Thursday 16 May 2019 3:50 pm | Updated: Wednesday 05 June 2019 8:45 am

Keller Group struggles to shake difficult 2018 as it projects lower interim profits

Keller Group shareholders headed into the engineering contractor’s annual meeting (AGM) this morning on the back of news the firm’s first half profits will be lower than last year.

The firm, which embarked on a major restructuring last year, warned investors it had experienced “modest trading” so far this year, but that it expected to business to perk up in the second half. Shares initially fell around two per cent this morning before recovering to about 0.1 per cent down, valued at 706p this afternoon.

Keller employs more than 10,000 people across 40 countries, with nearly half of its revenue coming from its North American business. Profits were flat in the region last year, with the benefit of the acquisition of US constructor Moretrench offset by an “adverse mix of projects”. Today, it said Moretrench is “performing well and planned cost synergies have been exceeded”.

The firm experienced a difficult 2018, in which profits plunged 92 per cent year-on-year to just £8.4m, and said in March it hoped to see an improvement this year. Despite this, Keller told markets this morning its overall order book has shrunk year-on-year, net debt has risen slightly since the end of last year, and its upcoming interim results on 29 July will be “materially lower” than last time around.

This was partly down to poor weather affecting its key North American market in January, as well as its Middle East operation having “a much quieter year” after recently finishing a number of major projects.

However, the company expects a “much stronger second half, and for full year revenue to be broadly flat on 2018, with an improvement in margin driving a recovery in profit”. This is in part down to the expectation that restructuring its Asia-Pacific business will start to pay dividends.

“Overall Keller continues to expect to make good progress in 2019,” it said.