Keller Group profits rise amid record order book

Shares in Keller Group rose on Tuesday as the company forecast full-year results to beat market expectations following an “outstanding” first-half performance.

Analysts had expected the FTSE 250 geotechnical engineering contractor to post between £176m and £179m in underlying operating profit this year.

But Keller told investors that its full-year expectations have “materially increased” as its order book hit a record £1.6bn at the end of June, up almost £150m from the previous 12 months.

Analysts now predict underlying operating profits of the company will be between £203m and £207m.

Keller Group Shares rose 9.7 percent to 1,512 pence by mid-afternoon on Tuesday.

This made them the best performers on the FTSE 250 index and brings their gains since the start of the year to around 77 per cent.

For the first six months of 2024, the company’s profits rose 69 per cent to £113.2m, largely due to growth in its North American foundations business.

The London-based company said the division benefited from “unusually good weather,” higher prices and healthy demand in the northeast and southeast regions.

Profitability was further supported by a turnaround at Austral, Keller’s Australian engineering services division, where two staff members were dismissed early last year due to suspicions of fraudulent behaviour.

The profit rise was achieved despite Keller’s total revenue expanding just 5 per cent at constant currency levels to £1.5bn.

Revenue was boosted by the completion of a major tunnel project in Central Europe and higher revenues in its US-based Moretrench industrial segment.

This offset lower sales at its Suncoast business and the non-recurrence of work on The Line, a linear smart city project under construction at NEOM in Saudi Arabia.

Keller chief executive Michael Speakman said the firm had “achieved outstanding results in the first half of the year, setting new records across the group.”

He added: ‘The current macroeconomic environment presents opportunities, particularly in North America, although there are challenges in some of our other markets.

“The strength of the group’s performance, coupled with the quality of our record £1.6 billion order book, gives us increased confidence in the outlook for the remainder of this year.”

Keller’s origins date back to Renchen, Germany, in 1860, when Johann Keller founded a pump and well construction business.

Major projects he has worked on include the Elizabeth Line, the Thames Tideway Tunnel and the extension of the ExCel exhibition centre.

Outside the UK, he helped build new stadiums for the Texas Rangers baseball team and the Dallas Cowboys football franchise, and a new production facility for Jaguar Land Rover in Slovakia.