure projects coming up in the UK, most notably HS2, should mean that the market for geotechnical work picks up noticeably in 2019 and 2020.”

The world’s largest geotechnical contractor saw revenue from operations around the world revenue rise 10% to just below £2.1bn.  Underlying profit before tax rose 16% to £99m, with staff numbers world-wide at over 10,000.

The main driver of profit growth came from the Europe, Middle East & Africa where underlying operating profit jumped 74% to £53m from revenue on revenue up a quarter at £737m.

This significantly higher result was largely the result of two large projects completing, the Caspian project and Zayed City in Abu Dhabi.

Between them, these projects accounted for around £100m of revenue and £30m of operating profit.

Keller announced it was changing the leadership of its Asia Pacific region after suffering a second year of losses in the region due to two contracts in Australia.

Peter Wyton has just joined the business from AECOM  and will take over from Mark Kliner as president of APAC with effect from 1 April 2018.

In North America, which accounts for around half the group’s revenue, revenue edged up by 2% to £967m, with underlying operating profit down 14% at £79m, although operating margin remained above 8%.

 

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