Drilling boom helps Keller strike gold in North America while Europe falls behind
Keller has seen a 67 underlying profit leap driven by North America
The 2023 fossil fuel drilling boom in North America has driven Keller’s profit up nearly 70 per cent, offsetting weak European performance.
In its results for the year ended 31 December 2023, , the world’s largest geotechnical specialist contractor saw underlying operating profit before tax rise to £153.4m, up from £93.5m the year prior.
Underlying diluted earnings per share rose to 153.4p from 100.7p in 2022, while free cash flow swelled 405 per cent to 103.2p and net debt fell to £146m.
Through the second half of 2022, decisions taken by management to improve project performance in North America generated a significant and sustainable improvement in performance in 2023 and was the “main driver” of the group’s very strong results, the firm said.
This included underlying profits more than doubling year-on-year to £169.9m, driving the underlying operating margin to an increase of 9.6 per cent against 4.3 per cent in 2022.
European revenues increased by a modest 4.2 per cent but indicated a wider weakness in demand, particularly in the residential and commercial sectors, with underlying profit in the region falling 94 per cent year-on-year.
The firm now expects to focus on “organic” growth within its regions and examine “bolt-on” M&A opportunities as and when they arise.
Michael Speakman, chief executive officer said: “In 2023 the group delivered a record set of financial results, establishing a new foundation for future long term growth and supporting a material re-basing of the dividend with a full year increase of 20 per cent.
“Whilst political and macro-economic uncertainties will undoubtedly remain and impact our markets in the short term, our current level of trading together with our robust order book mean that we enter the new year with confidence.
The strong momentum of the business is encouraging and whilst inevitably there will be fluctuations across the Group, our diverse revenues and improved operational delivery underpin our expectation that 2024 will be another year of underlying progress.”
Keller’s compatriots in the specialist technical machinery world, Hunting and Weir Group, also reported stronger-than-expected returns last week, despite the woes of some of the major miners.
