Strong growth in EMEA offsets further losses in Asia and slowdown in US
Ground engineering contractor Keller has seen its pre-tax profit jump by over 100% on the back of a strong performance in the firm’s EMEA operations.
Pre-tax profit increased by 121% to £52m for the first half of 2017, up from £25m for the previous year.
Revenue was also up by over 16% to £991m for the six months ended 30 June 2017, up from £850m in 2016.
Keller said the increase in profitability was also down to a “significant reduction” in the loss recorded in its Asian and Australian operations during the period, while the growth in revenue was due mainly to the weakening of sterling over the last year.
The firm recorded a loss in its Asian operations for the first half of the year due to piling contracts in Singapore which were won in 2016 offsetting a good performance in its India business. Keller’s APAC business reduced its underlying operating loss to £3.8m from £9.6m last year.
Over the Keller has restructured its APAC operations merging its Singaporean and Malaysian foundation businesses and downsizing its piling business in Singapore.
Keller added that two significant loss-making projects, a joint venture in Australia and a legacy piling job in Singapore contributed to the ongoing losses in its APAC business.
The company added that profit for the first half of the year from its North American business was down on last year due to a “significant slowdown” in commercial construction in two large metropolitan areas.
The firm also reported that it had now recovered £35.3m of its original £54m writedown in 2014 in relation to a UK project completed in 2008.
The project was the construction of a major wine warehouse and processing facility in Avonmouth, near Bristol, which became the subject of disputes over allegations of defective work causing cracks to the floor slab.
Last year Keller acquired the property after the disputes were settled the previous year and sold it earlier this year.
The firm said it did not expect to recover any further money and that net cash cost to date of the dispute was £14.3m