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US recovery bolsters Keller results

Keller has reported a rise in profit despite lower revenues for the first six months of this year thanks to improvements in the North American and Europe, Middle East and Africa (EMEA) markets.

Revenue fell 4% to £755.8M, compared to the same period last year, but margin improvements by 0.5% to 5% helped to increase EBITDA by 5% compared to the same period to £62.8M.

“While conditions remain challenging in many of the markets in which we operate, the recovery in US construction, the group’s largest market, remains robust and broad-based,” said Keller chief executive Alain Michaelis. “This, together with the benefits from improvements that the group has implemented, means that the board remains confident that the group’s results for the year will be in line with current market expectations”.

Keller has reported that revenue in EMEA in the first half of 2015 was 2% down on the same period in 2014, although the company has said that this comparison is distorted by exchange differences. “On a like-for-like basis, revenue actually increased by 5%,” said Keller in a statement. “Operating profit more than doubled and the operating margin increased to 3.3%.

“Most European construction markets continue to be challenging. To date, our businesses have seen few signs of any market recovery and competition remains intense. Elsewhere in EMEA, however, there are better prospects, particularly in the Middle East and certain African countries.

“Keller’s German subsidiary produced a good result and our business in Poland, after a quiet first half, is well set for the remainder of the year. The major rail project in Austria announced in February is now up and running, underpinning a much improved result in the country.

“Having completed its major projects at Crossrail and Victoria Station, revenue in the UK was down on last year but strong recent contract awards should lead to an improved second half. Our businesses in southern Europe continue to face very difficult market conditions.

“The Middle East and Africa, particularly South Africa, performed well in the first half of the year. Our work on Ada phase 2, the major jetty project on the coast of Ghana, is progressing well. We are now mobilising on the group’s major project in the Caspian region, after some delays earlier in the year.”

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