Keller enjoys jump in pre-tax profit to £103m

Keller, the international ground engineering specialist, has pushed its pre-tax profit up through the £100m barrier for the first time.

The performance could well make it the UK’s most profitable construction firm.

Turnover in the 12 months to 31 December 2007 was up 11% to £960m while pre-tax profit surged to £103m (comparable figure in the previous year: £84m).

The UK now accounts for less than 10% of Keller’s workload.

Justin Atkinson, chief executive, said: “I am pleased to announce a record set of results. This third successive year of excellent growth reflects the successful execution of our strategy which has transformed the scale and profitability of the group.”

Keller has announced a buy-back programme for up to 5% of its shares.

Cash generated from operations last year ran to £120m (comparable figure in 2006: £100m). Net debt at the year end was £55m, representing a rise of £15m, after a total spend of £35m on acquisitions.

Turnover in Keller’s four main operating divisions was:

• £470m – North America
• £300m – Continental Europe, Middle East & Asia
• £110m – Australia
• £80m – UK

Operating profits from each of the global territories followed a similar pattern:

• £62m – North America
• £30m – Continental Europe, Middle East & Asia
• £15m – Australia
• £4m – UK

Atkinson said that strategy is unchanged: namely to extend global leadership in ground engineering through both targeted acquisitions and organic growth.

“What we have been doing particularly well is where we have made a buy, then we grow it organically post-acquisition through cross-fertilisation,” he said. “The push is to grow the top line.”

In Central Europe, Keller undertook stabilisation works for frail tunnelling projects in Amsterdam and Leipzig.

The Leipzig tunnel goes directly underneath many of the city’s historic buildings and, in order to avoid settlement, these buildings are being lifted by up to 10mm using a special grouting technique.

In Australia, Keller’s presence was helped by the acquisition of Piling Contractors in 2006. In revenue terms, Australia has trebled since 2005.

The most notable Australian project in 2007 was the Gateway Upgrade in Brisbane where all four of the group’s businesses are working together. The task entails building the foundations for the largest road and bridge infrastructure project in Queensland’s history.

It called for bored piles, pre-cast piles and ground improvement works. Although the scope has been extended, completion should still be achieved in autumn 2008.