Geotechnical firm Keller has merged its UK business with its operations in Europe, the Middle East and Africa (EMEA) to form a new division in a bid to operate more efficiently, it has emerged.
The news came as the company announced its results for 2011, which showed revenue for the global business rose 8% to £1.15bn but operating profit fell 49% to £28.9M due to a £21.8M goodwill impairment charge, made once the firm readjusted its valuation.
Keller chief executive Justin Atkinson said that the restructure, which is effective from January this year, will enable better transfer of skills and equipment around the region. The reorganisation will also help gains in some countries, such as Germany, offset the declines seen in more challenging markets. “The outlook in Europe is difficult and there is considerable economic uncertainty in the region,” said Atkinson. “The new structure will improve efficiency and make it easier to transfer skills and techniques - as we have for the Victoria Station upgrade – as well as equipment.”
The EMEA region contributes around 30% of the group’s revenues, with work in Poland, Germany and the UK making up 50% of the region’s turnover, he said.
Keller’s results for 2011 showed that Poland and Germany saw growth across most sectors. Keller’s business in France showed some stagnation but the UK — particularly the housing and commercial sectors of the market — declined and Spain contracted still further.
“In the UK we are fortunate to have won work on the Victoria station upgrade and Crossrail contracts, which will effectively insulate the business for the next two years,” said Atkinson. “But it is the smaller bread and butter projects that are missing from this market and which will prevent the UK business from growing.”
Atkinson also pointed to the development of new bottom feed vibro stone column Vibrocat rigs that the company will be rolling out in the region this year as an example of new equipment that will be available to projects across the EMEA region under the new structure.
Elsewhere in the group prospects are better and Atkinson reported a 10% increase in revenue in the US business. “Work in the US contributes about 40% of our turnover and it is encouraging that our growth there is ahead of what the national construction statistics suggest, although I do not expect to see a dramatic improvement in 2012,” he said.
Atkinson also reported that work in Asia and Australia is growing and the company has recently won two major contracts in the region. The company has said that £120M Wheatsone LNG plant contract in Western Australia will start late this year, while the £30M Vale foundations scheme for an iron ore distribution facility in Malaysia will start in March.
“Overall, while the business is expected to show steady improvement in 2012, the year will not be without further challenges, particularly given the economic uncertainty and a slow start to the year in Europe,” concluded Atkinson.