Keller’s half-year results have been overshadowed by a £30M exceptional charge for a disputed contract.
The ground engineering specialist posted a £32.5M pre-tax profit for the first six months of 2014, a 21% increase on the same period last year – but this will be almost wiped out by the charge, which centres on a project that Keller’s UK business completed in 2008.
A statement from the group said: “The dispute relates to purported defects in a floor slab at a warehouse for which Keller Limited [the UK Keller business] undertook the design and construction of the piling. These purported defects are alleged by other parties to be due, in part at least, to deficiencies in the provision of Keller’s services.
“The claims intimated against Keller Limited, which are currently the subject of litigation, are denied and being vigorously defended. However, the board has determined that, given the uncertainties inherent in any litigation, it would be appropriate to record an exceptional charge of £30M in the group’s 2014 half year results. The amount is stated before taking account of recoveries under applicable insurances which are yet to be agreed, as these cannot be recognised under IFRS [International Financial Reporting Standards].”
Keller’s interim results were otherwise positive, with revenue up 22% to £788.2M (2013: £644.6M).
Justin Atkinson, Keller chief executive said: “We have seen an improved first-half performance, with all four of the group’s divisions achieving strong revenue growth compared to the same period last year, despite the adverse currency translation impact.”
“We expect the group’s results for the full year to be in line with current market expectations and, looking further ahead, we remain optimistic about our long-term prospects. Keller continues to make positive progress against its strategy and is well positioned to take full advantage of future opportunities.”