Keller restructures as operating profit halves

Keller, the building foundation specialist, has reacted to a downturn in its UK operating profit, which was halved to £930,000 in the first six months of the year.

Chief executive Tom Dobson said: "We have withdrawn from under-performing heavy piling activities." He said weak margins were the result of overcapacity as many general contractors hung on to a surplus of large-diameter piling equipment.

Makers, the group's concrete refurbishment subsidiary, was hit by poor productivity in the highways sector and by the cancellation of a £6m car park project in Norwich. The company has now pulled out of reactive maintenance with the loss of 30 jobs.

A further 50 jobs have been cut in the ground engineering business. The restructure has cost £700,000 and another £1.3m will be needed to complete the sort-out. Overall, the group's turnover was 11% higher, at £280m, while pre-tax profit was unchanged at £10m.

Dobson said: "Market conditions in the UK foundations sector were stable, with housing remaining strong, but the commercial and infrastructure sectors were flat. Workload on CTRL and T5 has been out a long time and new workload is slower."

In contrast, the US market for foundations work remains resilient.

Justin Atkinson will become the group's new chief executive in the spring when Dobson retires.