Keller Group plc (“Keller” or “the Group”), the international ground engineering specialist, is today providing a trading update for the year ending 31 December 2005 and announcing the completion of an acquisition in the US.
Trading Update
Since reporting strong interim results, all four US businesses have continued to exceed our expectations in the first three months of the second half which, together with a continuing strong order book, leads the Board to believe that 2005 will be an outstanding year for Keller, with results above current market expectations. It is now expected that Group turnover for the full year will be around £700m, with a record operating margin.
The current year has seen very strong market conditions in the US together with an excellent performance on a number of contracts. Whilst it is too early to gauge the trading outlook for next year, it is unlikely that this year’s exceptional trading result will be repeated in 2006. Nevertheless, the Board believe that 2006 will be another good year for Keller.
US Acquisition
The Group has acquired the business and assets of G. Donaldson Construction Company Inc. (“Donaldson”) of Cumberland, Rhode Island. Donaldson is a ground engineering contractor, which specialises in deep foundation and earth support services, serving the New England construction market.
The total consideration for Donaldson comprises an initial amount of $10.5m (£6.0m), including the assumption of debt, together with an earn-out based on future profits. Donaldson is expected to report annual sales of around $40m (£22.7m) in 2005.
Hayward Baker’s Boston office will be integrated with the Donaldson operation, which will be managed as a division of Hayward Baker.
The acquisition represents an excellent strategic fit with our existing US businesses and will enable us to grow our product mix in the New England market, where historically the Group has been under-represented.
Once again, this demonstrates Keller’s ability to source and deliver complementary, bolt-on acquisitions which enhance shareholder value. Together with the development of our existing businesses, this reflects our strategy of delivering continued long-term growth within our core competence of specialist ground engineering.
Keller intends to release a pre-close statement on 5 January 2006.
Commenting on the acquisition and current trading, Justin Atkinson, Chief Executive of Keller, said:
“We are pleased to have completed the purchase of Donaldson, which represents an excellent strategic fit with our existing US businesses and will enable us to grow our product mix in the New England market.
“2005 will be an outstanding year for Keller, reflecting very strong market conditions in the US together with an excellent performance on a number of contracts. The Board believes that 2006 will be another good year for Keller.”