4th Aug 2014 06:58
LONDON (Alliance News) - Keller Group PLC Monday reported a 21% increase in pretax profit for the first half, despite tough market conditions in Canada, a market it has targeted over the last 18 months.
The FTSE 250 engineering contractor posted pretax profit of GBP32.5 million for the six months ended June 30, up from GBP26.8 million a year earlier, as revenue rose 22% to GBP788.2 million from GBP644.6 million.
Keller said all four of its divisions achieved strong revenue growth compared with the same period a year ago, despite an adverse currency translation impact.
On the back of this, the company increased its interim dividend 5% to 8.4 pence from 8.0 pence a year earlier.
Keller said its biggest division, North America, performed particularly strongly throughout the year with revenue rising to GBP373.0 million, up from GBP308.0 million a year earlier. It said Hayward Baker, its US construction engineering solutions business continues to make gains following a number of profitable contract wins.
The company said the integration of Keller Canada into the North America division continues to progress against tough market conditions. Keller said it is seeing revenue from projects in the Alberta oil sands and other resource markets replaced in part by lower-margin commercial work. As a result, Keller Canada profit was below expectations.
Canada as been a target for the company, and in 2013 Keller acquired Geo-Foundations Contractors, a business based in Toronto, for GBP5.7 million.
Revenue for Europe, Middle East and Africa increased to GBP214.4 million in the recent half from GBP185.5 million a year before, with the division helped by good contributions from a number of projects, several of which have recently completed or are nearing completion. These include the Berlin State Opera House in Germany and the Nowy Swiat Financial Centre in Warsaw, Poland.
The Asia and Australia businesses, which have struggled in recent times, both reported an increase in revenue for the first half.
Keller said revenue rose to GBP56.6 million from GBP44.4 million for its Asia arm, while the Australia division reported revenue of GBP144.2 million, up from GBP106.6 million a year earlier.
"The resources sector of Australia's construction market remains subdued but we are seeing some signs of recovery in the commercial and infrastructure sectors," Keller said.
Looking ahead, Keller said it expects the US construction markets to continue improving. However it is less optimistic about Canada, with no signs of any pick up in the key oil-sands markets.
Overall, the group said its results for the full-year are expected to be in line with current market expectations.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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