Annual revenue was £1,562.4m in 2015, down from £1,599.7m in 2014). This was primarily due to the completion of the Group's largest-ever contract, Wheatstone in Australia, towards the end of 2014. Operating profit increased by 12% to £103.4m (2014: £92.0m), and profit before tax increased to £95.7m, up 12% on the previous year's £85.1m.
"The Group has performed well in 2015,” said chief executive Alain Michaelis. “We have been pleased to record another year of profit growth despite sales being lower as a result of less revenue from large projects. At the end of January, the Group order book of work to be undertaken over the next twelve months, including that of 2015 acquisitions, was 15% higher than at the same time last year, with increases in all divisions.”
The USA is Kelller’s largest single market, accounting for almost 50% of its revenue of the group, which employs about 10,000 staff worldwide. In the USA, expenditure on construction increased significantly for the fourth consecutive year, with good growth in most segments of the market. Keller saw continuing improvements in underlying operating performance and has a strong order book there.
Conditions in European markets are mixed, with southern Europe, in particular, remaining challenging, said Michaelis. There are some positive signs in the central European markets of Germany, Poland and Austria, as well as in the UK.
“Overall, 2016 results are expected to be in line with the board's expectations," said Michaelis.
The operating margin improved to 6.6% (2014: 5.8%). Keller said that the margin uplift reflects a combination of improving conditions in certain markets, most notably the US, as well as further success in its drive for improvements in all aspects of the business and some good final project settlements.
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“We will continue to grow,” said Michaelis. “We estimate the global ground engineering market to be worth US$50bn, so our global market share is 5%. Even if we consider our addressable market share, this figure only rises to 10%. This is a fragmented industry which we believe will continue to consolidate. As the leading independent player and with a strong balance sheet, Keller is best placed to gain market share both organically and through further acquisitions.”
Elsewhere, there are good opportunities in the Middle East where Keller’s construction markets have been relatively unaffected by the low oil price. The construction market in South Africa is slowing and whilst there are opportunities elsewhere in Africa, a number are in the oil and gas sector and their timing is therefore uncertain.
In Canada, construction activity in the resources markets remains very subdued although demand in the commercial and infrastructure segments fared somewhat better, reported the company.
Construction expenditure in the Group's Asian markets remains varied. In India it is continuing to see signs of increasing business confidence, but the Singapore and Malaysian markets are relatively quiet.
In Australia, construction expenditure across most segments has been subdued for some time and is showing few signs of improving. An exception is the near-shore marine segment where there remain a number of projects to upgrade or expand ports and harbours.
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