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Keller announces 24% profit increase

Keller

After reporting strong operating profits, geotechnical contractor Keller has said it has long term ambitions to go from 10% to 20% market share.

“The core of Keller, we are still 10% of our market share that we can achieve,” said Keller chief executive Alain Michaelis.

“The global market is about $50bn of geotechnical work. We address geographies where the market is about $25bn, so we’re excluding places like China and Japan, and then of that $25bn, we have about $2.5bn. Realistically, could we get to 20% of the market share? Yes we could.

“We think we have plenty of scope to grow in our addressable markets and then of course you can go into areas which we’re not addressing. We’re not growth restrained.”

In its half year financial statement announced this week, the company reported its profits were up 24% – helped, said Michaelis, by favourable currency movements and a weaker pound. Although he said even taking this into account, profits remained at a healthy 14%.

At the beginning of the year it took over Geo-Instruments, a North American instrumentation and monitoring firm which Michaelis said was an important acquisition for the company. It is now looking to other “adjacencies” in which to expand and diversify the business.

“We’re looking into the near shore marine market and in the tunnelling market which we think we can get some exposure to,” he said.

“We’re also looking at ground remediation, either through stopping toxins getting though into ground water or through chemically treating ground for example, there’s some close synergies with what we already do.”

Looking to the future he said HS2 was an important project for the UK market. He said the company was already working with one of the consortium winners for the project and despite no formal contracts being in place, it was hopeful it would win work on the mega project.

Around the world, he admitted that the Australian and Canadian mining industry had slowed which had had an impact on the business, but he remained optimistic.

“The mining business in Australia and Canada has been tough and so we’re hoping some of those mining jobs will come through.”

However, he said, in the US, the company was at least three times the size of its nearest rival, making it well placed to win infrastructure projects.

The company also paid tribute to 18 of its workers killed in a tragic bus crash in South Africa earlier this month.

“It looks very much like the oncoming truck veered across and into our bus,” said Michaelis. “Our vehicles were in good shape and our drivers are well trained, so I guess it was an awful case of wrong place, wrong time.

“I’m impressed how people have come together and we’re helping with counselling and memorial services. We’re also helping with both with short term financial issues and longer term trust type mechanisms for the dependents and assisting the police as far as we can.

“We’re also learning the broader lessons for Keller, we have to be relentless in driving down risk. We’re well ahead of industry norms and we want to stay that way and the long term vision is zero harm.”

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