Earnings before interest and taxes hit by Australian floods, Middle East unrest and low US margins
Contractor Keller has said its order book and revenue are up compared to this time last year, but a lack of “meaningful recovery” in the global construction market means that its profitability has dropped.
In an interim management statement released this morning, it said that revenue in the first four months of the year had grown and its order book was up 9% compared to the end of April 2010.
But it said that several world events had combined to cut its expected EBIT - earnings before interest and taxes - for the year: “However, the impact of lower margins in the US, combined with the Australian floods and geopolitical issues in the Middle East and North Africa, mean that the Board now expects that the Group’s EBIT for the year as a whole will be around 10% below that in 2010, with the second half being broadly in line with last year.”
“As expected, we have seen no easing of the challenges facing our industry in the first few months of this year. There has not been any meaningful recovery in our construction markets in the US and Western Europe, which were most severely impacted by the global recession. Over capacity remains a significant issue, particularly in the US, putting continued pressure on margins,” it said.
Keller commented that the UK business had had a “difficult year to date” but was expected to have an improved second half.