Ground engineering contractor makes profit after £62m sale

Ground engineering giant Keller has sold a problem wine warehouse it bought a year ago for £62m.

The warehouse in Avonmouth near Bristol - which was completed in 2008 but became the subject of disputes over allegations of defective work causing cracks to the floor slab - was bought by Keller last May after the disputes were settled the previous year.

Keller had made a £54m writedown related to the property - so the firm said it had made an £8m exceptional profit through the £62m sale, which will boost its 2017 results. Keller said it had also made £4m of rental income from the warehouse over the year.

In a seperate trading update ahead of its annual general meeting, the firm said revenue and profit were both up on the first four months of last year, with the company trading in line with expectations.

Commenting on divisional performance, the firm said: “Our North American division has had a solid start to the year, albeit behind the very strong first four months in 2016.

“EMEA has continued its growth trend of recent years, helped by ongoing good contract execution on large projects.

“APAC’s results show a significant year on year improvement with encouraging growth in revenue although, as expected, the division still recorded a loss in the period”.

The firm’s chief executive Alain Michaelis told Building in February he could see opportunity in the US to capitalise on president Donald Trump’s planned $1tn infrastructure programme.

Michaelis, the former Rolls Royce group operations director who took over from previous boss Justin Atkinson last May, said the firm forecast its North American business would be able to take advantage of Trump’s building push from 2018-19 when it expects projects to come on to site.

“We are three times bigger in the US than the market players in that space, so we’re well placed,” he added.

In its results for 2016, the firm posted pre-tax profit of £73.9m on revenue of £1.78bn, up from £56.3m and £1.56bn respectively the previous year.