Keller Group’s profit more than doubled as the US market boosted its order book to record figures.
However, the firm’s chief executive projected the UK market could shrink in the wake of the government’s decision to cancel HS2’s phase 2a in October.
The ground engineering contractor, which is based in the UK but does the majority of its work in the US, reported a pre-tax profit of £95.3m in the six months to 30 June 2024, on an interim basis. That is more than double the £43.1m it made in the same period in 2023.
Turnover also crept up to £1.49bn from £1.47bn, while Keller’s net debt fell by 40 per cent to £199m from £331.6m.
Keller chief executive Michael Speakman told Construction News that the firm recorded a “big step up” in its work in North America. He pointed to “more growth” within the technology industry as a significant economic driver, especially around reshoring of new technologies and manufacturing.
“All of these things are feeding into construction spend – you don’t quite have the same phenomenon in Europe,” he said. “Both in terms of volume and to a certain extent pricing, it’s a beneficial environment [in the US], which, frankly, is in contrast to Europe, including the UK.
“The UK is slightly better. But Europe, I think, is a much tougher market to be in at the moment. There’s less spend on residential and therefore people are competing over a smaller amount of work and competing in other sectors and that makes it just a little bit tougher.”
Around 3 per cent of Keller’s work is in the UK, which Speakman does not expect to increase “massively” any time soon. But he said: “I think we will take more market share [in the UK] potentially.”
However, he warned there was a chance the UK market could “shrink a little bit”, due to the drop off in work on HS2 after former prime minister Rishi Sunak cancelled phase 2a last year.
“With HS2 rolling off the market, I think the whole UK market will probably get a little bit more competitive and may shrink a little bit,” he said.
But he clarified that was “largely dependent” on how the new Labour government performed in the coming months.
Speakman also called on the government to “take a longer term view” around infrastructure plans, to drive investment and confidence in the sector.
“If investors and other elements of the supply chain have a longer term to plan for, we can be more effective and more efficient in terms of serving our clients,” he said.
“The markets which prosper the best and have the best outcomes tend to be the ones which are more stable and more long term in their thinking.”
Looking ahead, Keller tabled a record order book of £1.6bn, while it increased its interim dividend to 16.6p from 13.9p – forecasting a full-year dividend increase of 5 per cent.
Speakman projected that Keller’s full-year performance would be “materially ahead of current market expectations” following its strong showing over the six-month period.
