Keller on track for full year but Europe markets weak

(Sharecast News) - Keller said on Thursday that it remained on track to deliver a full-year performance in line with expectations as it announced the appointment of a new chairman, but shares in the geotechnical specialist contractor slumped as it pointed to weak activity levels in Europe. In an update for the period ended 31 October, Keller pointed to continued "robust" delivery buoyed by some historical items and contractual claims, with a modest weighting towards the first half of 2024 as previously cited.

"Whilst the current macroeconomic environment presents both opportunities and challenges across our markets, the overall performance of the group, together with our continuing record order book and the groupwide focus on improving project execution, gives us confidence for the short and medium term," it said.

In North America Foundations, Keller said it continued to sustain the improvement in underlying contract performance, execution and commercial discipline while benefiting from the "buoyant" market conditions seen in 2024.

At Suncoast, profitability has tempered as expected, it said, reflecting the reversion of pricing to more normalised levels and lower residential trading volumes.

In the Europe and Middle East division, the macroeconomic environment remained a challenge across Europe.

"As a result activity levels remained weak in the European residential and commercial sectors and profitability continued to be impacted by the competitive pricing environment," it said.

"The performance of the challenging projects we have previously cited within the division have continued to improve following management actions, albeit one of them remains loss making in the period."

In Asia-Pacific, meanwhile, Keller said its performance remained "robust", driven by the strong turnaround of Austral.

Keller Australia and India continued to perform well, whilst in ASEAN, the market remained slow.

Chief executive Michael Speakman said: "Keller has continued to sustain the material step-up in operational and financial performance delivered in 2023 and remains on track to deliver a full-year performance in line with expectations for 2024.

"Our performance reflects the continuing strength of the group's presence in the key North American market and the groupwide focus on improving project execution and delivery. The group's record order book and geographically diverse portfolio provides both visibility and resilience in the current mixed economic conditions, underpinning our confidence as we close the year."

The trading update came alongside news that Keller has appointed Carl-Peter Forster as a non-executive director and chair designate.

Forster is currently chairman of Vesuvius and Chemring and the senior independent director and Remuneration Committee chair at Babcock International. On 30 November, he will step down as chairman of Chemring, as previously announced.

Forster will succeed Peter Hill, whose departure was announced in July.

At 1025 GMT, the shares were down 13% at 1,428p.