Keller’s earnings double as US construction market rebounds

 
City A.M. Reporter
BRITISH engineering firm Keller Group’s first-half profit more than doubled, it said yesterday, as cost cuts and a recovery in the North American construction market helped widen margins.

Keller, which built the foundation for the Olympic Stadium in London, said it expected full-year results at the top end of market expectations but warned that the order book for the next 12 months was slightly below a year earlier.

The US construction sector is regaining strength after collapsing during the recession, with the housing market leading the way.

“North America is our largest division, especially with the recent acquisition of North American Piling. Recovery in the US will have the biggest impact on our business,” finance chief James Hind said.

Keller’s pre-tax profit surged 143 per cent to £26.8m in the six months ended 30 June, while operating margin improved to 4.4 per cent from 2.2 per cent a year earlier.

Revenue rose five per cent to £644.6m. Revenue from North America – its biggest market – rose 14 per cent to £308m, helped by two major transmission line projects.

But Hind warned that activity in Europe, Keller’s second largest market, was still subdued.

“The markets are very difficult and do not seem to be improving,” he said.

Keller also said it would continue cost cutting – including job cuts – after saving £3m so far this year.