Keller Group Shares Gapped Up 15.1% on an Upbeat Trading Update

The Keller Group plc (LON: KLR) share price gapped up 15.14% after issuing a trading update for the period ended 30 September 2023. The company is recognised as the world's largest geotechnical specialist contractor.

The Group has maintained its positive trading momentum throughout the third quarter, building on the exceptional performance recorded in the year's first half.

Given the robust trading performance achieved thus far and the ongoing positive momentum within the business, Keller anticipates its full-year underlying operating profit will significantly surpass the current market expectations.

In North America, Keller has witnessed pricing resilience that exceeded initial projections in Suncoast. Furthermore, the foundations business has shown sustained operational improvements, resulting in a strong performance. 

The operating margin has exhibited a more progressive recovery than initially anticipated. However, it is worth noting that the pricing benefits experienced at Suncoast are expected to moderate as we move into 2024, with margins returning to more normalised levels.

In the European market, the macroeconomic environment continues to pose challenges for the business. Weak demand has been observed in the region's residential and commercial sectors. A competitive pricing environment and the complexities of some challenging projects have impacted profitability. 

Keller Australia has exhibited strong performance in the Asia-Pacific, Middle East, and Africa (AMEA) region, particularly within the infrastructure sector. Austral has returned to profit in the third quarter as anticipated. 

The Group is in ongoing discussions with the client regarding awarding future works orders at NEOM. However, due to design evolution, the piling work on “The Line” has experienced delays, prompting the Group to take steps to redeploy resources in the short term.

Reflecting the Group's remarkable earnings performance and its continued emphasis on working capital management, Keller has generated significantly more cash than the previous year, surpassing initial expectations. 

Michael Speakman, CEO of Keller Group plc, said: “The Keller team has built on an exceptionally strong first half to deliver a better-than-expected third-quarter performance, and consequently, we now expect full-year underlying profit to be materially ahead of current market expectations. This performance reflects continued momentum, operational improvements within the business, and the outstanding contribution of colleagues across the Group, whom I would like to thank for their dedication and hard work”.

Keller Group (KLR) share price. 

The Keller Group (KLR) share price gapped up 15.14% to trade at 779.5p, from Friday’s closing price of 677.0p.