4 March 2025

 

Keller Group plc audited Preliminary Results for the year ended 31 December 2024

 

Keller Group plc ('Keller' or 'the Group'), the world's largest geotechnical specialist contractor, announces its results for the year ended 31 December 2024.

 

Another outstanding set of results ahead of expectations with improved performance in all key measures

 

	2024 £m	2023 £m	% change	Constant currency % change
Revenue	2,986.7	2,966.0	+1%	+4%
Underlying operating profit1	212.6	180.9	+18%	+22%
Underlying operating profit margin1	7.1%	6.1%	+100bps
Underling profit before tax1	191.4	153.4	+25%
Underlying diluted earnings per share1	199.9p	153.9p	+30%
Free cashflow	192.6	103.2	+87%
Net debt (bank covenant IAS 17 basis)2	29.5	146.2	-80%
Total dividends for the year per share	49.7p	45.2p	+10%
Statutory operating profit	205.1	153.1	+34%
Statutory profit before tax	183.9	125.6	+46%
Statutory diluted earnings per share	193.3p	120.5p	+60%
Net cash inflow from operating activities	265.9	197.0	+35%
Statutory net debt (IFRS 16 basis)	126.9	237.3	-47%

^{1 Underlying operating profit, underlying profit before tax and underlying diluted earnings per share are non-statutory measures which provide readers of this announcement with a balanced and comparable view of the Group's performance by excluding the impact of non-underlying items, as disclosed in note 9 of the consolidated financial statements}

^{2 Net debt is presented on a lender covenant basis excluding the impact of IFRS 16 as disclosed within the adjusted performance measures in the consolidated financial statements}

 

Highlights

 

·      Another outstanding result as we continued to build on the material step-up in operational and financial performance delivered in 2023

·      Revenue of £2,986.7m, up 4% on prior year at constant currency

·      Record underlying operating profit of £212.6m, up 22% at constant currency, with a modest weighting towards the first half of 2024 as previously indicated. Statutory operating profit up 34%

·      Underlying operating profit margin increased by 100bps to 7.1% (2023: 6.1%)

·      Free cash flow generation increased by 87% to £192.6m

·      Underlying diluted EPS of 199.9p, up 30%, driven by higher profitability, reduced financing costs and a lower Group effective tax rate. Statutory EPS up 60% with significant reduction in non-underlying items

·      Underlying ROCE increased to 28.2% (2023: 22.8%), the highest for 16 years

·      Significant deleveraging with net debt of £29.5m, down £116.7m, driven by strong profitability and robust cash generation, resulting in a net debt/EBITDA leverage ratio of 0.1x (2023: 0.6x)

·      Record year-end order book of £1.6bn (2023: £1.5bn)

·      Safety: accident frequency rate halved to 0.05, a material improvement on prior year (2023: 0.10)

·      In recognition of the excellent performance and the Group's future growth prospects, the Board is recommending a final dividend of 33.1p, bringing the total dividend for the year to 49.7p (2023: 45.2p), an increase of 10%

·      In addition, Keller announces its intention to launch a multi-year share buyback programme, with an initial tranche of £25m in the first quarter of 2025

Michael Speakman, Chief Executive Officer said:

 

"2024 was another outstanding year for Keller, ahead of expectations, delivering improved performance across all key metrics - profits, earnings, margin, return on capital, cash conversion and debt reduction. This performance builds on the positive momentum developed in recent years as a result of the disciplined execution of our strategy. Since the strategy was first launched in 2019, we have rationalised the geographic and product portfolio of the Group and more recently focused on improving the project execution across the business. The result is a more consistent performance, improved operating margins and higher levels of cash flow have allowed the Group to grow earnings and de-lever the balance sheet considerably, and given us the platform to increase the dividend and announce our intention to launch a multi-year share buyback programme, part of an ongoing commitment to return capital to shareholders.

 

Our record year-end order book of £1.6bn across our diverse revenue streams underpins our expectations for growth in the next phase of implementation of the Group's strategy. Whilst we remain mindful of the uncertain geopolitical and macroeconomic environment in the short-term, we anticipate further progress in 2025 and a return to our typical second half weighting. We have ensured that Keller is set up to be resilient over the medium and longer term and well positioned to capture growth opportunities both organically and through selective M&A. We are strongly encouraged by the sustained improvement in the Group's performance that provides the platform to continue to enhance shareholder value."

 

For further information, please contact:	www.keller.com
Keller Group plc	020 7616 7575
Michael Speakman, Chief Executive Officer
David Burke, Chief Financial Officer
Caroline Crampton, Group Head of Investor Relations
FTI Consulting	020 3727 1340
Nick Hasell
Matthew O'Keeffe

 

A webcast for investors and analysts will be held at 09.00 GMT on 4 March 2024

and will also be available later the same day on demand

 

https://connectstudio-portal.world-television.com/en/67a3c49885959b153c4ce1d5

 

Conference call: Participants joining by telephone: UK (Toll-Free): 0800 358 1035  UK(Local): +44 (0)20 3936 2999  All other locations: +44 20 3936 2999 Participant access code: 966988

Accessing the telephone replay: A replay will be available until 12 March 2024 UK (Toll-Free): 0800 304 5227 UK: +44 (0)20 3936 3001 Access Code: 685714

 

Notes to editors:

Keller is the world's largest geotechnical specialist contractor providing a wide portfolio of advanced foundation and ground improvement techniques used across the entire construction sector. With around 10,000 staff and operations across five continents, Keller tackles an unrivalled 5,500 projects every year, generating annual revenue of c£3bn.

 

Cautionary statements:

This document contains certain 'forward-looking statements' with respect to Keller's financial condition, results of operations and business and certain of Keller's plans and objectives with respect to these items. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'reasonably possible', 'targets', 'goal' or 'estimates'. By their very nature forward looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the regulatory and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; and changes in interest and exchange rates. For a more detailed description of these risks, uncertainties and other factors, please see the Principal risks and uncertainties section of the Strategic report in the Annual Report and Accounts. All written or verbal forward looking-statements, made in this document or made subsequently, which are attributable to Keller or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Keller does not intend to update these forward-looking statements. Nothing in this document should be regarded as a profits forecast. This document is not an offer to sell, exchange or transfer any securities of Keller Group plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act.

LEI number: 549300QO4MBL43UHSN10. Classification: 1.1 (Annual financial and audit reports)

 

 

Adjusted performance measures

 

In addition to statutory measures, a number of adjusted performance measures (APMs) are included in this Preliminary Announcement to assist investors in gaining a clearer understanding and balanced view of the Group's underlying results and in comparing performance. These measures are consistent with how business performance is measured internally.

 

The APMs used include underlying operating profit, underlying earnings before interest, tax, depreciation and amortisation, underlying net finance costs and underlying earnings per share, each of which are the equivalent statutory measure adjusted to eliminate the amortisation of acquired intangibles and other significant one-off items not linked to the underlying performance of the business. Net debt (bank covenant IAS 17 basis) is provided as a key measure for measuring bank covenant compliance and is calculated as the equivalent statutory measure adjusted to exclude the additional lease liabilities relating to the adoption of IFRS 16. Further underlying constant exchange rate measures are given which eliminate the impact of currency movements by comparing the current measure against the comparative restated at this year's actual average exchange rates. Where APMs are given, these are compared to the equivalent measures in the prior year.

 

APMs are reconciled to the statutory equivalent, where applicable, in the adjusted performance measures section in this Announcement.

 

 

Chief Executive Officer's review

Overview

2024 was another outstanding year for Keller, surpassing the record financial performance achieved in 2023. Keller has continued to sustain the material step-up in performance delivered in the prior year in a macro environment that presented both opportunities and challenges.

We have ensured Keller is set up to be resilient over the medium and longer term to capture the growth opportunities we see through continuing positive market demand trends, as reflected in our record year-end order book of £1.6bn (£1.5bn at December 2023), and the effective execution of our strategy.

We are implementing the right set of actions to enhance value now and in the longer term. By doing so, we are well positioned to benefit from our specialist products and solutions offering that play a critical role in the construction industry today and in the future.

We remain fully committed to safety and consistently work towards fostering a workplace where every employee can go home safe and healthy at the end of each day. An increased leadership presence on site, with a focus on high potential risks, played a key role in achieving an improved recordable injury frequency rate in 2024.

Keller has an unbroken record of dividend payments, with the consistent and material growth in its dividend in the 31 years since listing, clearly demonstrating the Group's ability to continue to prosper through economic downturns, including both the global financial crisis and the pandemic. In recognition of the excellent performance in the year and the Group's future growth prospects, the Board is recommending a 10% increase to the dividend for 2024. In addition, given the strength of the Group's balance sheet, Keller announces its intention to launch a multi-year share buyback programme, with an initial tranche of £25m in the first quarter of 2025, part of an ongoing commitment to return capital to shareholders.

Financial performance

Group revenue at £2,986.7m (2023: £2,966.0m) was 4% higher on the prior year on a constant currency basis, while underlying operating profit was up 22% on a constant currency basis, to a record £212.6m (2023: £180.9m), with, as previously indicated, a modest weighting towards the first half given uncharacteristic beneficial tailwinds in the early months of the year. Underlying operating margin increased to 7.1% (2023: 6.1%), the highest for nine years, demonstrating our continued focus on margin improvement over revenue growth. We expect a return to our typical second half weighting for operating profit in 2025 after a particularly strong performance in the first half of 2024. Underlying earnings per share increased by 30% to 199.9p, driven by higher underlying operating profit as well as lower financing costs and a lower Group effective tax rate. Cashflow generation also saw a significant improvement compared to the strong prior year, largely driven by improved profitability and good working capital management, generating increased free cashflow of £192.6m and a significant reduction in net debt (IAS 17 lender covenant basis) to £29.5m (2023: £146.2m). This equated to a year-end net debt/EBITDA ratio of 0.1x (2023: 0.6x), below the lower end of our leverage target range of 0.5x-1.5x.

Operational performance

In North America (NA), revenue increased by 4.2% to £1,785.8m (on a constant currency basis), driven by improved trading in the foundations business. This was partially offset by lower revenue at Suncoast as a result of the anticipated normalised pricing and slow-down in residential housing, and lower volumes at RECON. Underlying operating profit in North America increased by 16.1% to £190.0m, driven by the sustained improvement in operational performance in the foundations business and benefiting from the buoyant market conditions in the year. The increase in profitability saw underlying operating margin in North America increase to 10.6% (2023: 9.6%).

In Europe and the Middle East (EME), revenue increased by 5.5% to £835.1m, reflecting an improved performance in Europe and the completion of a large infrastructure project in Central Europe. Underlying operating profit reduced by 17.7% to £7.9m on a constant currency basis, as a result of an ongoing challenging project in the Middle East and the successful completion of a large contract in the Middle East in the prior year. EME's performance benefitted from the improved project performance in the Nordic region. Underlying operating margin reduced to 0.9% (2023: 1.2%).

In Asia-Pacific (APAC), revenue declined by 2.1% to £365.8m on a constant currency basis, driven by the moderation of trading volume in Australia following a record trading performance in the prior year, and lower volumes at Austral, reflecting management focus on margin over volume. Underlying operating profit increased significantly to £28.7m (2023: £14.6m) driven primarily by the sustained turnaround at Austral that commenced in the second half of 2023.The operating margin for the division increased to 7.8% (2023: 3.8%).

Strategy

In 2024 we continued to execute our strategy to be the preferred international geotechnical specialist contractor focused on sustainable markets and attractive projects, generating long-term value for our stakeholders. Our local businesses leverage the Group's scale and expertise to deliver engineered solutions and operational excellence, driving market share leadership in our selected markets.

Since the strategy was first developed in 2019, we have rationalised the geographic and product portfolio of the Group and more recently focussed on improving the project execution across the business, resulting in a more consistent performance, generating improved margins and higher levels of cash flow that has allowed the Group to de-lever considerably.

 

While macroeconomic conditions may lead to short-term market fluctuations, we have positioned Keller for medium and long-term resilience, enabling us to capitalise on our next phase of growth, both organic and through selective M&A. Strengthened by the Group's improved performance, we are confident that the actions we are taking will drive sustainable value creation for shareholders now and in the future.

Progress on strategic priorities in 2024

In 2024 we continued to rationalise and restructure our business to respond most effectively to our evolving markets and maximise the potential benefits of our strategy. In March 2024 we announced the restructuring of two of our divisions; Europe became Europe and Middle East (EME), and AMEA became Asia-Pacific (APAC). This new structure was successfully implemented in the year.

Within our divisions we have rationalised several business units as we look to achieve further efficiency gains whilst delivering on our strategic objectives. In North America, we combined the North-East business with the West business whilst also rationalising equipment and yard activities in the region. In APAC, we have combined the India business unit with ASEAN as we look to maximise our opportunities in the region, and rationalised an equipment yard in Western Australia. In June 2024 we saw the completion of the sale of our South African business. This consolidation and rationalisation across the Group provides us the opportunity to increase both the effectiveness and efficiency of expertise and key resources, and exemplifies the pursuit of operational leverage and economies of scale which is a key aspect of our strategy.

Progress in the implementation of the enterprise resource planning (ERP) system was delayed in the year due to a necessary change in the strategic implementation partner that is supporting the programme. We expect further carefully managed progress in 2025, with a pilot business unit going live on the system early next year. We have continued to refine our ways of working and our improved Project Performance Management system will also commence rollout in NA in 2025.

Strategic priorities for 2025

We are nearing the conclusion of the periodic strategy review which has confirmed the strength of the Group's ambition. Over the last six months we have tested, externally revalidated and refined the strategy we established in 2019.

Now we have rationalised our portfolio, honed our project execution capability and strengthened our balance sheet, it is the appropriate time to focus on growing market share within our existing geographic footprint, through both organic investment and targeted bolt-on M&A. We will continue to be customer focused locally through our branch structure and obtain the benefit of operational leverage by gaining high quality, leading market shares in our chosen markets. Organic investment will include initiatives to increase the cross selling of existing services into established branches that don't currently provide those services, and investing in our people to build on our technical expertise and influence. The Group's disciplined approach to M&A activity will be focussed on expanding the service offering and building critical mass in key local markets, and will be biased towards markets with higher rates of growth. We continue to evaluate optimal targets at an appropriate value.

 

 

Sustainability and Environmental, Social and Governance (ESG)

As the world's largest geotechnical specialist contractor, we have the responsibility and opportunity to make a difference to our customers and society and to help drive a low-carbon future. We are committed to reducing the carbon intensity of our work and have set out clear targets and action plans for our journey to net zero. We will be net zero across all three emission scopes by 2050: net zero on Scope 2 by 2030, net zero on Scope 1 by 2040 and net zero by 2050 on Operational Scope 3 (covering business travel, material transport and waste disposal). The short, medium and long-term actions required to achieve these goals are in progress and we are on track to meet this year's Scope 2 carbon reduction target.

We continued to focus on safety, as we continually improve our safety culture and performance. In 2024 the Accident Frequency Rate (AFR) halved to 0.05, with a total of 13 lost time incidents reported in the year, a reduction of 13 versus 2023. Of those 13 events, six were classified as critical injuries, an improvement of four less critical injuries year-on-year. Despite achieving industry-leading figures in this area, we recognise the need to continually improve and we will not be satisfied until we eradicate harm in the workplace.

People

In addition to the divisional re-structure announced in March 2024, in June we welcomed Paul Leonard to the role of President North America, a highly experienced industry professional with long tenures in public companies. We have further strengthened our Executive Committee with several new leadership roles that will assist us in driving forward our strategy. Kerry Porritt has been appointed as Keller's first Chief Sustainability Officer, in addition to her responsibilities as Group Company Secretary, where she will drive Keller's sustainability agenda and ensure it continues to build momentum across the Group. Marisa Schleter is promoted to the new role of Chief Communications Officer to foster effective communication across the Group. Brent Byford has been promoted to the new role of Chief Construction Officer.

Board

On 15 May Eva Lindqvist retired from the Board having served seven years as an independent Non-executive Director and five years as the Chair of the Remuneration Committee.

On 1 September Stephen King joined the Board as an independent Non-executive director. Stephen is a member of the Audit and Risk, Nomination and Governance, Remuneration, and Sustainability Committees. Stephen brings a wealth of senior level experience within the industrial, engineering and manufacturing sectors.

On 16 December Carl-Peter Forster joined the Board as a Non-executive Director and Chair designate. Carl-Peter will succeed Peter Hill CBE who announced in July 2024 his intention to step down after approaching nine years as Chairman. Carl-Peter will succeed Peter as Chair on 5 March 2025. As well as his role as Non-executive Director and Chair designate, Carl-Peter was appointed to the Nomination and Governance Committee and will become Chair of that committee on 5 March 2025 when he assumes the role of Chair of the Board. Carl-Peter is Chairman of Vesuvius plc and the Senior Independent Director and Remuneration Committee Chair at Babcock International Group plc.

Growing the dividend

In 2023 the Board rebased the full year dividend to 45.2p, a 20% increase on 2022 in recognition of the step-change in profitability in 2023. In recognition of the excellent performance in 2024 and the Group's future growth prospects, the Board is recommending a final dividend of 33.1p, bringing the total dividend for the year to 49.7p (2023: 45.2p), an increase of 10%. Keller has a notable 31-year history of a maintained or growing dividend with a CAGR of 9% since flotation in 1994 and is one of only a very few FTSE listed companies to have consistently paid a dividend over such a period. The final dividend is payable on 20 June 2025 to shareholders on the register as at the close of business on 23 May 2025.

Share buyback programme

In addition to the increased dividend, given the strength of the Group's balance sheet, Keller announces its intention to launch a multi-year share buyback programme, with an initial tranche of £25m in the first quarter of 2025, part of an ongoing commitment to return capital to shareholders. This action reflects the Board's continued confidence in the future prospects for the Group. Keller will continue to target a through the cycle leverage range of 0.5x to 1.5x net debt / EBITDA, albeit we expect to be below this range during 2025.

 

Outlook

2024 was another outstanding year for Keller, ahead of expectations, delivering improved performance across all key metrics - profits, earnings, margin, return on capital, cash conversion and debt reduction. This performance builds on the positive momentum developed in recent years as a result of the disciplined execution of our strategy. Since the strategy was first launched in 2019, we have rationalised the geographic and product portfolio of the Group and more recently focused on improving the project execution across the business. The result is a more consistent performance, improved operating margins and higher levels of cash flow have allowed the Group to grow earnings and de-lever the balance sheet considerably, and given us the platform to increase the dividend and announce our intention to launch a multi-year share buyback programme, part of an ongoing commitment to return capital to shareholders.

Our record year-end order book of £1.6bn across our diverse revenue streams underpins our expectations for growth in the next phase of implementation of the Group's strategy. Whilst we remain mindful of the uncertain geopolitical and macroeconomic environment in the short-term, we anticipate further progress in 2025 and a return to our typical second half weighting. We have ensured that Keller is set up to be resilient over the medium and longer term and well positioned to capture growth opportunities both organically and through selective M&A. We are strongly encouraged by the sustained improvement in the Group's performance that provides the platform to continue to enhance shareholder value.

 

 

 

Operating review

 

North America

 

	2024	2023	Constant currency
	£m	£m
Revenue	1,785.8	1,770.0	+4.2%
Underlying operating profit	190.0	169.6	+16.1%
Underlying operating margin	10.6%	9.6%	+100bps
Order book	1,130.4	904.6	+23.7%

 

In North America, revenue increased by 4.2% to £1,785.8m (on a constant currency basis), largely driven by an increase in trading in the foundations business. This was partially offset by lower volumes in our Suncoast business, down 19.3%, and lower volumes at RECON, down 29.9% (both on a constant currency basis). Underlying operating profit in North America increased by 16.1% to £190.0m, driven by the sustained improvement in operational performance in the foundations business and benefitting from the buoyant market conditions in the year. The increase in profitability saw underlying operating margin in North America increase to 10.6% (2023: 9.6%). The Accident Frequency Rate, our key safety metric, improved to 0.04 versus the prior period at 0.09, a reduction of six lost time injuries reported in 2024.

 

The improved performance in 2023 has been sustained and built upon and our foundations business had another outstanding year in both the US and Canada. Management actions include the introduction of standard operating procedures, an upgraded project performance review process and a new variation order tracking system. Further efficiencies and improvements have been achieved through the combination of two business units as we continually drive operational performance. An unseasonably strong first quarter and a particularly buoyant market contributed to the strong performance.

 

Suncoast, the Group's post-tension business, reported a decline in revenue reflecting a decreased level of activity as a result of the slowdown in residential housing. Whilst profitability benefitted from better than expected resilience in pricing in the first half of the year, overall profitability for the year was down versus the prior year as pricing normalised in the second half as expected.

 

Moretrench Industrial, our business that operates in the highly regulated environmental remediation market, continued to make good progress in the period, with growth in revenue and profit. At RECON, our geoenvironmental and industrial services company, volumes and profit were lower following the completion of the large LNG contract in the Gulf of Mexico project in the prior year and delays in the period related to the permitting of new LNG projects. In 2025 we expect to commence work on a further LNG contract in the Gulf region.

 

In June 2024, Paul Leonard joined as President North America. Paul is a highly experienced industry professional and a seasoned expert in energy and construction, with a proven track record in project delivery, and is building on the improved operational performance achieved in the division over the last 18 months.

 

North America Outlook

 

The order book for North America at the period end was at £1,130.4m, up 24% (on a constant currency basis) from the closing position at the end of 2023. The increase year-on-year is predominantly driven by continued strong volumes in Foundations and the LNG contract at RECON which is expected to commence in 2025. Following a particularly buoyant market in 2024, we expect the market environment to normalise in 2025. Whilst the improved operational performance in Foundations is expected to be maintained, we expect a more normalised pricing environment in Suncoast.

 

 

Europe and Middle East (EME)¹

 

	2024	2023	Constant currency
	£m	£m
Revenue	835.1	808.0	+5.5%
Underlying operating profit	7.9	9.8	-17.7%
Underlying operating margin	0.9%	1.2%	-30bps
Order book	302.1	397.8	-21.0%

 

 

In Europe and Middle East (EME), revenue increased by 5.5% on a constant currency basis, reflecting an improved performance in Europe and the completion of a large infrastructure project in Central Europe. Underlying operating profit was down 17.7% on a constant currency basis, as a result of an ongoing challenging project in the Middle East and the successful completion of a large contract in the Middle East in the prior year. As a consequence, underlying operating margin reduced slightly to 0.9% (2023: 1.2%). The Accident Frequency Rate reduced from 0.11 to 0.05, with six fewer lost time injuries versus the prior year.

The European businesses reported revenue and underlying operating growth despite challenging market conditions in parts of Europe, which continue to be affected by ongoing weak demand in the residential and commercial sectors. Performance was driven by large projects in the infrastructure sectors, primarily in Central Europe, North-East Europe and the Nordics.

Our North-East Europe business, which comprises Poland and the Baltic countries, improved year-on-year and reported both revenue and underlying operating profit growth, largely driven by a contract relating to CPK, a large government funded project that will include the construction of a new high-speed rail and road network across Poland.

In South-East Europe and Nordics, revenue was down in the year following several large infrastructure projects in the Nordics in the prior year, while underlying operating profit increased due to the turnaround and completion of these projects and a restructured cost base.

In the UK, trading was down versus prior year reflecting the near completion of our contract on High Speed 2 and the continued soft market conditions.  

In Central Europe, revenue and profit increased in the period, driven by work on a large railway tunnel project that was successfully completed in Germany.

South-West Europe delivered growth in both revenue and operating profit, driven by favourable trading conditions in Spain.

In the Middle East, both year-on-year revenue and profit were negatively impacted by the performance of two projects; with the prior year comparative benefitting from the successful completion of a large project whilst the current year was impacted by an ongoing challenging project in the region, where we are currently in discussions with the client to remedy the commercial performance. The rest of the Middle East region including UAE, Bahrain and other Saudi Arabian projects, performed strongly in the year. Underlying operating profit in the Middle East region was down £19.9m versus the prior year (on a constant currency basis).

We completed the exit of our business in South Africa at the end of the first half, which recorded a modest profit in the period prior to sale.

EME Outlook

The EME order book at the end of the period was £302.1m, down 21% versus the prior year on a constant currency basis, with the prior year comparative benefitting from the large infrastructure projects completed in 2024. Notwithstanding this, we expect a significant improvement in overall performance and margins in 2025 as a result of improved project execution and a number of self-help measures.

 

¹EME performance included the South Africa business up until it was sold at the end of the first half of 2024.

 

 

Asia-Pacific (APAC)

 

	2024	2023	Constant currency
	£m	£m
Revenue	365.8	388.0	-2.1%
Underlying operating profit	28.7	14.6	+103.5%
Underlying operating margin	7.8%	3.8%	+400bps
Order book	177.5	186.7	-0.3%

 

 

In APAC, revenues decreased by 2.1% on a constant currency basis, largely due to a strong prior year comparative following record volumes in Keller Australia in 2023. Underlying operating profit increased significantly to £28.7m driven by the turnaround in performance at Austral. Underlying operating profit margin increased significantly to 7.8% (2023: 3.8%). The Accident Frequency Rate reduced from 0.06 to 0.05, a reduction of one lost time injury versus the prior year.

 

Keller Australia delivered a record performance in 2023 and continued to perform well in 2024 driven by continued federal and state government spending, particularly in the infrastructure sector, though this spending eased somewhat as the year progressed. Austral reported a full year of profit, following the return to profit in the second half of 2023, despite a drop in revenue, following a focus on project execution and margin growth.

 

In ASEAN, the market recovery has been slow, although our business showed signs of recovery with growth in revenue and operating profit over the prior year.

 

Keller India performed well, delivering a record profit in the year through successful execution of projects across the industrial, manufacturing, commercial and petrochemical sectors. We continue to see good prospects for the Keller India business in 2025.

 

APAC Outlook

 

The APAC order book at the end of the period was at £177.5m, unchanged (on a constant currency basis) on the prior year. Following a strong recovery in 2024, we expect the APAC Division to deliver another resilient performance and operating margin in 2025.

 

 

 

Chief Financial Officer's review

 

 

This report comments on the key financial aspects of the Group's 2024 results.

 

		2024		2023
		£m		£m
Revenue		2,986.7		2,966.0
Underlying operating profit1		212.6		180.9
Underlying operating profit %1		7.1%		6.1%
Non-underlying items in operating profit		(7.5)		(27.8)
Statutory operating profit		205.1		153.1
Statutory operating profit %		6.9%		5.2%

¹      Details of non-underlying items are set out in note 9 to the consolidated financial statements. Reconciliations to statutory numbers are set out in the adjusted performance measures section.

 

Revenue and underlying operating profit split by geography

 

		Revenue £m		Underlying operating profit2 £m			Underlying operating profit margin2 %
Year ended		2024	2023	2024	2023		2024	2023
Division
North America		1,785.8	1,770.0	190.0	169.6		10.6%	9.6%
EME3		835.1	808.0	7.9	9.8		0.9%	1.2%
APAC3		365.8	388.0	28.7	14.6		7.8%	3.8%
Central		-	-	(14.0)	(13.1)		-	-
Group		2,986.7	2,966.0	212.6	180.9		7.1%	6.1%

²      Details of non-underlying items are set out in note 9 to the consolidated financial statements. Reconciliations to statutory numbers are set out in the adjusted performance measures section.  

 

³      From 1 January 2024 the Middle East and Africa (MEA) business was transferred to the Europe division, creating the Europe and Middle East division, and the remaining Asia-Pacific, Middle East and Africa division became the Asia-Pacific division. The 2023 comparative segmental information has been updated to reflect this change as it is consistent with the information reviewed by the Chief Operating Decision Maker.

 

 

Revenue

 

Group revenue of £2,986.7m (2023: £2,966.0m) was up 1% at actual foreign currency rates and 4% up at constant currency. This was driven by an increase in trading in the North America foundations business and the impact of larger projects in Europe partially offset by a reduction in APAC.

 

In North America, revenue increased by 4.2% on a constant currency basis as foundations volumes offset lower volumes in our Suncoast business, largely as a result of the slowdown in residential housing and lower volumes at RECON. In Europe and the Middle East (EME), revenue increased by 5.5% on a constant currency basis reflecting improved trading volume in Europe and the completion of a large project in the European infrastructure sector. In Asia-Pacific (APAC), revenue reduced by 2.1% on a constant currency basis due to the moderation of trading volume in Australia following a record trading performance in the prior year, and lower volumes at Austral following management focus on margin over volume.

 

We have a diversified spread of revenues across geographies, product lines, market segments and end customers. Customers are generally market specific and, consistent with the prior year, the largest customer represented less than 4% of the Group's revenue. The top 10 customers represent 19% of the Group's revenue (2023: 15%). The Group worked on c.5,500 projects in the year with 48% (2023: 51%) of contracts having a value between £25,000 and £250,000, demonstrating a low customer concentration and a wide project portfolio.

 

Underlying operating profit

 

The underlying operating profit of £212.6m was 18% up on prior year (2023: £180.9m) at actual foreign currency rates and 22% up on a constant currency basis. The underlying operating margin increased to 7.1% (2023: 6.1%). In North America, underlying operating profit increased 16% on a constant currency basis to £190.0m (2023: £169.6m), driven by the sustained improvement in operational performance in the foundations business and benefitting from the buoyant market conditions in the year. The increase in profitability saw underlying operating margin in North America increase to 10.6% (2023: 9.6%). In Europe and the Middle East, underlying operating profit reduced by 18% on a constant currency basis to £7.9m (2023: £9.8m), primarily as a result of project performance at a current challenging project in the Middle East and the completion of a profitable contract in the Middle East in the prior period. Underlying operating margin reduced to 0.9% (2023: 1.2%). In APAC, underlying operating profit increased significantly to £28.7m (2023: £14.6m) driven primarily by the sustained turnaround at Austral that commenced in the second half of 2023. The operating margin for the division increased to 7.8% (2023: 3.8%).

 

Share of post-tax results from joint ventures

 

The Group recognised an underlying post-tax profit of £0.5m in the year (2023: £0.8m) from its share of the post-tax results from joint ventures.

 

The prior year included the share of the post-tax amortisation charge of £0.6m arising from the acquisition of NordPile by our joint venture KFS Oy in 2021 as a non-underlying item. No dividends (2023: nil) were received from joint ventures in the year.

 

Statutory operating profit

 

Statutory operating profit, comprising underlying operating profit of £212.6m (2023: £180.9m) and non-underlying items comprising net costs of £7.5m (2023: £27.8m), increased by 34% to £205.1m (2023: £153.1m). The increase in statutory operating profit is a reflection of the increase in underlying operating profit in 2024, combined with a decrease in non-underlying operating costs. The non-underlying costs are set out in further detail below.

 

Net finance costs

 

Net underlying finance costs decreased by 23% to £21.2m (2023: £27.5m). The decrease was driven predominantly by the decrease in average debt levels through the year, with a higher average cash balance.

 

Following the issuance of $300m of private placement notes in August 2023, the Group's borrowings are now largely at fixed interest rates. The average month-end net debt during 2024, excluding IFRS 16 lease liabilities, was £96.5m (2023: £224.8m).

 

Taxation

 

The Group's underlying effective tax rate decreased to 23% (2023: 25%), largely due to the change in the profit mix of where the Group is subject to tax. As expected, the introduction of the Pillar Two rules with effect from 1 January 2024 did not have a material impact on the Group's effective tax rate.

 

Cash tax paid in the year decreased from £72.7m to £65.6m. The reduction is due to the fact that the tax payments in 2023 included a catch-up payment for 2022 US tax. Further details on tax are set out in note 12 of the consolidated financial statements.

 

 

Non-underlying items

 

The items below have been excluded from the underlying results and further details of non-underlying items are included in note 9 to the financial statements. The total non-underlying items in operating profit in the year decreased to £7.5m (2023: £27.8m), due to the goodwill impairment charge in the prior year and a credit arising this year from a change in the fair value of contingent consideration.

 

 

		2024	2023
		£m	£m
Exceptional restructuring costs		4.3	2.8
ERP implementation costs		4.0	7.5
Claims related to closed business		1.5	-
Loss on disposal of operations		0.8	0.1
Goodwill impairment		-	12.1
Impairment of trade receivables related to restructuring		-	0.4
Amortisation of acquired intangible assets		3.3	5.1
Amortisation of joint venture acquired intangibles		-	0.6
Change in fair value of contingent consideration		(6.4)	-
Gain on sale of assets held for sale		-	(0.8)
Total non-underlying items in operating profit		7.5	27.8
Non-underlying items in finance income		-	-
Total non-underlying items before taxation		7.5	27.8
Non-underlying taxation		(2.7)	(3.0)
Total non-underlying items		4.8	24.8

 

Non-underlying items in operating profit

 

Exceptional restructuring costs of £4.3m (2023: £2.8m) in the year, comprise the cost of a new Group-wide finance transformation project. Finance shared service centres in Poland and Malaysia, serving the EME and APAC divisions respectively, were established and became operational. These shared service centres will ultimately improve efficiency, reduce costs, and provide high-quality support services to the operational businesses. The non-underlying costs for the year include headcount restructuring and one-off set up costs; it does not include the running costs of the shared service centres. In the prior year, restructuring costs of £2.8m related to the scheduled exit of the Kazakhstan business and the costs arising from the mothballing of the Egypt business.

 

The Group is continuing the strategic project to implement a new cloud-based computing enterprise resource planning (ERP) system across the Group. As this is a complex implementation, project costs are expected to be incurred for a further three years. Non-underlying ERP costs of £4.0m (2023: £7.5m) include only costs relating directly to the implementation, including external consultancy costs and the cost of the dedicated implementation team. Non-underlying costs do not include operational post-deployment costs such as licence costs for businesses that have transitioned.

 

Claims related to closed businesses of £1.5m (2023: £nil) reflect increased provisions for customer claims for businesses no longer operating.

 

The Group realised a £0.8m loss on the disposal of the South African business, which completed on 28 June 2024. There is an earnout arrangement on the sale, with a potential maximum further £1.3m sale proceeds dependent on the profitability of the business post-disposal. No receivable for the earnout has been recognised at year end.

 

Goodwill impairment in the prior year of £12.1m related to the UK business. The impairment of trade receivables related to restructuring in the prior year related to the exit from Kazakhstan.

 

The classification of costs as non-underlying is a management judgement and is reviewed on a regular basis.

 

 

 

Amortisation of acquired intangibles

The £3.3m (2023: £5.1m) charge for amortisation of acquired intangible assets relates to the RECON, GKM Consultants, NWF and Moretrench acquisitions.

 

Change in fair value of contingent consideration

Non-underlying other operating income of £6.4m arises from a change in fair value of the contingent consideration related to the non-controlling interest transaction to acquire 35% of Keller Company Limited (our main Saudi Arabian subsidiary) and the acquisitions of GKM Consultants and NWF. The majority of this relates to Keller Company Limited where the earnout is based on revenue earned in Saudi Arabia, which is now expected to be lower given the reduced level of revenue now expected from NEOM.

Non-underlying taxation

A non-underlying tax credit of £2.7m (2023: £3.0m) has been determined by assessing the tax impact of each component of the non-underlying loss, and primarily relates to the tax relief for the finance transformation and ERP projects.

 

Earnings per share

 

Underlying diluted earnings per share increased by 30% to 199.9p (2023: 153.9p) driven by higher operating profit as well as lower finance costs and a lower effective tax rate in the year. Statutory diluted earnings per share was 193.3p (2023: 120.5p) which includes the impact of the non-underlying items.

 

Dividend

 

The Board has recommended a final dividend of 33.1p per share (2023: 31.3p per share) which, following the interim dividend for 2024 of 16.6p (2023: 13.9p), brings the total dividend for the year to 49.7p (2023: 45.2p), an increase of 10%. The 2024 dividend earnings cover, before non-underlying items, was 4.0x (2023: 3.4x). If approved, the proposed 2024 final dividend of 33.1p (2023: 31.3p) will be paid on 20 June 2025 to shareholders on the register as at the close of business on 23 May 2025.

 

Keller Group plc has distributable reserves of £283.7m at 31 December 2024 (2023: £190.8m) that are available to support the dividend policy, which comfortably covers the proposed final dividend for 2024 of £23.6m. Keller Group plc is a non-trading investment company that derives its profits from dividends paid by subsidiary companies. The dividend policy is therefore impacted by the performance of the Group, which is subject to the Group's principal risks and uncertainties as well as the level of headroom on the Group's borrowing facilities and future cash commitments and investment plans.

 

Free cash flow

 

The Group's free cash flow was an inflow of £192.6m (2023: £103.2m); the improvement was driven by improved profitability, good working capital management and higher than usual proceeds from the disposal of property, plant and equipment. The basis of deriving free cash flow is set out below.

 

 

Free cash flow

 

		2024	2023
		£m	£m
Underlying operating profit		212.6	180.9
Depreciation, amortisation and impairment		108.8	112.2
Underlying EBITDA		321.4	293.1
Non-cash items		(13.5)	(4.0)
Decrease in working capital		27.7	2.7
Increase in provisions,retirement benefit and other non-current liabilities		30.9	12.1
Net capital expenditure		(60.0)	(73.6)
Additions to right-of-use assets		(26.4)	(33.9)
Free cash flow before interest and tax		280.1	196.4
Free cash flow before interest and tax to underlying operating profit		132%	109%
Net interest paid		(21.9)	(20.5)
Cash tax paid		(65.6)	(72.7)
Free cash flow		192.6	103.2
Dividends paid to shareholders		(34.6)	(27.7)
Purchase of own shares		(20.1)	(3.4)
Acquisitions		(0.9)	(0.2)
Business disposals		(2.6)	1.3
Transactions with non-controlling interests		-	(6.4)
Non-underlying items		(8.4)	(12.4)
Cash flows from derivative instruments		-	2.0
Right-of-use assets/lease liability modifications		(8.8)	(8.7)
Foreign exchange movements		(6.8)	13.9
Movement in net debt		110.4	61.6
Opening statutory net debt		(237.3)	(298.9)
Closing statutory net debt		(126.9)	(237.3)

 

Working capital

 

Net working capital decreased by £27.7m (2023: decrease of £2.7m) reflecting decreases in all three divisions, and the benefit of some timing differences where cash has been received from customers ahead of revenue recognition. The net movement comprises a £10.4m decrease in inventories and a £71.7m increase in trade and other payables, offset by an increase in trade and other receivables of £54.4m.

 

An increase in provisions, retirement benefit and other non-current liabilities improved the working capital by £30.9m (2023: increase of £12.1m). This reflects an increase in provisions, as the amounts provided for contract and legal disputes exceeded the amounts settled in the year. This excludes the cash outflow on non-underlying restructuring provisions and other items included in non-underlying costs which are presented within non-underlying items in the free cash flow calculation.

 

Capital expenditure

 

The Group manages capital expenditure tightly whilst investing in the upgrade and replacement of equipment where appropriate. Net capital expenditure, excluding leased assets, of £60.0m (2023: £73.6m) was net of proceeds from the sale of equipment of £29.0m (2023: £20.9m). The asset replacement ratio, which is calculated by dividing gross capital expenditure, excluding sales proceeds on disposal of items of property, plant and equipment and those assets capitalised under IFRS 16, by the depreciation charge on owned property, plant and equipment, was 113% (2023: 115%).

 

 

Acquisitions, disposals and transactions with non-controlling interests

 

Acquisition cash outflow of £0.9m reflects payment of contingent consideration, mainly in respect of last year's purchase of the remaining 35% share in our main Saudi Arabian subsidiary. The earnout arrangement extends for a further three years.

 

The business disposal cash outflow of £2.6m relates to the £5.0m disposal of the cash held by the South African subsidiary on the disposal date of 28 June 2024 less the sale proceeds of £2.4m.

 

Financing facilities and net debt

 

Strong cash generation, combined with the refinancing of the Group's £400m revolving credit facility and the year-end borrowing headroom of £447.4m (2023: £425.2m) has significantly improved the resilience of the Group's balance sheet.

 

The Group's total net debt of £126.9m (2023: £237.3m) comprises loans and borrowings of £236.6m (2023: £297.1m), lease liabilities of £98.0m (2023: £91.6m) net of cash and cash equivalents of £207.7m (2023: £151.4m). The Group's term debt and committed facilities principally comprise US private placement notes repayable in August 2030 ($120m) and in August 2033 ($180m). The Group's multi-currency syndicated revolving credit facility was refinanced in the year, increasing the facility from £375m to £400m, with no change in the related covenants. The revolving credit facility is a five-year facility, with the option to extend for two further years, with the agreement of the lenders. It was undrawn at the year end. At the year end, the Group had undrawn committed and uncommitted borrowing facilities totalling £447.4m (2023: £425.2m).

 

The most significant covenants in respect of the main borrowing facilities relate to the ratio of net debt to underlying EBITDA, underlying EBITDA interest cover and the Group's net worth. The covenants are required to be tested at the half year and the year end. The Group operates comfortably within all of its covenant limits. Net debt to underlying EBITDA leverage, calculated excluding the impact of IFRS 16, was 0.1x (2023: 0.6x), well within the covenant limit of 3.0x and below the Group's leverage target of between 0.5x-1.5x. Calculated on a statutory basis, including the impact of IFRS 16, net debt to EBITDA leverage was 0.4x at 31 December 2024 (2023: 0.8x). Underlying EBITDA to net finance charges, excluding the impact of IFRS 16, was 20.2x (2023: 12.3x), well above the limit of 4.0x.

 

On an IFRS 16 basis, year-end gearing, defined as statutory net debt divided by net assets, was 21% (2023: 46%).

 

The average month-end net debt during 2024, excluding IFRS 16 lease liabilities, was £96.5m (2023: £224.8m). The Group had no material discounting or factoring in place during the year. Given the relatively low value and short-term nature of the majority of the Group's projects, the level of advance payments is typically not significant, although we have negotiated advance payments on larger projects.

 

At 31 December 2024 the Group had no drawings under uncommitted overdraft facilities (2023: £2.4m) and had drawn £201.8m of bank guarantee facilities (2023: £199.7m).

 

Retirement benefits

 

The Group has defined benefit pension arrangements in the UK, Germany and Austria.

 

The Group's UK defined benefit scheme is closed to future benefit accrual. The most recent actuarial valuation of the UK scheme was as at 5 April 2023, which recorded the market value of the scheme's assets at £45.2m and the scheme being 98% funded on an ongoing basis. Given the funding level, contributions ceased in August 2024, with a total of £1.7m paid in 2024. Contributions will be reviewed following the next triennial actuarial valuation to be prepared as at 5 April 2026. The 2024 year-end IAS 19 valuation of the UK scheme showed assets of £43.5m, liabilities of £37.2m and a pre-tax surplus of £6.3m before an IFRIC 14 adjustment to reflect the minimum funding requirement for the scheme, which adjusts the closing position to a nil balance.

 

 

In Germany and Austria, the defined benefit arrangements only apply to certain employees who joined the Group before 1997. The IAS 19 valuation of the defined benefit obligation totalled £11.5m at 31 December 2024 (2023: £12.6m). There are no segregated funds to cover these defined benefit obligations and the respective liabilities are included on the Group balance sheet.

 

All other pension arrangements in the Group are of a defined contribution nature.

 

The Group has a number of end of service schemes in the Middle East as required by local laws and regulations. The amount of benefit payable depends on the current salary of the employee and the number of years of service. These retirement obligations are included on the Group's balance sheet and obligations are met as and when required by the Group. The IAS 19 valuation of the defined benefit obligation totalled £3.7m at 31 December 2024 (2023: £3.6m).

 

Currencies

 

The Group is exposed to both translational and, to a lesser extent, transactional foreign currency gains and losses through movements in foreign exchange rates as a result of its global operations. The Group's primary currency exposures are US dollar, Canadian dollar, euro and Australian dollar.

 

As the Group reports in sterling and conducts the majority of its business in other currencies, movements in exchange rates can result in significant currency translation gains or losses. This has an effect on the primary statements and associated balance sheet metrics, such as net debt and working capital.

 

A large proportion of the Group's revenues are matched with corresponding operating costs in the same currency. The impacts of transactional foreign exchange gains or losses are consequently mitigated and are recognised in the period in which they arise.

 

The following exchange rates applied during the current and prior year:

 

	2024			2023
	Closing	Average		Closing	Average
USD	1.25	1.28		1.27	1.24
CAD	1.80	1.75		1.69	1.68
EUR	1.21	1.18		1.15	1.15
AUD	2.02	1.94		1.87	1.87

 

Treasury policies and risk management

 

Currency risk

The Group faces currency risk principally on its net assets, most of which are in currencies other than sterling. The Group aims to reduce the impact that retranslation of these net assets might have on the consolidated balance sheet, by matching the currency of its borrowings, where possible, with the currency of its assets. The majority of the Group's borrowings are held in US dollar.

 

The Group manages its currency flows to minimise transaction exchange risk. Forward contracts and other derivative financial instruments are used to hedge significant individual transactions. The majority of such currency flows within the Group relate to repatriation of profits, intra-Group loan repayments and any foreign currency cash flows associated with acquisitions. The Group's treasury risk management is performed at the Group's head office.

 

The Group does not trade in financial instruments, nor does it engage in speculative derivative transactions.

 

Interest rate risk

Interest rate risk is managed by mixing fixed and floating rate borrowings depending upon the purpose and term of the financing. At 31 December 2024 all of borrowings were fixed rate.

 

 

Credit risk

 

The Group's principal financial assets are trade and other receivables, bank and cash balances and a limited number of investments and derivatives held to hedge certain Group liabilities. These represent the Group's maximum exposure to credit risk in relation to financial assets.

 

The Group recognises impairment losses on trade receivables where there is uncertainty over the amount we can recover from customers. The amount recognised in underlying costs of £12.0m (2023: £21.3m) has decreased on the prior year.

 

The Group has procedures to manage counterparty risk and the assessment of customer credit risk is embedded in the contract tendering processes. The counterparty risk on bank and cash balances is managed by limiting the aggregate amount of exposure to any one institution by reference to its credit rating and by regular review of these ratings.

 

Other Risks

Following the recent change of government in the US, the new government has stated its intention to implement significant policy changes around tariffs, taxation and climate action. The Group is closely monitoring any changes and the potential impact on our business, not only in North America, but also in other potentially impacted regions where we operate. Should any policy changes be implemented, the Group will then take the appropriate actions to mitigate any negative impact of these changes on the business as far as possible.

 

Return on capital employed

 

Return on capital employed is defined at Group level as underlying operating profit divided by the accounting value of equity attributable to equity holders of the parent plus net debt plus retirement benefit liabilities. Return on capital employed in 2024 was 28.2% (2023: 22.8%).

 

 

 

Consolidated income statement

For the year ended 31 December 2024

 

		2024			2023
		Underlying	Non-underlying items (note 9)	Statutory	Underlying	Non-underlying items (note 9)	Statutory
	Note	£m	£m	£m	£m	£m	£m
Revenue	3,4	2,986.7	-	2,986.7	2,966.0	-	2,966.0
Operating costs	6	(2,775.4)	(10.6)	(2,786.0)	(2,769.0)	(22.5)	(2,791.5)
Net impairment loss on trade receivables and contract assets	7	(12.0)	-	(12.0)	(21.3)	(0.4)	(21.7)
Amortisation of acquired intangible assets		-	(3.3)	(3.3)	-	(5.1)	(5.1)
Other operating income	6,9	12.8	6.4	19.2	4.4	0.8	5.2
Share of post-tax results of joint ventures	17	0.5	-	0.5	0.8	(0.6)	0.2
Operating profit/(loss)	3	212.6	(7.5)	205.1	180.9	(27.8)	153.1
Finance income	10	6.6	-	6.6	1.8	-	1.8
Finance costs	11	(27.8)	-	(27.8)	(29.3)	-	(29.3)
Profit/(loss) before taxation		191.4	(7.5)	183.9	153.4	(27.8)	125.6
Taxation	12	(43.9)	2.7	(41.2)	(38.8)	3.0	(35.8)
Profit/(loss) for the year		147.5	(4.8)	142.7	114.6	(24.8)	89.8
Attributable to:
Equity holders of the parent		147.1	(4.8)	142.3	114.2	(24.8)	89.4
Non-controlling interests	34	0.4	-	0.4	0.4	-	0.4
		147.5	(4.8)	142.7	114.6	(24.8)	89.8
Earnings per share
Basic	14	204.0p		197.4p	156.9p		122.8p
Diluted	14	199.9p		193.3p	153.9p		120.5p

 

 

 

 

Consolidated statement of comprehensive income

For the year ended 31 December 2024

 

		2024	2023
	Note	£m	£m
Profit for the year		142.7	89.8
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange movements on translation of foreign operations		(13.0)	(28.3)
Transfer of translation reserve on disposal of subsidiaries		(0.7)	-
Cash flow hedge gain taken to equity		0.1	1.9
Cash flow hedge transfers to income statement		-	(0.2)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit pension schemes	33	0.2	(0.2)
Tax on remeasurements of defined benefit pension schemes	12	(0.1)	(0.1)
Other comprehensive (loss) for the year, net of tax		(13.5)	(26.9)
Total comprehensive income for the year		129.2	62.9
Attributable to:
Equity holders of the parent		128.9	62.7
Non-controlling interests		0.3	0.2
		129.2	62.9

 

 

Consolidated balance sheet

As at 31 December 2024

 

		2024		2023
	Note		£m	£m
Assets
Non-current assets
Goodwill and intangible assets	15		111.2	114.6
Property, plant and equipment	16		461.4	480.2
Investments in joint ventures	17		4.8	4.5
Deferred tax assets	12		61.5	36.8
Other assets	18		88.3	66.8
			727.2	702.9
Current assets
Inventories	19		81.6	93.3
Trade and other receivables	20		759.1	721.8
Current tax assets			5.9	6.3
Cash and cash equivalents	21		207.7	151.4
Assets held for sale	22		9.2	1.6
			1,063.5	974.4
Total assets	3		1,790.7	1,677.3
Liabilities
Current liabilities
Loans and borrowings	26		(27.5)	(86.8)
Current tax liabilities			(33.0)	(35.5)
Trade and other payables	23		(608.7)	(553.6)
Provisions	24		(85.2)	(59.1)
			(754.4)	(735.0)
Non-current liabilities
Loans and borrowings	26		(307.1)	(301.9)
Retirement benefit liabilities	33		(15.2)	(17.7)
Deferred tax liabilities	12		(9.4)	(7.8)
Provisions	24		(89.3)	(73.7)
Other liabilities	25		(18.6)	(23.2)
			(439.6)	(424.3)
Total liabilities	3		(1,194.0)	(1,159.3)
Net assets	3		596.7	518.0
Equity
Share capital	28		7.3	7.3
Share premium account			38.1	38.1
Capital redemption reserve	28		7.6	7.6
Translation reserve			16.2	29.8
Other reserve	28		56.9	56.9
Hedging reserve			1.8	1.7
Retained earnings			465.8	373.9
Equity attributable to equity holders of the parent			593.7	515.3
Non-controlling interests	34		3.0	2.7
Total equity			596.7	518.0

 

These consolidated financial statements were approved by the Board of Directors and authorised for issue on 3 March 2025.

They were signed on its behalf by:

 

Michael Speakman	David Burke
Chief Executive Officer	Chief Financial Officer

 

 

 

Consolidated statement of changes in equity

For the year ended 31 December 2024

 

						Capital						Attributable	Non-
		Share			Share		redemption		Other	Hedging		to equity	controlling
			capital		premium		reserve	Translation	reserve	reserve	Retained	holders of	interests	Total
			(note 28)		account		(note 28)	reserve	(note 28)	(note 26)	earnings	the parent	(note 34)	equity
			£m		£m		£m	£m	£m	£m	£m	£m	£m	£m
At 31 December 2022			7.3		38.1		7.6	57.9	56.9	-	326.7	494.5	2.3	496.8
Profit for the year			-		-		-	-	-	-	89.4	89.4	0.4	89.8
Other comprehensive income
Exchange movements on translation of foreign operations			-		-		-	(28.1)	-	-	-	(28.1)	(0.2)	(28.3)
Cash flow hedge gain taken to equity			-		-		-	-	-	1.9	-	1.9	-	1.9
Cash flow hedge transfers to income statement			-		-		-	-	-	(0.2)	-	(0.2)	-	(0.2)
Remeasurements of defined benefit pension schemes			-		-		-	-	-	-	(0.2)	(0.2)	-	(0.2)
Tax on remeasurements of defined benefit pension schemes			-		-		-	-	-	-	(0.1)	(0.1)	-	(0.1)
Other comprehensive (loss)/ income for the year, net of tax			-		-		-	(28.1)	-	1.7	(0.3)	(26.7)	(0.2)	(26.9)
Total comprehensive (loss)/ income for the year			-		-		-	(28.1)	-	1.7	89.1	62.7	0.2	62.9
Dividends			-		-		-	-	-	-	(27.7)	(27.7)	-	(27.7)
Transactions with non-controlling interests			-		-		-	-	-	-	(15.2)	(15.2)	0.2	(15.0)
Purchase of own shares for ESOP trust			-		-		-	-	-	-	(3.4)	(3.4)	-	(3.4)
Share-based payments			-		-		-	-	-	-	4.4	4.4	-	4.4
At 31 December 2023			7.3		38.1		7.6	29.8	56.9	1.7	373.9	515.3	2.7	518.0
Profit for the year			-		-		-	-	-	-	142.3	142.3	0.4	142.7
Other comprehensive income
Exchange movements on translation of foreign operations			-		-		-	(12.9)	-	-	-	(12.9)	(0.1)	(13.0)
Transfer of translation reserve on disposal of subsidiaries			-		-		-	(0.7)	-	-	-	(0.7)	-	(0.7)
Cash flow hedge gain taken to equity			-		-		-	-	-	0.1	-	0.1	-	0.1
Remeasurements of defined benefit pension schemes			-		-		-	-	-	-	0.2	0.2	-	0.2
Tax on remeasurements of defined benefit pension schemes			-		-		-	-	-	-	(0.1)	(0.1)	-	(0.1)
Other comprehensive (loss)/ income for the year, net of tax			-		-		-	(13.6)	-	0.1	0.1	(13.4)	(0.1)	(13.5)
Total comprehensive (loss)/ income for the year			-		-		-	(13.6)	-	0.1	142.4	128.9	0.3	129.2
Dividends			-		-		-	-	-	-	(34.6)	(34.6)	-	(34.6)
Purchase of own shares for ESOP trust			-		-		-	-	-	-	(20.1)	(20.1)	-	(20.1)
Share-based payments			-		-		-	-	-	-	4.2	4.2	-	4.2
At 31 December 2024			7.3		38.1		7.6	16.2	56.9	1.8	465.8	593.7	3.0	596.7

 

 

 

 

Consolidated cash flow statement

For the year ended 31 December 2024

 

		2024			2023
	Note			£m	£m
Cash flows from operating activities
Profit before taxation				183.9	125.6
Non-underlying items			9	7.5	27.8
Finance income			10	(6.6)	(1.8)
Finance costs			11	27.8	29.3
Underlying operating profit			3	212.6	180.9
Depreciation/impairment of property, plant and equipment			16	108.7	111.8
Amortisation of intangible assets			15	0.1	0.4
Share of underlying post-tax results of joint ventures			17	(0.5)	(0.8)
Profit on sale of property, plant and equipment				(12.8)	(4.4)
Other non-cash movements (including charge for share-based payments)				4.0	3.3
Foreign exchange gains				(4.2)	(2.1)
Operating cash flows before movements in working capital and other underlying items				307.9	289.1
Decrease in inventories				10.4	26.8
(Increase)/decrease in trade and other receivables				(54.4)	1.5
Increase/(decrease) in trade and other payables				71.7	(25.6)
Increase in provisions, retirement benefit and other non-current liabilities				30.9	12.1
Cash generated from operations before non-underlying items				366.5	303.9
Cash outflows from non-underlying items: ERP costs				(4.9)	(7.5)
Cash outflows from non-underlying items: contract disputes				-	(3.7)
Cash outflows from non-underlying items: restructuring costs				(4.9)	(1.2)
Cash inflows from non-underlying items: claims for closed businesses				1.4	-
Cash generated from operations				358.1	291.5
Interest paid				(20.4)	(16.2)
Interest element of lease rental payments				(6.2)	(5.6)
Income tax paid				(65.6)	(72.7)
Net cash inflow from operating activities				265.9	197.0
Cash flows from investing activities
Interest received				5.8	1.8
Proceeds from sale of property, plant and equipment				29.0	20.9
Disposal of businesses			5	(2.6)	1.3
Acquisition of businesses, net of cash acquired			5	(0.9)	(0.2)
Acquisition of property, plant and equipment			16	(89.0)	(94.3)
Acquisition of other intangible assets			15	-	(0.2)
Net cash outflow from investing activities				(57.7)	(70.7)
Cash flows from financing activities
Debt issuance costs				(3.5)	-
Increase in borrowings				-	241.2
Cash flows from derivative instruments				-	2.0
Repayment of borrowings				(59.0)	(245.1)
Payment of lease liabilities				(28.0)	(28.3)
Transactions with non-controlling interest				-	(6.4)
Purchase of own shares for ESOP trust				(20.1)	(3.4)
Dividends paid			13	(34.6)	(27.7)
Net cash outflow from financing activities				(145.2)	(67.7)
Net increase in cash and cash equivalents				63.0	58.6
Cash and cash equivalents at beginning of year				149.0	94.2
Effect of exchange rate movements				(4.3)	(3.8)
Cash and cash equivalents at end of year			21	207.7	149.0

 

 

 

Notes to the consolidated financial statements

1 Corporate information

The consolidated financial statements of Keller Group plc and its subsidiaries (collectively, the 'Group') for the year ended 31 December 2024 were authorised for issue in accordance with the resolution of the Directors on 3 March 2025.

Keller Group plc (the 'company') is a public limited company, incorporated and domiciled in the United Kingdom, whose shares are publicly traded on the London Stock Exchange. The registered office is located at 2 Kingdom Street, London W2 6BD. The Group is principally engaged in the provision of specialist geotechnical services. Information on the Group's structure is provided in note 10 of the company financial statements.

2 Material accounting policy information

Basis of preparation

 

In accordance with the Companies Act 2006, these consolidated financial statements have been prepared and approved by the Directors in accordance with UK adopted international accounting standards. The company prepares its parent company financial statements in accordance with FRS 101.

 

The financial information for the year ended 31 December 2023 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The independent auditors' report on the full financial statements for the year ended 31 December 2023 was unqualified and did not contain an emphasis of matter paragraph or any statement under section 498 of the Companies Act 2006. This announcement does not constitute the Group's full financial statements for the year ended 31 December 2024.

 

The consolidated financial statements have been prepared on an historical cost basis, except for derivative financial instruments that have been measured at fair value. The carrying values of recognised assets and liabilities that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to recognise changes in the fair values attributable to the risks that are being hedged in effective hedge relationships. The consolidated financial statements are presented in pounds sterling and all values are rounded to the nearest hundred thousand, expressed in millions to one decimal point, except when otherwise indicated.

 

Going concern

 

At 31 December 2024, the Group had undrawn committed and uncommitted borrowing facilities totalling £447.4m, comprising the undrawn committed £400m revolving credit facility and undrawn uncommitted borrowing facilities of £47.4m, as well as cash and cash equivalents of £207.7m. At 31 December 2024, the Group's net debt to underlying EBITDA ratio (calculated on an IAS 17 covenant basis) was 0.1x, well within the limit of 3.0x.

 

The Group has prepared a forecast of financial projections for the three-year period to 31 December 2027. The forecast underpins the going concern assessment which has been made for the period through to 31 March 2026, a period of at least 12 months from when the financial statements are authorised for issue and aligning with the period in which the Group's banking covenants are tested. The base case reflects the forecast of financial projections  prepared by the Group for the three-year period to 31 December 2027. The forecast shows significant headroom and supports the position that the Group can operate within its available banking facilities and covenants throughout this period.

 

For the going concern assessment, management ran a series of downside scenarios over the base case forecast to assess covenant headroom against available funding facilities. This process involved constructing scenarios to reflect the Group's current assessment of its principal risks, including those that would threaten its business model, future performance, solvency or liquidity. The principal risks and uncertainties modelled by management align with those disclosed within this Annual Report and Accounts.

 

The following severe but plausible downside assumptions were modelled:

·      rapid downturn in the Group's markets resulting in up to a 10% decline in revenues;

·      ineffective execution of projects reducing profits by 1.5% of revenue;

·      a combination of other principal risks and trading risks materialising together reducing profits by up to £19.9m over the period to 31 March 2026. These risks include changing environmental factors, costs of ethical misconduct and regulatory non-compliance, occurrence of an accident causing serious injury to an employee or member of the public and the cost of a product or solution failure; and

·      deterioration of working capital performance by 5% of six months' sales.

 

The financial and cash effects of these scenarios were modelled individually and in combination. The focus was on the ability to secure or retain future work and potential downward pressure on margins. Management applied sensitivities against projected revenue, margin and working capital metrics reflecting a series of plausible downside scenarios.

 

Even in the most extreme plausible downside scenario incorporating an aggregation of all risks considered, which showed a decrease in operating profit of 21.6% and an increase in net debt of 30.5% against the Group's latest forecast profit and cash flow projections for the review period up to 31 March 2026, the adjusted projections do not show a breach of covenants in respect of available funding facilities or any liquidity shortfall. Management considered the breaking point of the model, which would result in a breach of financial covenants and the reduction in forecast profit and cash flow projections required to achieve this. These outcomes were considered extreme and remote.

 

This process allowed the Board to conclude that the Group will continue to operate on a going concern basis for the period through to the end of March 2026, a period of at least 12 months from when the financial statements are authorised for issue. Accordingly, the consolidated financial statements are prepared on a going concern basis.

 

Climate change

 

In preparing the consolidated financial statements, management has considered the impact of climate change, particularly in the context of the risks identified in the TCFD disclosure. The output from the scenario analysis has been considered, particularly the financial reporting judgements and estimates in respect of the following areas:

•     estimates of future cash flows used in impairment assessments of the carrying value of goodwill;

•     the useful economic life of plant, equipment and other intangible assets; and

•     going concern and viability of the Group over the next three years.

 

Although the scenario analysis identified a risk of stranded assets as a result of increased emission standards, this was in one extreme downside scenario and we have not adjusted the useful economic life of any plant or equipment as a result. Whilst there is currently no change, management are aware of the variable risks arising from climate change and will regularly assess these risks against judgements and estimates made in preparation of the Group's financial statements.

 

Changes in accounting policies and disclosures

 

New and amended standards and interpretations

 

The following applicable amendments became effective for annual periods beginning on or after 1 January 2024:

 

·      Amendments to IFRS 16 'Lease Liability in a Sale and Leaseback'.

·      Amendments to IAS 1 'Classification of Liabilities as Current or Non-Current'.

·      Amendments to IAS 7 'Statement of Cash Flows' & IFRS 7 'Financial Instruments: Disclosures'.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

 

Amendments to IFRS 16 'Lease Liability in a Sale and Leaseback'

 

The amendments in IFRS 16 specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. The amendments had no impact on the Group's financial statements.

 

Amendments to IAS 1 'Classification of Liabilities as Current or Non-Current'

 

The amendments to IAS 1 specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

·      What is meant by a right to defer settlement.

·      That a right to defer must exist at the end of the reporting period.

·      That classification is unaffected by the likelihood that an entity will exercise its deferral right.

·      That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

In addition, an entity is required to disclose when a liability arising from a loan agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants within twelve months. The amendments have resulted in an additional disclosure in Note 26, but have not had an impact on the classification of the Group's liabilities.

 

Amendments to IAS 7 'Statement of Cash Flows' & IFRS 7 'Financial Instruments: Disclosures'

 

The amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity's liabilities, cash flows and exposure to liquidity risk. The amendments had no impact on the Group's financial statements.

 

Basis of consolidation

 

The consolidated financial statements consolidate the accounts of the parent and its subsidiary undertakings to 31 December each year. Subsidiaries are entities controlled by the company. Control exists when the company has power over an entity, exposure to variable returns from its involvement with the entity and the ability to use its power over the entity to affect its returns. Where subsidiary undertakings were acquired or sold during the year, the accounts include the results for the part of the year for which they were subsidiary undertakings using the acquisition method of accounting. Intra-group balances, and any unrealised income and expense arising from intra‑group transactions, are eliminated in preparing the consolidated financial statements.

 

Joint operations

 

Where the Group undertakes contracts jointly with other parties, these are accounted for as joint operations as defined by IFRS 11. In accordance with IFRS 11, the Group accounts for its own share of assets, liabilities, revenues and expenses measured according to the terms of the joint operations agreement.

 

Joint ventures

 

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. The consolidated financial statements incorporate a share of the results, assets and liabilities of joint ventures using the equity method of accounting, whereby the investment is carried at cost plus post-acquisition changes in the share of net assets of the joint venture, less any provision for impairment. Losses in excess of the consolidated interest in joint ventures are not recognised except where the Group has a constructive commitment to make good those losses. The results of joint ventures acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

 

Summary of material accounting policy information

 

Foreign currencies

 

The Group's consolidated financial statements are presented in pounds sterling, which is also the parent company's functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

 

Transactions and balances

 

Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

 

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in the consolidated income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

 

Group companies

On consolidation, the assets and liabilities of foreign operations are translated into pounds sterling at the rate of exchange prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange movements arising on translation for consolidation are recognised in other comprehensive income (OCI). On disposal of a foreign operation, the component of the translation reserve relating to that particular foreign operation is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation.

The exchange rates used in respect of principal currencies are:

Average rates	2024		2023
US dollar	1.28		1.24
Canadian dollar	1.75		1.68
Euro	1.18		1.15
Singapore dollar	1.71		1.67
Australian dollar	1.94		1.87

 

Year-end rates	2024		2023
US dollar	1.25		1.27
Canadian dollar	1.80		1.69
Euro	1.21		1.15
Singapore dollar	1.71		1.68
Australian dollar	2.02		1.87

Revenue from construction contracts

The Group's operations involve the provision of specialist geotechnical services. The majority of the Group's revenue is derived from construction contracts. Typically, the Group's construction contracts consist of one performance obligation; however, for certain contracts (for example where contracts involve separate phases or products that are not highly interrelated) multiple performance obligations exist. Where multiple performance obligations exist, total revenue is allocated to performance obligations based on the relative standalone selling prices of each performance obligation.

For each contract, revenue is the amount that is expected to be received from the customer. Revenue is typically invoiced in stages during the contracts, however smaller contracts are usually invoiced on completion. Variable consideration and contract modifications are assessed on a contract-by-contract basis, according to the terms, facts and circumstances of the project. Variable consideration is recognised only to the extent that it is highly probable that there will not be a significant reversal.

The effects of contract modifications, including claims to customers, are recognised only when the Group considers there is an enforceable right to consideration, therefore no revenue is recognised until this point. Operating expenses in relation to customer modifications are recognised as incurred. Factors indicating an enforceable right to consideration will vary from country to country but usually includes written confirmation from the customer..

Revenue attributed to each performance obligation is recognised based on either the input or the output method. The output method is the Group's default revenue recognition approach. The input method is generally used for longer-term, more complex contracts. These methods best reflect the transfer of benefits to the customer.

●         Output method: revenue is recognised on the direct measurement of progress based on output, such as units of production relative to the total number of contracted production units.

●         Input method: revenue is recognised on the percentage of completion with reference to cost. The percentage of completion is calculated based on the costs incurred to date as a percentage of the total costs expected to satisfy the performance obligation. Estimates of revenues, costs or extent of progress towards completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in the percentage of completion calculation in the period in which the circumstances that give rise to the revision become known.

Where the Group becomes aware that a loss may arise on a contract, and that loss is probable, full provision is made in the consolidated balance sheet based on the estimated unavoidable costs of meeting the obligations of the contract, where these exceed the economic benefits expected to be received. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.

Incremental bid/tender costs and fulfilment costs are not material to the overall contract and are expensed as incurred.

 

Any revenues recognised in excess of billings are recognised as contract assets within trade and other receivables. Any payments received in excess of revenue recognised are recognised as contract liabilities within trade and other payables.

 

Revenue from the sale of goods and services

The Group's revenue recognised from the sale of goods and services primarily relates to certain parts of the North America business. These contracts typically have a single performance obligation, or a series of distinct performance obligations that are substantially the same. There are typically two types of contract:

●         Delivery of goods: revenue for such contracts is recognised at a point in time, on delivery of the goods to the customer.

●         Delivery of goods with installation and/or post-delivery services: revenue for these contracts is recognised at a point in time by reference to the date on which the goods are installed and/or accepted by the customer.

Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated income statement.

The Group provides for future liabilities in respect of uncertain tax positions where additional tax may become payable in future periods. Such provisions are based on management's best judgement of the probability of the outcome in reaching agreement with the relevant tax authorities. For further information refer to note 12.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax is recognised on temporary differences in line with IAS 12 'Income Taxes'. Deferred tax assets are recognised when it is considered likely that they will be utilised against future taxable profits or deferred tax liabilities.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity or to OCI, in which case the related deferred tax is also dealt with in equity or in OCI.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Interest income and expense

All interest income and expense is recognised in the income statement on an accruals basis, using the effective interest method.

Employee benefit costs

The Group operates a number of defined benefit pension schemes, and also makes payments into defined contribution schemes.

The liability in respect of defined benefit schemes is the present value of the defined benefit obligations at the balance sheet date, calculated using the projected unit credit method, less the fair value of the schemes' assets where applicable. The Group recognises the administration costs, current service cost and interest on scheme net liabilities in the income statement, and remeasurements of defined benefit plans in OCI in full in the period in which they occur. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. Where there is no legal right to a refund from the plan, the liability is calculated as the minimum funding requirement to the plan that exists at the balance sheet date.

The Group also has long service arrangements in certain overseas countries. These are accounted for in accordance with IAS 19 'Employee Benefits' and accounting follows the same principles as for a defined benefit scheme.

Payments to defined contribution schemes are accounted for on an accruals basis.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Further details are set out in note 16 for impairments recognised in the year. Subsequent expenditure on property, plant and equipment is capitalised when it enhances or improves the condition of the item of property, plant and equipment beyond its original assessed standard of performance. Maintenance expenditure is expensed as incurred.

 

Depreciation

 

Depreciation is provided to write off the cost less the estimated residual value of property, plant and equipment using the straight-line method by reference to their estimated useful lives as follows:

 

Buildings	50 years
Plant and equipment	3 to 12 years
Motor vehicles	4 years
Computers	3 years

Depreciation is not provided for on freehold land.

An item of property, plant and equipment is derecognised upon disposal (i.e. at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted where appropriate.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets (less than £3,000). The Group recognises lease liabilities to make payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and estimated useful lives as follows:

Land and buildings	3 to 15 years
Plant and equipment	2 to 8 years
Motor vehicles	3 to 5 years

Right-of-use assets are tested for impairment in accordance with IAS 36 'Impairment of Assets'.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date, if the interest rate implicit in the lease is not readily determinable. The incremental borrowing rate applied to each lease is determined by considering the risk-free rate of the country where the asset under lease is located, matched to the term of the lease and adjusted for factors such as the credit risk profile of the lessee. Incremental borrowing rates applied to individual leases range from 1.85% to 15.2%.

After the commencement date, the amount of lease liabilities is increased to reflect the addition of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Group's lease liabilities are included in interest-bearing loans and borrowings. Refer to note 26 for details.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of plant, machinery and vehicles (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low asset value (below £3,000). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

 

Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at the fair value at the acquisition date. Acquisition-related costs are expensed as incurred and included in administrative expenses. Identifiable assets acquired, and liabilities and contingent liabilities assumed, in a business combination are measured initially at their fair values at the acquisition date. The excess of cost of an acquisition over the fair value of the Group's share of the identifiable net assets acquired, including assets identified as intangibles on acquisition, is recorded as goodwill.

The results of subsidiaries which have been disposed are included up to the effective date of disposal.

Goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually and whenever there is an indication that the goodwill may be impaired in accordance with IAS 36, any impairment losses are recognised immediately in the income statement. Goodwill arising prior to 1 January 1998 was taken directly to equity in the year in which it arose. Such goodwill has not been reinstated on the balance sheet. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU retained.

 

Other intangible assets

Intangible assets, other than goodwill, include purchased licences, software (including internally generated software), customer relationships, customer contracts and trade names. Intangible assets are capitalised at cost and amortised on a straight-line basis over their useful economic lives from the date that they are available for use and are stated at cost less accumulated amortisation and impairment losses. The estimated useful economic lives are as follows:

Licences	1 to 4 years
Software	3 to 7 years
Patents	2 to 7 years
Customer relationships	5 to 7 years
Customer contracts	1 to 2 years
Trade names	5 to 7 years

 

 

 

Software-as-a-service arrangements

The Group's current SaaS arrangements are arrangements in which the Group does not control the underlying software used in the arrangement.

Software development costs incurred to configure or customise application software provided under a cloud computing arrangement and associated fees are recognised as operating expenses as and when the services are received where the costs represent a distinct service provided to the Group.

When such costs incurred do not provide a distinct service, the costs are recognised as expenses over the duration of the SaaS contract. The Group capitalises other software costs when the requirements of IAS 38 'Intangible Assets' are satisfied, including configuration and customisation costs which are distinct and within the control of the Group. Such software costs are capitalised and carried at cost less any accumulated amortisation and impairment, and amortised on a straight-line basis over the period which the developed software is expected to be used.

Amortisation commences when the development is complete and the asset is available for use and is included in the operating costs item of the consolidated income statement. The amortisation is reviewed at least at the end of each reporting period and any changes are treated as changes in accounting estimates.

Impairment of assets excluding goodwill

The carrying values of property, plant and equipment, right-of-use assets and other intangibles are reviewed for impairment when events or changes in circumstances indicate the carrying value may be impaired. If any such indication exists, the recoverable amount, being the lower of their carrying amount and fair value less costs to sell, of the asset is estimated in order to determine the extent of impairment loss.

Capital work in progress

Capital work in progress represents expenditure on property, plant and equipment in the course of construction. Transfers are made to other property, plant and equipment categories when the assets are available for use.

 

Inventories

 

Inventories are measured at the lower of cost and estimated net realisable value with allowance made for obsolete or slow-moving items.

Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Write-downs to net realisable value are made for slow-moving, damaged or obsolete items based on evaluations made at the local level by reference to frequency of stock turnover or specific factors affecting the items concerned.

Assets held for sale

Assets are classified as held for sale if their carrying amount will be recovered by sale rather than by continuing use in the business. Assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell, with reference to comparable market transactions. Assets that are classified as held for sale are not depreciated.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. The principal financial assets and liabilities of the Group are as follows:

(a) Trade receivables and trade payables

Trade receivables are initially recorded at fair value and subsequently measured at cost and reduced by allowances for estimated irrecoverable amounts.

Trade receivables and contract assets are stated net of expected credit losses (ECLs). At each reporting date, the Group evaluates the estimated recoverability of trade receivables and contract assets and records allowances for ECLs based on experience.

The Group applies the simplified approach to measurement of ECLs in respect of trade receivables, which requires expected lifetime losses to be recognised from initial recognition of the receivable.  Immediately after an individual trade receivable or contract asset is assessed to be unlikely to be recovered, an impairment is recognised as the difference between the carrying amount of the receivable and the present value of estimated future cash flows. Customer specific factors are considered when identifying impairments, which can include the geographic location and credit rating of a customer.

Where there are no specific concerns over recovery, other than the increasing age of a trade receivable or contract asset balance past payment terms, the Group uses a provision matrix, where provision rates are based on days past due. The provision matrix used reflects estimates based on past experience, current economic factors and consideration of forward looking estimates of economic conditions. Generally, trade receivables are written-off completely if past due for more than 180 days. Default is defined as the point where there is no further legal address available for the Group to recover the receivable amount.

The information about the ECLs on the Group's trade receivables and contract assets is disclosed in note 20.

Trade payables that are not interest bearing are initially recognised at fair value and carried at amortised cost.

(b) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposits with a maturity of three months or less. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management. Bank overdrafts are included within financial liabilities in current liabilities in the balance sheet.

(c) Bank and other borrowings

Interest-bearing bank and other borrowings are recorded at the fair value of the proceeds received, net of direct issue costs. Subsequent to initial recognition, borrowings are stated at amortised cost, where applicable.

Bank or other borrowings are derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated income statement.

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, ie to realise the assets and settle the liabilities simultaneously.

 

(d) Derivative financial instruments and hedge accounting

 

The Group uses derivative financial instruments to manage interest rate risk and to hedge fluctuations in foreign currencies in accordance with its risk management policy. In cases where these derivative instruments are significant, hedge accounting is applied as described below. The Group does not use derivative financial instruments for speculative purposes.

Derivatives are initially recognised in the balance sheet at fair value on the date the derivative contract is entered into and are subsequently remeasured at reporting periods to their fair values. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Changes in the fair value of the effective portion of derivatives that are designated and qualify as cash flow hedges are recognised in other comprehensive income (OCI). Changes in the fair value of the ineffective portion of cash flow hedges are recognised in the income statement. Amounts originally recognised in OCI are transferred to the income statement when the underlying transaction occurs or if the transaction results in the recognition of a non-financial asset or liability, the amount accumulated in equity is included in the initial cost or carrying amount of the hedged asset or liability.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in OCI is retained in equity until the hedged transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in OCI is transferred to the income statement in the period.

For the purpose of hedge accounting, hedges are classified as:

●         Cash flow hedges when hedging the exposure or variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable transaction.

●         Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability.

●         Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

●         There is 'an economic relationship' between the hedged item and the hedging instrument.

●         The effect of credit risk does not 'dominate the value changes' that result from that economic relationship.

●         The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

 

 

Provisions

Provisions have been made for employee-related liabilities, restructuring commitments, onerous contracts, insured liabilities and legal claims, and other property-related commitments. These are recognised as management's best estimate of the expenditure required to settle the Group's liability at the reporting date.

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event and where it is probable that an outflow will be required to settle the obligation and the amount of the obligation can be estimated reliably. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to unwinding the discount is recognised as a finance cost. Details of provisions are set out in note 24.

Provisions for insured liabilities and legal claims include the full estimated value of the liability. Any related insurance reimbursement asset that is virtually certain to be received is separately presented gross within trade and other receivables or other non-current assets on the consolidated balance sheet.

Contingent liabilities

Contingent liabilities are possible obligations of the Group of which the timing and amount are subject to significant uncertainty. Contingent liabilities are not recognised in the consolidated balance sheet, unless they are assumed by the Group as part of a business combination. They are however disclosed, unless they are considered to be remote. If a contingent liability becomes probable and the amount can be reliably measured it is no longer treated as contingent and recognised as a liability on the balance sheet.

 

Contingent assets

 

Contingent assets are possible assets of the Group of which the timing and amount are subject to significant uncertainty. Contingent assets are not recognised in the consolidated balance sheet. They are however disclosed, when  they are considered to be probable. A contingent asset is recognised in the financial statements when the inflow of economic benefits is virtually certain.

Share-based payments

The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards, the fair value of the employee services received in exchange for the grant of share options is recognised as an expense, calculated using appropriate option pricing models. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions, with a corresponding increase in retained earnings. The charge is adjusted to reflect expected actual levels of options vesting due to non-market conditions.

Shares purchased and held in trust in connection with the Group's share schemes are deducted from retained earnings. No gain or loss is recognised within the income statement on the market value of these shares compared with the original cost.

Segmental reporting

 

During the year the Group comprised three geographical divisions which have only one major product or service: specialist geotechnical services. North America; Europe and Middle East; and Asia-Pacific, continue to be managed as separate geographical divisions. This is reflected in the Group's management structure and in the segment information reviewed by the Chief Operating Decision Maker.

Dividends

Interim dividends are recorded in the Group's consolidated financial statements when paid. Final dividends are recorded in the Group's consolidated financial statements in the period in which they receive shareholder approval.

Non-underlying items

Non-underlying items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the Group. They are items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired intangibles, goodwill impairment, restructuring costs and other non-trading amounts, including those relating to acquisitions and disposals. Tax arising on these items, including movement in deferred tax assets arising from non-underlying provisions, is also classified as a non-underlying item.

Significant accounting judgements, estimates and assumptions

The preparation of the Group's consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies, reported amounts of assets and liabilities, revenue and expenses and the accompanying disclosures, and the disclosure of contingent liabilities. The estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Actual results may also differ from these estimates.

The estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that and prior periods, or in the period of the revision and future periods if the revision affects both current and future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Construction contracts

The Group's approach to key estimates and judgements relating to construction contracts is set out in the revenue recognition policy. In the Group consolidated balance sheet this impacts contract assets, contract liabilities and contract provisions (refer to notes 4 and 24).

As described in the policy the default revenue recognition approach is the output method. When revenue is recognised based on the output method, there is little judgement involved in accounting for construction contracts as the amount of revenue that has not been certified/accepted by the client is typically small and is usually based on volumes achieved at agreed rates. These contracts can still be subject to claims and variations resulting in an adjustment to the revenue recognised.

 

When revenue is recognised based on the input (cost) method, the main factors considered when making estimates and judgements include the cost of the work required to complete the contract in order to estimate the percentage completion, and the outcome of claims raised against the Group by customers or third parties. The Group performed around 5,500 contracts during 2024, at an average revenue of approximately £540,000 and a typical range of between £25,000 and £10m in value. The majority of contracts were completed in the year and therefore there are no estimates involved in accounting for these. For contracts that are not complete at year end and revenue is recognised on the input method, the Group estimates the total costs to complete in order to measure progress and therefore how much revenue to recognise, which may impact the contract asset or liability recorded in the balance sheet. The actual total costs incurred on these contracts will differ from the estimate at 31 December and it is reasonably possible that outcomes on these contracts within the next year could be materially different in aggregate to those estimated.

 

Total contract assets are £119.2m and contract liabilities are £115.2m at 31 December 2024.

 

However, due to the level of uncertainty and timing across a large portfolio of contracts, which will be at different stages of their contract life, it is not practical to provide a quantitative analysis of the aggregated judgements that are applied at a portfolio level. The estimated costs to complete are management's best estimate at this point in time and no individual estimate or judgement is expected to have a materially different outcome.

In the case of loss-making contracts, a full provision is made based on the estimated unavoidable costs of meeting the obligations of the contract, where these exceed the economic benefits expected to be received. The process for estimating the total cost to complete is the same as for in progress profitable contracts, and will include management's best estimate of all labour, equipment and materials costs required to complete the contracted work. All cost to complete estimates involve judgement over the likely future cost of labour, equipment and materials and the impact of inflation is included if material. The amount included within provisions in respect of contract provisions is £66.3m (2023: £41.2m), this includes other contract related provisions as well as onerous contract provisions.

As stated in the revenue recognition accounting policy, variable consideration is assessed on a contract-by-contract basis, according to the terms, facts and circumstances of the project. Variable consideration is recognised only to the extent that it is highly probable that there will not be a significant reversal; management judgement is required in order to determine when variable consideration is highly probable. Uncertainty over whether a project will be completed or not can mean that it is appropriate to treat the contracted revenue as variable consideration.

Non-underlying items

Non-underlying items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the Group. They are items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired intangibles, goodwill impairment, restructuring costs and other non-trading amounts, including those relating to acquisitions and disposals. Tax arising on these items, including movement in deferred tax assets arising from non-underlying provisions, is also classified as a non-underlying item.

The Group exercises judgement in assessing whether restructuring items and the ERP implementation costs should be classified as non-underlying.  This assessment covers the nature of the item, cause of the occurrence and scale of impact of that item on the reported performance. Typically, management will categorise restructuring costs incurred to exit a specific geography as non-underlying, in addition restructuring programmes which are incremental to normal operations undertaken to add value to the business are included in non-underlying items. The value of exceptional restructuring costs in 2024 (£4.3m) is higher than in 2023 (£2.8m), due to the impact of the finance transformation project in the year. ERP implementation costs are categorised as non-underlying due to the scale and length of the project. The nature of the project and costs incurred are reviewed on a regular basis to assess the appropriateness of the classification as a non-underlying cost.

Carrying value of goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy set out above. Impairment exists when the carrying value of an asset or cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value-in-use. The fair value less costs of disposal calculation is based on available market data for transactions conducted at arm's length, for similar assets or observable market prices less incremental costs of disposing of the asset. The Group estimates the recoverable amount based on value-in-use calculations. The value-in-use calculation is based on a discounted cash flow (DCF) model. The cash flows are derived from the relevant budget and forecasts for the next three years, including a terminal value assumption. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows, growth rates and maintainable earnings assumed within the calculation.

In 2024, management noted sensitivity in the headroom available for Keller Canada and Keller Norway. The DCF for each CGU is sensitive to the future successful execution of  business plans to consistently meet forecasted margins (which assumes an improvement in operating performance compared with 2024) by improving project delivery and revenue growth. Refer to note 15 for further information.

Deferred tax assets

Deferred tax assets are recognised for unused tax losses and other timing differences to the extent that it is probable that future taxable profits will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits (based on the same Board-approved information to support the going concern and goodwill impairment assessments). The Group uses judgement in assessing the recoverability of deferred tax assets, for which the significant assumption is forecast taxable profits. A 10% shortfall in expected profits would have a proportional impact on the value of the deferred tax assets recoverable. Deferred tax assets recognised on unused tax losses were £13.1m at 31 December 2024 (2023: £10.7m). Refer to note 12 for further information.

Insurance and legal provisions

The recognition of provisions for insurance and legal disputes is subject to a significant degree of estimation. In making its estimates, management seek specialist input from legal advisers and the Group's insurance claims handler to estimate the most likely legal outcome. Provisions are reviewed regularly and amounts updated where necessary to reflect developments in the disputes. The ultimate liability may differ from the amount provided depending on the outcome of court proceedings and settlement negotiations or if investigations bring to light new facts. Refer to note 24 for further information.

 

 

3 Segmental analysis

During the year the Group was managed as three geographical divisions and has only one major product or service: specialist geotechnical services.

This is reflected in the Group's management structure and in the segment information reviewed by the Chief Operating Decision Maker.

	2024		20231
	Revenue	Operating  profit	Revenue	Operating  profit
	£m	£m	£m	£m
North America	1,785.8	190.0	1,770.0	169.6
Europe and Middle East	835.1	7.9	808.0	9.8
Asia-Pacific	365.8	28.7	388.0	14.6
	2,986.7	226.6	2,966.0	194.0
Central items	-	(14.0)	-	(13.1)
Underlying	2,986.7	212.6	2,966.0	180.9
Non-underlying items (note 9)	-	(7.5)	-	(27.8)
	2,986.7	205.1	2,966.0	153.1

 

	2024
					Depreciation3	Tangible4 and
	Segment	Segment	Capital	Capital	and	intangible
	assets	liabilities	employed	additions	amortisation	assets
	£m	£m	£m	£m	£m	£m
North America	974.7	(357.7)	617.0	46.3	56.8	348.3
Europe and Middle East	380.4	(282.8)	97.6	28.2	36.2	151.8
Asia-Pacific	153.0	(100.5)	52.5	13.9	13.7	68.4
	1,508.1	(741.0)	767.1	88.4	106.7	568.5
Central items2	282.6	(453.0)	(170.4)	-	2.1	4.1
	1,790.7	(1,194.0)	596.7	88.4	108.8	572.6
	20231
					Depreciation3	Tangible4  and
	Segment	Segment	Capital	Capital	and	intangible
	assets	liabilities	employed	additions	amortisation	assets
	£m	£m	£m	£m	£m	£m
North America	929.9	(302.9)	627.0	42.1	56.5	347.3
Europe and Middle East	390.6	(271.3)	119.3	36.2	40.5	169.2
Asia-Pacific	162.3	(91.0)	71.3	16.2	14.1	77.5
	1,482.8	(665.2)	817.6	94.5	111.1	594.0
Central items2	194.5	(494.1)	(299.6)	-	1.1	0.8
	1,677.3	(1,159.3)	518.0	94.5	112.2	594.8

 

1        From 1 January 2024, the Middle East and Africa (MEA) business was transferred to the Europe division, creating the Europe and Middle East Division, and the remaining Asia-Pacific, Middle East and Africa Division became the Asia-Pacific Division. The 2023 comparative segmental information has been updated to reflect this change as it is consistent with the information reviewed by the Chief Operating Decision Maker.

2        Central items include net debt and tax balances, which are managed by the Group.

3        Depreciation and amortisation excludes amortisation of acquired intangible assets.

4        Tangible and intangible assets comprise goodwill, intangible assets and property, plant and equipment.

 

 

Revenue analysed by country:

	2024		2023
	£m		£m
United States	1,612.5		1,644.0
Australia	246.4		279.4
Canada	171.7		125.2
Germany	168.9		146.3
Poland	101.3		88.4
United Kingdom	97.5		125.1
Other	588.4		557.6
	2,986.7		2,966.0

 

Non-current assets¹ analysed by country:

	2024		2023
	£m		£m
United States	349.0		342.6
Australia	52.9		62.3
Germany	51.4		52.4
Canada	37.5		44.5
Austria	30.0		33.2
Other	144.9		131.1
	665.7		666.1

1       Excluding deferred tax assets

 

 

4 Revenue

The Group's revenue is derived from contracts with customers. In the following table, revenue is disaggregated by primary geographical market, being the Group's operating segments (see note 3) and timing of revenue recognition:

	2024				2023
	Revenue	Revenue			Revenue	Revenue
	recognised	recognised			recognised	recognised
	on	on			on	on
	performance	performance			performance	performance
	obligations	obligations			obligations	obligations
	satisfied over	satisfied at a	Total		satisfied over	satisfied at a	Total
	time	point in time	revenue		time	point in time	revenue
	£m	£m	£m		£m	£m	£m
North America	1,457.5	328.3	1,785.8		1,355.0	415.0	1,770.0
Europe and Middle East	835.1	-	835.1		808.0	-	808.0
Asia-Pacific	365.8	-	365.8		388.0	-	388.0
	2,658.4	328.3	2,986.7		2,551.0	415.0	2,966.0

 

Some of the 2023 comparative information in this note has been changed to reflect the changes in the Group's segments as explained in note 3.

 

The final contract value will not always have been agreed at the year end. The contract value, and therefore revenue allocated to a performance obligation, may change subsequent to the year end as variations and claims are agreed with the customer. The amount of revenue recognised in 2024 from performance obligations satisfied in previous periods is £24.9m (2023: £12.4m).

The Group's order book comprises the unexecuted elements of orders on contracts that have been awarded. Where a contract is subject to variations, only secured variations are included in the reported order book. As at 31 December 2024, the total order book is £1,610.0m (2023: £1,489.1m).

The order book for contracts with a total duration over one year is £578.3m (2023: £462.5m). Revenue on these contracts is expected to be recognised as follows:

	2024		2023
	£m		£m
Less than one year	421.9		363.4
One to two years	130.5		93.3
More than two years	25.9		5.8
	578.3		462.5

 

 

The following table provides information about trade receivables, contract assets and contract liabilities arising from contracts with customers:

 

	2024		2023
	£m		£m
Trade receivables	575.1		583.1
Contract assets	119.2		90.9
Contract liabilities	(115.2)		(90.9)

 

Trade receivables include invoiced amounts for retentions, which are balances typically payable at the end of a construction project, when all contractual performance obligations have been met, and are therefore received over a longer period of time. Included in the trade receivables balance is £137.7m (2023: £156.9m) in respect of retentions anticipated to be receivable within one year. Included in non-current other assets is £33.7m (2023: £22.7m) anticipated to be receivable in more than one year. All contract assets and liabilities are current.

Significant changes in the contract assets and liabilities during the year are as follows:

	2024		2023
	Contract assets	Contract liabilities	Contract assets	Contract liabilities
	£m	£m	£m	£m
As at 1 January	90.9	(90.9)	105.3	(85.6)
Revenue recognised in the current year	1,091.3	930.8	985.8	1,015.8
Disposed with businesses	(1.3)	0.9	(0.8)	-
Amounts transferred to trade receivables	(1,059.9)	-	(995.3)	-
Cash received/invoices raised for performance obligations not yet satisfied	-	(956.8)	-	(1,025.2)
Exchange movements	(1.8)	0.8	(4.1)	4.1
As at 31 December	119.2	(115.2)	90.9	(90.9)

 

 

 

5 Acquisitions and disposals

Acquisitions

 

There were no material acquisitions during the year to 31 December 2024 or during the year to 31 December 2023.

 

Disposals

 

Current year

 

On 28 June 2024, the Group disposed of its South African operation, being 100% of the issued share capital of Keller Geotechnics SA (Pty) Ltd, for a cash consideration received of £2.4m (ZAR56m). A non-underlying loss on disposal of £0.8m (ZAR19m) was recognised. The business disposal cash outflow of £2.6m relates to the £5.0m disposal of the cash held by the South African subsidiary on the disposal date of 28 June 2024 less the sale proceeds of £2.4m.

 

Prior year

 

On 10 November 2023, the Group disposed of its Cyntech Tanks operation in Canada, a part of Cyntech Construction Ltd, for a total consideration of £1.5m (CAD$2.6m), consisting of the sale price of £1.3m (CAD$2.2m) and further sale price adjustments to be paid from the Escrow amount of £0.2m (CAD$0.4m). A non-underlying loss on disposal of £0.1m (CAD$0.2m) was recognised.

 

 

Underlying other operating income relates to profit on sale of property, plant and equipment of £12.8m (2023: £4.4m). Non-underlying other operating income is discussed in note 9.

 

 

6 Operating costs		2024		2023
	Note	£m		£m
Raw materials and consumables		834.7		954.0
Staff costs	8	790.1		739.7
Other operating charges		839.6		779.0
Amortisation of intangible assets	15	0.1		0.4
Expenses relating to short-term leases and leases of low-value assets		202.2		184.7
Depreciation:
Owned property, plant and equipment	16a	78.8		81.8
Right-of-use assets	16b	29.9		29.4
Underlying operating costs		2,775.4		2,769.0
Non-underlying items	9	10.6		22.5
Statutory operating costs		2,786.0		2,791.5
Other operating charges include:
Fees payable to the company's auditor for the audit of the company's Annual Report and Accounts		1.5		1.4
Fees payable to the company's auditor for other services:
The audit of the company's subsidiaries, pursuant to legislation		2.1		2.1
Other assurance services		0.1		0.1

 

 

7 Net impairment loss on trade receivables and contract assets

 

The net impairment loss on trade receivables and contract assets is made up of movements in the allowance for expected credit losses of trade receivables and contract assets as follows:

	2024		2023
	£m		£m
Additional provisions	21.0		29.4
Unused amounts reversed	(9.0)		(7.7)
Net impairment loss	12.0		21.7

 

Further information on the Group's allowance for expected credit losses of trade receivables and contract assets and on the Group's expected credit loss rates for the 2023 and 2024 financial years can be found in note 20 Trade and other receivables.

 

 

8 Employees

The aggregate staff costs of the Group were:

	2024		2023
	£m		£m
Wages and salaries	697.4		643.5
Social security costs	71.0		66.2
Other pension costs	17.5		25.6
Share-based payments	4.2		4.4
	790.1		739.7

 

These costs include Directors' remuneration. Fees payable to Non-executive Directors totalled £0.6m (2023: £0.5m).

In the United States, the Coronavirus Aid, Relief, and Economic Security Act allowed employers to defer the payment of the employer's share of social security taxes otherwise required to be paid between 27 March and 31 December 2020. The payment of the deferred taxes is required in two instalments; the first half was paid on 3 January 2022 and the remainder was paid on 3 January 2023.

The average number of staff, including Directors, employed by the Group during the year was:

	2024		2023
	Number		Number
North America	4,542		4,413
Europe and Middle East	3,403		3,643
Asia-Pacific	1,441		1,433
	9,386		9,489

 

 

 

 

9 Non-underlying items

Non-underlying items include items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired intangibles, goodwill impairment, restructuring costs and other non-trading amounts, including those relating to acquisitions and disposals. Tax arising on these items, including movement in deferred tax assets arising from non-underlying provisions, is also classified as a non-underlying item. These are detailed in the table below.

As underlying results include the benefits of restructuring programmes and acquisitions but exclude significant costs (such as major restructuring costs and the amortisation of acquired intangible assets) they should not be regarded as a complete picture of the Group's financial performance, which is presented in its total statutory results.  The exclusion of non-underlying items may result in underlying earnings being materially higher or lower than total statutory earnings. In particular, when significant impairments and restructuring charges are excluded, underlying earnings will be higher than total statutory earnings.

	2024		2023
	£m		£m
Exceptional restructuring costs		4.3	2.8
ERP implementation costs		4.0	7.5
Claims related to closed businesses		1.5	-
Loss on disposal of operations		0.8	0.1
Goodwill impairment		-	12.1
Impairment of trade receivables related to restructuring		-	0.4
Non‑underlying items in operating costs (including net impairment loss on trade receivables and contract assets)		10.6	22.9
Amortisation of acquired intangible assets		3.3	5.1
Change in fair value of contingent consideration		(6.4)	-
Gain on sale of assets held for sale		-	(0.8)
Non-underlying items in other operating income		(6.4)	(0.8)
Amortisation of joint venture acquired intangibles		-	0.6
Total non-underlying items in operating profit		7.5	27.8
Non-underlying items in finance income		-	-
Total non-underlying items before taxation		7.5	27.8
Taxation		(2.7)	(3.0)
Total non-underlying items after taxation		4.8	24.8

 

 

Non-underlying items in operating costs

 

Exceptional restructuring costs

Exceptional restructuring costs comprises £4.4m in respect of the Group's finance transformation project, which has moved certain finance activities into internal shared service centres. This is a group-wide strategic project.  The costs for the year mainly comprise headcount restructuring and one-off set up costs for the shared service centres for the EME and APAC divisions. We anticipate incurring costs for the North America division in 2025. Non-underlying costs does not include operational post-implementation running costs for the shared service centres. Exceptional restructuring costs also includes a £0.1m credit from a reduction in a restructuring provision recognised as a non-underlying cost in a prior period.

 

The Group exercises judgement in assessing whether restructuring items should be classified as non-underlying.  This assessment covers the nature of the item, cause of the occurrence and scale of impact of that item on the reported performance. Typically, management will categorise restructuring costs incurred to exit a specific geography as non-underlying, in addition restructuring programmes which are incremental to normal operations undertaken to add value to the business are included in non-underlying items. The value of exceptional restructuring costs in 2024 (£4.3m) is higher than in 2023 (£2.8m).

 

In 2023, exceptional restructuring costs of £2.8m comprised of £0.5m related to the exit from Kazakhstan, and £2.3m related to the closure of the Egypt business.

 

ERP implementation costs

The Group is continuing the strategic project to implement a new cloud computing enterprise resource planning (ERP) system across the Group.  Due to the size, nature and incidence of the relevant costs expected to be incurred, the costs are presented as a non-underlying item, as they are not reflective of the underlying performance of the Group. As this is a complex implementation, project costs are expected to be incurred for a further three years.  Non-underlying ERP costs of £4.0m (2023: £7.5m) include only costs relating directly to the implementation including external consultancy costs and the cost of the dedicated implementation team. Non-underlying costs does not include operational post-deployment costs such as licence costs for businesses that have transitioned.

 

Loss on disposal of operations

As explained in note 5, the Group disposed of its South African operation in the period, recognising a loss on disposal of £0.8m.

 

In 2023, the Group disposed of its Cyntech Tanks operation in Canada, a part of Cyntech Construction Ltd, for a total consideration of £1.5m, consisting of the sale price of £1.3m and further sale price adjustments to be paid from the Escrow amount of £0.2m. A loss on disposal of £0.1m was recognised.

 

 

Claims related to closed businesses

Claims related to closed businesses of £1.5m (2023: £nil) reflects increased provisions for customer claims for businesses no longer operating.

 

Goodwill impairment

In 2023, the goodwill impairment of £12.1m related to Keller Limited, the UK Foundations business, following uncertainty over the future profitability of the cash-generating unit after the completion of a substantial customer contract.

 

Amortisation of acquired intangible assets

Amortisation of acquired intangible assets of £3.3m relates to the amortisation charge on assets acquired in the RECON, GKM, Moretrench and NWF acquisitions. The amortisation of acquired intangible assets in 2023 of £5.1m relates to the amortisation charge on assets acquired in the RECON, GKM, Moretrench and NWF acquisitions.

 

Non-underlying items in other operating income

 

Change in fair value of contingent consideration

Non-underlying other operating income of £6.4m arises from a change in fair value of the contingent consideration related to the non-controlling interest transaction to acquire 35% of Keller Company Limited (formerly Keller Turki Company Limited) and the acquisitions of GKM Consultants and NWF. Refer to note 26 for further detail.

 

Gain on disposal of assets held for sale

During 2023, the gain on disposal of assets held for sale of £0.8m related primarily to the sale of assets owned by the now closed Waterway business in Australia. Impairment charges for these assets had previously been charged to non-underlying items in prior periods and therefore the corresponding profit on disposal of the assets is also recognised as a non-underlying item.

 

Amortisation of joint venture acquired intangibles

In 2023, the amortisation of joint venture intangibles relates to NordPile, an acquisition by the Group's joint venture interest KFS Finland Oy on 8 September 2021.

 

Non-underlying taxation

Refer to note 12 for details of the non-underlying tax items.

 

 

10 Finance income

	2024		2023
	£m		£m
Bank and other interest receivable	6.1		1.6
Net pension interest income	0.2		-
Other finance income	0.3		0.2
Underlying finance income	6.6		1.8
Total finance income	6.6		1.8

 

 

11 Finance costs

	2024		2023
	£m		£m
Interest payable on bank loans and overdrafts	1.4		12.6
Interest payable on other loans	17.3		8.6
Interest on lease liabilities	6.2		5.6
Net pension interest cost	0.4		0.3
Other interest costs	1.9		1.8
Total interest costs	27.2		28.9
Unwinding of discount on provisions	0.6		0.4
Total finance costs	27.8		29.3

 

 

12 Taxation

	2024		2023
	£m		£m
Current tax expense:
Current year	64.0		54.6
Prior years	-		0.4
Total current tax	64.0		55.0
Deferred tax expense:
Current year	(23.0)		(18.7)
Prior years	0.2		(0.5)
Total deferred tax	(22.8)		(19.2)
	41.2		35.8

UK corporation tax is calculated at 25% (2023: 23.5%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

 

The effective tax rate can be reconciled to the UK corporation tax rate of 25% (2023: 23.5%) as follows:

 

	2024				2023
		Non-				Non-
		underlying				underlying
		items				items
	Underlying	(note 9)	Statutory		Underlying	(note 9)	Statutory
	£m	£m	£m		£m	£m	£m
Profit/(loss) before tax	191.4	(7.5)	183.9		153.4	(27.8)	125.6
UK corporation tax charge/(credit) at 25% (2023: 23.5%)	47.9	(1.9)	46.0		36.0	(6.5)	29.5
Tax charged at rates other than 25% (2023: 23.5%)	5.0	-	5.0		4.3	(0.2)	4.1
Tax losses and other deductible temporary differences not recognised	2.7	-	2.7		10.1	0.6	10.7
Utilisation of tax losses and other deductible temporary differences previously unrecognised	(9.3)	-	(9.3)		(7.4)	-	(7.4)
Permanent differences	(3.6)	(0.8)	(4.4)		(4.3)	3.1	(1.2)
Adjustments to tax charge in respect of previous periods	0.2	-	0.2		(0.1)	-	(0.1)
Other	1.0	-	1.0		0.2	-	0.2
Tax charge/(credit)	43.9	(2.7)	41.2		38.8	(3.0)	35.8
Effective tax rate	22.9%	35.3%	22.4%		25.3%	10.6%	28.5%

 

The decrease in the effective tax rate on underlying profits to 23% from the 2023 rate of 25% is largely due to increased profits in Australia where a limited deferred tax asset was previously booked for carry forward losses.

 

The tax credit of £2.7m on non-underlying items has been calculated by assessing the tax impact of each component of the charge/(credit) to the income statement and applying the jurisdictional tax rate that applies to that item. The effective tax rate in 2024 on non-underlying items is higher than the effective tax rate on underlying items largely due to the credit resulting from the change in the fair value of contingent consideration, which is not subject to tax.

 

The Group is subject to taxation in over 40 countries worldwide and the risk of changes in tax legislation and interpretation from tax authorities in the jurisdictions in which it operates. The assessment of uncertain positions is subjective and subject to management's best judgement of the probability of the outcome in reaching agreement with the relevant tax authorities. Where tax positions are uncertain, provisions are made where necessary, based on interpretation of legislation, management experience and appropriate professional advice. Management do not expect the outcome of these estimates to be materially different from the position taken.

 

The UK government enacted Finance (No 2) Act 2023 on 11 July 2023, which includes the Pillar Two legislation introducing a multinational top up tax and a domestic minimum top up tax in line with the minimum 15% rate in the OECD's Pillar Two rules. The rules have applied to the Group from the beginning of the financial year commencing on 1 January 2024. The UK legislation has also adopted the OECD's transitional Pillar Two safe harbour rules which, if applicable, will deem the top up tax for a jurisdiction to be nil based on available Country-by-Country Reporting data.

 

The Group has performed an assessment of the potential exposure to Pillar Two top-up taxes, based on the Country-by-Country Reporting data for 2024 for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15%. There are however a limited number of jurisdictions where the transitional safe harbour relief may not apply and appropriate provision has been made for resultant top up taxes. The Group does not expect a material exposure to Pillar Two top up taxes for these jurisdictions.

 

The Group has applied the exemption in the amendments to IAS 12 (issued in May 2023) and has neither recognised nor disclosed information about deferred tax assets or liabilities relating to Pillar Two income taxes.

 

 

 

The following are the major deferred tax liabilities and assets recognised by the Group and the movements during the current and prior reporting periods:

				Other
	Unused	Accelerated	Retirement	employee-		Other1
	tax	capital	benefit	related	Bad	temporary
	losses	allowances	obligations	liabilities	debts	differences	Total
	£m	£m	£m	£m	£m	£m	£m
At 1 January 2023	14.5	(10.9)	3.2	6.1	10.1	(13.2)	9.8
Credit/(charge) to the income statement	(3.1)	11.9	(0.7)	6.7	(2.8)	7.2	19.2
Charge to other comprehensive income	-	-	(0.1)	-	-	-	(0.1)
Exchange movements	(0.7)	-	(0.1)	(0.4)	(0.3)	1.6	0.1
At 31 December 2023	10.7	1.0	2.3	12.4	7.0	(4.4)	29.0
Credit/(charge) to the income statement	2.5	21.2	(0.3)	(5.6)	4.5	0.5	22.8
Charge to other comprehensive income	-	-	(0.1)	-	-	-	(0.1)
Exchange movements	(0.1)	1.2	(0.1)	(0.1)	0.1	(0.2)	0.8
Other reallocations/transfers	-	(0.4)	-	-	-	-	(0.4)
At 31 December 2024	13.1	23.0	1.8	6.7	11.6	(4.1)	52.1

 

1        Other temporary differences are mainly in respect of intangible assets and contract provisions.

The movement from a net deferred tax asset of £29.0m at 31 December 2023 to £52.1m at 31 December 2024 is largely as a result of the timing of the deductibility of R&D expenditure for US tax purposes. R&D expenditure is deferred for tax purposes and amortised over five years.

 

The following is the analysis of the deferred tax balances:

	2024		2023
	£m		£m
Deferred tax assets	61.5		36.8
Deferred tax liabilities	(9.4)		(7.8)
	52.1		29.0

 

Deferred tax assets include amounts of £61.5m (2023: £36.8m) where recovery is based on forecasts of future taxable profits that are expected to be available to offset the reversal of the associated temporary differences. The deferred tax assets arise in the US (£51.2m), Australia (£6m), Canada (£2.1m), India (£1.4m) and the UK (£0.8m), with the assets recognised in Australia, Canada and the UK being partially in relation to tax losses carried forward. The amount of profits in each territory which are necessary to be realised over the forecast period to support these assets are £201m, £20m, £8m, £5.5m and £3.2m.  Canadian tax rules currently allow tax losses to be carried forward up to 20 years. Australia and the UK allow losses to be carried forward indefinitely. The recovery of deferred tax assets has been assessed by reviewing the likely timing and level of future taxable profits. The period assessed for recovery of assets is appropriate for each territory having regard to the specific facts and circumstances and the probability of achieving forecast profitability. A 10% shortfall in expected profits would have a proportional impact on the value of the deferred tax assets recoverable.

At the balance sheet date, the Group had unused tax losses of £101.7m (2023: £137.6m), mainly arising in Canada, Spain, France, Saudi Arabia, Malaysia and the UK, available for offset against future profits, on which no deferred tax asset has been recognised. Of these losses, £59.1m (2023: £84.0m) may be carried forward indefinitely. Of the remaining losses, £17.3m expire in 2025, £1.4m expire in 2028 and £23.9m expire in 2035.

At the balance sheet date, the aggregate of other deductible temporary differences for which no deferred tax asset has been recognised was £18.1m (2023: £4.4m). These differences have no expiry term.

At the balance sheet date the aggregate of temporary differences associated with investments in subsidiaries, branches and joint ventures for which no deferred tax liability has been recognised is £457.9m (2023: £373.9m), on the basis that the Group can control the reversal of temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The unprovided deferred tax liability in respect of these timing differences is £10.5m (2023: £10.0m).

 

13 Dividends payable to equity holders of the parent

Ordinary dividends on equity shares:

	2024	2023
	£m	£m
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2023 of 31.3p (2022: 24.5p) per share	22.6	17.7
Interim dividend for the year ended 31 December 2024 of 16.6p (2023: 13.9p) per share	12.0	10.0
	34.6	27.7

The Board has recommended a final dividend for the year ended 31 December 2024 of £23.6m, representing 33.1p (2023: 31.3p) per share. The proposed dividend is subject to approval by shareholders at the Annual General Meeting on 14 May 2025 and has not been included as a liability in these financial statements.

 

 

14 Earnings per share

Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

When the Group makes a profit, diluted earnings per share equals the profit attributable to equity holders of the parent adjusted for the dilutive impact divided by the weighted average diluted number of shares. When the Group makes a loss, diluted earnings per share equals the loss attributable to the equity holders of the parent divided by the basic average number of shares. This ensures that earnings per share on losses is shown in full and not diluted by unexercised share awards.

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these financial statements.

 

Basic and diluted earnings per share are calculated as follows:

	Underlying earnings attributable to the equity holders of the parent				Earnings attributable to the equity holders of the parent
	2024	2023			2024	2023
Basic and diluted earnings (£m)	147.1	114.2			142.3	89.4
Weighted average number of ordinary shares (m)1
Basic number of ordinary shares outstanding	72.1	72.8			72.1	72.8
Effect of dilution from:
Share options and awards	1.5	1.4			1.5	1.4
Diluted number of ordinary shares outstanding	73.6	74.2			73.6	74.2
Earnings per share
Basic earnings per share (p)	204.0	156.9			197.4	122.8
Diluted earnings per share (p)	199.9	153.9			193.3	120.5

 

1        The weighted average number of shares takes into account the weighted average effect of changes in treasury shares during the year. The weighted average number of shares excludes those held in the Employee Share Ownership Plan Trust and those held in treasury, which for the purpose of this calculation are treated as cancelled.

 

 

 

15 Goodwill and intangible assets

 

	Goodwill	Trade names	Customer contracts and relationships	Other intangibles	Total
	£m	£m	£m	£m	£m
Cost
At 1 January 2023	248.2	34.8	47.9	27.1	358.0
Additions	-	-	-	0.2	0.2
Exchange movements	(9.6)	(2.0)	(2.7)	(0.2)	(14.5)
At 31 December 2023 and 1 January 2024	238.6	32.8	45.2	27.1	343.7
Disposed with businesses	-	-	-	(2.1)	(2.1)
Reclassification	-	-	-	2.5	2.5
Exchange movements	(4.8)	(0.6)	(0.9)	(1.1)	(7.4)
At 31 December 2024	233.8	32.2	44.3	26.4	336.7
Accumulated amortisation and impairment
At 1 January 2023	122.9	29.0	41.7	26.5	220.1
Impairment charge for the year	12.1	-	-	-	12.1
Amortisation charge for the year	-	1.7	3.4	0.4	5.5
Exchange movements	(4.0)	(1.8)	(2.5)	(0.3)	(8.6)
At 31 December 2023 and 1 January 2024	131.0	28.9	42.6	26.6	229.1
Amortisation charge for the year	-	2.1	1.2	0.1	3.4
Disposed with businesses	-	-	-	(2.1)	(2.1)
Reclassification	-	-	-	2.5	2.5
Exchange movements	(4.8)	(0.6)	(0.9)	(1.1)	(7.4)
At 31 December 2024	126.2	30.4	42.9	26.0	225.5
Carrying amount
At 1 January 2023	125.3	5.8	6.2	0.6	137.9
At 31 December 2023 and 1 January 2024	107.6	3.9	2.6	0.5	114.6
At 31 December 2024	107.6	1.8	1.4	0.4	111.2

Other intangibles represent internally developed software and licences. There are no indicators of impairment for assets relating to trade names, customer contracts and relationships or other intangibles as at 31 December 2024. Assets disposed of during 2024 related mainly to the South African business.

 

For the purposes of impairment testing, goodwill has been allocated to six (2023: seven) separate cash-generating units (CGUs). The carrying amount of goodwill allocated to the five CGUs with the largest goodwill balances is significant in comparison to the total carrying amount of goodwill and comprises 99% of the total (2023: 99%). The relevant CGUs and the carrying amount of the goodwill allocated to each are as set out below, together with the pre-tax discount rate and medium-term growth rate used in their value-in-use calculations:

 

		2024				2023
		Carrying	Pre-tax	Forecast		Carrying	Pre-tax	Forecast
		value	discount rate1	growth rate		value	discount rate1	growth rate
CGU	Geographical segment	£m	%	%		£m	%	%
Keller US	North America	50.1	14.9	2.0		49.4	15.2	2.0
Suncoast	North America	34.4	14.8	2.0		33.9	15.2	2.0
Keller Canada	North America	12.4	13.6	2.0		13.2	13.8	2.0
Other	North America and Europe	10.7				11.1
		107.6				107.6

 

1        Pre-tax discount rates and forecast growth rates are defined by market.

The recoverable amount of the goodwill allocated to each CGU has been calculated on a value-in-use basis. The calculations use cash flow projections based on financial budgets and forecasts approved by management and cover a three-year period.

The Group's businesses operate in a diverse geographical set of markets, some of which are expected to continue to face uncertain conditions in future years. The most important factors in the value-in-use calculations are the forecast revenues and operating margins during the forecast period, the growth rates and discount rates applied to future cash flows. The key assumptions underlying the cash flow forecasts are revenue and operating margins assumed throughout the forecast period. Revenue and operating margins are prepared as part of the Group's three-year forecast in line with the Group's annual business planning process. The Group's budget for 2025 and financial projections for 2026 and 2027 were approved by the Board, and have been used as the basis for input into the value-in-use calculation.

 

Management considers all the forecast revenues, margins and profits to be reasonably achievable given recent performance and the historic trading results of the relevant CGUs. A margin for historical forecasting error has also been factored into the value-in-use model. Cash flows beyond 2027 which are deemed to be on a continuing basis have been extrapolated using the forecast growth rates above and do not exceed the long-term average growth rates for the markets in which the relevant CGUs operate. The growth rates used in the Group's value-in-use calculation into perpetuity are based on forecasted growth in the construction sector in each region where a CGU is located and adjusted for longer-term compound annual growth rates for each CGU as estimated by management. The discount rates used in the value-in-use calculations are based on the weighted average cost of capital of companies comparable to the relevant CGUs, adjusted as necessary to reflect the risk associated with the asset being tested.

Management's assessment for Keller Canada and Keller Norway (net book value of £4.2m presented in other CGUs in the table above) are sensitive to the future successful execution of each CGU's business plans to consistently meet forecasted margins (which assumes a continued improvement in operating performance) by improving project delivery and revenue growth. The estimated recoverable amounts for Keller Canada and Keller Norway exceed their carrying values by £22.3m and £0.4m respectively. For Keller Canada, the forecasted annual operating profit margin for 2025 to 2027 would need to decrease by 410 basis points in each respective year  to result in a full impairment of the carrying value of the goodwill. For Keller Norway, the forecasted annual operating profit margin for 2025 to 2027 would need to decrease by 260 basis points in each respective year to result in a full impairment of the carrying value of the goodwill.

For the remaining CGUs, management believes that any reasonable possible change in the key assumptions on which the recoverable amounts of the CGUs are based would not cause any of their carrying amounts to exceed their recoverable amounts.

A number of sensitivities were run on the projections to identify the changes required in each of the key assumptions that, in isolation, would give rise to an impairment of the following goodwill balances. 

		Increase in1	Reduction in1	Reduction in
		discount	future growth	final year cash
		rate	rate	Flow
CGU	Geographical segment	%	%	%
Keller US	North America	66.7	n/a	111.9
Suncoast	North America	47.7	145.9	103.5
Keller Canada	North America	8.2	10.3	52.3

 

1        The increase in discount rate and reduction in future growth rate are presented as gross movements.

 

 

16 Property, plant and equipment

Property, plant and equipment comprises owned and leased assets.

			2024		2023
	Note		£m		£m
Property, plant and equipment - owned assets	16a		371.5		394.9
Right-of-use assets - leased assets	16b		89.9		85.3
At 31 December			461.4		480.2

 

16 a) Property, plant and equipment - owned assets

			Plant,
		Land and		machinery	Capital work
		buildings		and vehicles	in progress		Total
		£m		£m	£m		£m
Cost
At 1 January 2023		76.2		1,018.1	11.2		1,105.5
Additions		4.3		85.3	4.7		94.3
Transfer from leased assets (note 16b)		-		0.8	-		0.8
Disposals		(0.6)		(69.8)	(0.1)		(70.5)
Net transfers to held for sale		-		(1.7)	-		(1.7)
Disposed with businesses		-		(0.8)	-		(0.8)
Reclassification		1.2		5.8	(7.0)		-
Exchange movements		(2.5)		(37.3)	(0.6)		(40.4)
At 31 December 2023 and 1 January 2024		78.6		1,000.4	8.2		1087.2
Additions		5.0		80.1	3.9		89.0
Disposals		(2.1)		(40.8)	-		(42.9)
Net transfers to held for sale1		(2.3)		(13.0)	-		(15.3)
Disposed with businesses2		(0.1)		(10.2)	-		(10.3)
Reclassification		-		2.7	(2.7)		-
Exchange movements		(1.5)		(20.6)	(0.2)		(22.3)
At 31 December 2024		77.6		998.6	9.2		1,085.4
Accumulated depreciation and impairment
At 1 January 2023		25.4		670.6	-		696.0
Charge for the year		3.1		78.7	-		81.8
Disposals		(0.2)		(57.3)	-		(57.5)
Net transfers to held for sale		-		(0.2)	-		(0.2)
Disposed with businesses		-		(0.4)	-		(0.4)
Exchange movements		(0.8)		(26.6)	-		(27.4)
At 31 December 2023 and 1 January 2024		27.5		664.8	-		692.3
Charge for the year		2.0		76.8	-		78.8
Disposals		(1.6)		(27.5)	-		(29.1)
Net transfers to held for sale1		-		(2.4)	-		(2.4)
Disposed with businesses2		-		(9.5)	-		(9.5)
Exchange movements		(0.5)		(15.7)	-		(16.2)
At 31 December 2024		27.4		686.5	-		713.9
Carrying amount
At 1 January 2023		50.8		347.5	11.2		409.5
At 31 December 2023 and 1 January 2024		51.1		335.6	8.2		394.9
At 31 December 2024		50.2		312.1	9.2		371.5

1        The carrying amount of assets held for sale at the balance sheet date are detailed in note 22.

2        Assets disposed with the South African business in 2024 and the Cyntech Tanks operation in Canada in 2023 as detailed in note 5.

The Group had contractual commitments for the acquisition of property, plant and equipment of £16.9m (2023: £12.0m) at the balance sheet date. These amounts were not included in the balance sheet at the year end.

 

16 b) Right-of-use assets - leased assets

The Group has lease contracts for various items of land and buildings, plant, machinery and vehicles used in its operations. Leases of land and buildings generally have lease terms between 3 and 15 years, while plant, machinery and vehicles generally have lease terms between two and eight years. The Group's obligations under its leases are secured by the lessor's title to the lease assets. Generally, the Group is restricted from assigning and sub-leasing its leased assets. There are several lease contracts that include extension and termination options.

The Group has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the 'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases.

 

 

Set out below are the carrying amounts of the right-of-use assets recognised and the movements during the year:

			Plant,
	Land and		machinery
	buildings		and vehicles	Total
	£m		£m	£m
At 1 January 2023	44.1		32.9	77.0
Additions	18.0		15.9	33.9
Acquired with businesses	-		(0.8)	(0.8)
Depreciation expense	(14.7)		(14.7)	(29.4)
Impairment expense	(0.6)		-	(0.6)
Contract modifications	7.3		1.4	8.7
Exchange movements	(2.1)		(1.4)	(3.5)
At 31 December 2023 and 1 January 2024	52.0		33.3	85.3
Additions	7.6		18.8	26.4
Depreciation expense	(15.3)		(14.6)	(29.9)
Contract modifications	9.7		(0.9)	8.8
Exchange movements	(0.5)		(0.2)	(0.7)
At 31 December 2024	53.5		36.4	89.9

The carrying amounts of lease liabilities (included within note 26 within loans and borrowings) and the movements during the year are set out in note 27.

 

 

17 Investments in joint ventures

 

The Group's investment in joint ventures relates to a 50% interest in the ordinary shares of KFS Finland Oy, an entity incorporated in Finland.

		2024 £m
At 1 January 2024		4.5
Share of underlying post-tax results		0.5
Share of non-underlying post-tax results (note 9)		-
Exchange movements		(0.2)
At 31 December 2024		4.8

 

		2023 £m
At 1 January 2023		4.4
Share of underlying post-tax results		0.8
Share of non-underlying post-tax results (note 9)		(0.6)
Exchange movements		(0.1)
At 31 December 2023		4.5

In 2024, KFS Finland Oy earned total revenue of £30.2m (2023: £19.0m) and a statutory profit after tax for the year of £0.5m (2023: £0.2m).

The joint venture had no contingent liabilities or commitments as at 31 December 2024 (2023: £nil).

Aggregate amounts relating to joint ventures:

	2024			2023
	Underlying	Non-underlying items (note 9)	Statutory	Underlying	Non-underlying items (note 9)	Statutory
	£m	£m	£m	£m	£m	£m
Revenue	30.2	-	30.2	19.0	-	19.0
Operating costs1	(29.6)	-	(29.6)	(18.0)	(0.6)	(18.6)
Operating profit/(loss)	0.6	-	0.6	1.0	(0.6)	0.4
Finance costs	(0.1)	-	(0.1)	(0.2)	-	(0.2)
Profit/(loss) before taxation	0.5	-	0.5	0.8	(0.6)	0.2
Taxation	-	-	-	(0.1)	0.1	-
Share of post-tax results	0.5	-	0.5	0.7	(0.5)	0.2

 

1            Included within operating costs is depreciation on owned assets of £0.9m (2023: £0.9m).

 

	KFS Finland Oy (100% of results)		Group's portion of the joint venture
	2024	2023	2024	2023
	£m	£m	£m	£m
Non-current assets	15.4	16.0	7.7	8.0
Cash and cash equivalents	2.8	3.2	1.4	1.6
Other current assets	8.2	3.0	4.1	1.5
Total assets	26.4	22.2	13.2	11.1
Other current liabilities	(8.6)	(3.8)	(4.3)	(1.9)
Non-current loans and borrowings	(7.8)	(9.0)	(3.9)	(4.5)
Other non-current liabilities	(0.4)	(0.4)	(0.2)	(0.2)
Total liabilities	(16.8)	(13.2)	(8.4)	(6.6)
Net assets	9.6	9.0	4.8	4.5

 

 

 

18 Other non-current assets

	2024		2023
	£m		£m
Non-qualifying deferred compensation plan assets		23.0	20.5
Customer retentions		33.7	22.7
Other assets		1.3	1.6
Insurance receivables		30.3	22.0
		88.3	66.8

A non-qualifying deferred compensation plan (NQ) is available to US employees, whereby an element of eligible employee bonuses and salary is deferred over a period of four to six years. The plan allows participants to receive tax relief for contributions beyond the limits of the tax-free amounts allowed per the 401k defined contribution pension plan. The plan is administered by a professional investment provider with participants able to select their investments from an approved listing. An amount equal to each participant's compensation deferral is transferred into a trust and invested in various marketable securities. The related trust assets are not identical to investments held on behalf of the employee but are invested in similar funds with the objective that performance of the assets closely tracks the liabilities. The investments held in the trust are designated solely for the purpose of paying benefits under the non-qualified deferred compensation plan. The investments in the trust would however be available to all unsecured general creditors in the event of insolvency.

The value of both the employee investments and those held in trust by the company are measured using Level 1 inputs per IFRS 13 ('quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date') based on published market prices at the end of the period. Adjustments to the fair value are recorded within net finance costs in the consolidated income statement.

 

Invoiced amounts for customer retentions are balances typically payable at the end of a construction project, when all contractual performance obligations have been met, and are therefore received over a longer period of time.

 

At 31 December 2024, non-current assets in relation to the investments held in the trust were £23.0m (2023: £20.5m). The fair value movement on these assets was £2.1m (2023: £2.2m). During the period proceeds from the sale of NQ-related investments were £nil (2023: £nil). At 31 December 2024, non-current liabilities in relation to the participant investments were £15.6m (2023: £14.3m). These are accounted for as financial liabilities at fair value through profit or loss. The fair value movement on these liabilities was £2.1m (2023: £2.6m). During the year £1.2m (2023: £0.6m) of compensation was deferred.

 

Further details on insurance receivables are given in note 24.

 

 

19 Inventories

	2024		2023
	£m		£m
Raw materials and consumables	49.2		58.9
Work in progress	1.1		1.0
Finished goods	31.3		33.4
	81.6		93.3

 

During 2024, £2.0m (2023: £1.3m) of inventory write-downs were recognised as an expense for inventories carried at net realisable value. This is recognised within operating costs in the consolidated income statement.

 

During 2024, inventory balances decreased by £11.7m (2023: £31.1m increase), which was made up of cashflow movements of £10.4m (2023: £26.8m), foreign exchange movements of £1.2m (2023: £4.2m) and other non-cash movements of £0.1m (2023: £0.1m).

 

 

 

 

20 Trade and other receivables

	2024		2023
	£m		£m
Trade receivables		575.1	583.1
Contract assets		119.2	90.9
Other receivables		23.7	21.7
Prepayments		41.0	26.1
Fair value of derivative financial instruments		0.1	-
	759.1		721.8

 

During 2024, trade and other receivable balances increased by £37.3m (2023: £42.8m decrease), which was made up of cashflow movements of £(54.4)m (2023: £1.5m), foreign exchange movements of £5.9m (2023: £33.0m) and other non-cash movements of £11.2m (2023: £8.3m).

 

Further details on insurance receivables included within other receivables are given in note 24.

 

Trade receivables and contract assets included in the balance sheet are shown net of expected credit loss provisions as detailed in note 2.

The movement in the allowance for expected credit losses of trade receivables and contract assets is as follows:

 

	2024		2023
	£m		£m
At 1 January	45.1		36.0
Used during the year	(2.7)		(10.8)
Additional provisions	21.0		29.4
Unused amounts reversed	(9.0)		(7.7)
Disposal of businesses	(1.3)		-
Exchange movements	(0.8)		(1.8)
At 31 December1	52.3		45.1

 

¹        Of this amount £27.0m (2023: £16.8m) is subject to enforcement activity.

Set out below is information about the credit risk exposure on the Group's trade receivables and contract assets, detailing past due but not impaired, based on agreed terms and conditions with the customer:

				2024
	Contract assets	Trade receivables and non-current customer retentions
			Days past due
	Total	Current	<30 days	31-90 days	>90 days	Total
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	1%	1%	2%	1%	64%	8%
Estimated total gross carrying amount at default	120.8	461.0	80.1	52.6	65.9	659.6
Allowance for expected credit loss	(1.6)	(6.7)	(1.5)	(0.4)	(42.1)	(50.7)
Carry amount as shown in the balance sheet	119.2	454.3	78.6	52.2	23.8	608.9

 

				2023
	Contract assets	Trade receivables and  non-current customer retentions
			Days past due
	Total	Current	<30 days	31-90 days	>90 days	Total
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	1%	1%	1%	1%	46%	7%
Estimated total gross carrying amount at default	92.2	402.8	109.8	57.9	79.1	649.6
Allowance for expected credit loss	(1.3)	(5.9)	(1.0)	(0.3)	(36.6)	(43.8)
Carry amount as shown in the balance sheet	90.9	396.9	108.8	57.6	42.5	605.8

 

The Group's expected credit loss rate for trade receivables and non-current customer retentions that were more than 90 days past due increased from 46% in 2023 to 64% in 2024. This was as a result of specific provisions that were provided in relation to both customers struggling financially and contractual disputes leading to failure of recovery. The other expected credit loss rates were in line with the prior year.

 

 

 

21 Cash and cash equivalents

	2024		2023
	£m		£m
Bank balances	116.1		105.2
Short-term deposits	91.6		46.2
Cash and cash equivalents in the balance sheet	207.7		151.4
Bank overdrafts	-		(2.4)
Cash and cash equivalents in the cash flow statement	207.7		149.0

 

Cash and cash equivalents include £5.0m (2023: £4.4m) of the Group's share of cash and cash equivalents held by joint operations, and £nil (2023: £1.1m) of restricted cash which is subject to local country restrictions as it is held as collateral in support of bank guarantees.

 

 

22 Assets held for sale

	2024		2023
	£m		£m
Plant and machinery	9.2		1.6
	9.2		1.6

 

During 2024, £12.9m (2023: £1.5m), of assets were transferred from Property, plant and equipment to Assets held for sale. Of these, an asset in North America with £nil net book value (2023: £1.1m) and £2.4m of the Austral assets in APAC were disposed of for a total cash consideration of £6.5m resulting in a gain from the disposal of assets of £4.1m, which is included in operating costs.

At 31 December 2024, assets held for sale comprised of drilling rigs in Saudi Arabia costing £4.2m, a cargo ship in Australia costing £2.8m, other assets in Saudi Arabia costing £1.3m and other assets in Australia costing £0.2m, all of which were added during the period and an electric crane in Australia costing £0.6m. 

 

23 Trade and other payables

	2024		2023
	£m		£m
Trade payables	168.0		155.5
Other taxes and social security payable	17.2		16.8
Other payables	164.7		153.0
Contract liabilities	115.2		90.9
Accruals	142.9		137.1
Fair value of derivative financial instruments	0.7		0.3
	608.7		553.6

 

 

Other payables includes contingent and deferred consideration of £0.6m (2023: £1.7m), interest payable of £6.0m (2023: £6.1m), non-qualifying compensation plan liabilities of £1.4m (2023: £3.3m) and contract specific accruals of £131.3m (2023: £119.1m).

 

During 2024, trade and other payable balances increased by £55.1m (2023: £32.0m decrease), which was made up of cashflow movements of £71.7m (2023: £25.6m), foreign exchange movements of £(9.5)m (2023: £22.0m) and other non-cash movements of £(7.1)m (2023: £(15.6m)).

 

 

24 Provisions

	Employee	Restructuring	Contract	Insurance and legal	Other
	provisions	provisions	provisions	provisions	provisions	Total
	£m	£m	£m	£m	£m	£m
As at 31 December 2023	9.6	6.1	41.2	73.4	2.5	132.8
Charge for the year	3.4	2.2	43.4	28.2	0.7	77.9
Used during the year	(1.8)	(3.5)	(11.6)	(7.3)	(0.6)	(24.8)
Unused amounts reversed	(0.1)	(0.1)	(5.9)	(4.1)	-	(10.2)
Unwinding of discount	-	-	-	0.6	-	0.6
Exchange movements	(0.1)	(0.7)	(0.8)	(0.2)	-	(1.8)
At 31 December 2024	11.0	4.0	66.3	90.6	2.6	174.5
Current	4.2	3.6	52.5	22.6	2.3	85.2
Non-current	6.8	0.4	13.8	68.0	0.3	89.3
At 31 December 2024	11.0	4.0	66.3	90.6	2.6	174.5

 

 

Employee provisions

Employee provisions relate to various liabilities in respect of employee rights and benefits, including the workers' compensation scheme in North America and long service leave benefits in Australia.

At 31 December 2024, the provision in respect of workers' compensation was £7.2m (2023: £6.5m). A provision is recognised when an employee informs the company of a workers' compensation claim. The provision is measured based on information provided by the workers' compensation insurer. The actual costs that may be incurred in respect of these claims are dependent on the assessment of an employee's claim and potential medical expenses, with timing of outflows variable depending on the claim.

At 31 December 2024, the provision in respect of long service leave was £2.1m (2023: £2.0m). A provision is recognised at the point an employee joins the company, with an adjustment made to factor the likelihood that the employee will remain in continuous service with the company to meet the threshold to receive the benefits. It is measured on an IAS 19 basis, at the present value of expected future benefit for services provided by employees up to the reporting date. The actual costs that may be incurred are dependent on the length of service for employees and amended for any starters and leavers. The provision is utilised when the leave is taken by the employee or when unused leave is paid on termination of employment.

Employee provisions also includes an amount of £1.7m (2023: £0.8m) in respect of social security contributions on share options. This provision is utilised as the options are exercised by employees, which occurs when the awards vest. The provision covers three years of open share options and will be utilised each year as the options vest.

Restructuring provisions

A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring, has raised a valid expectation in those individuals affected and liabilities have been identified. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring. The provisions comprise mainly amounts for redundancy costs. Estimates may differ from the actual charges depending on the finalisation of redundancy amounts. These provisions are expected to be utilised within the next 12 months.

The restructuring provisions in 2024 included amounts provided in the year for senior management changes, the majority of which have been utilised by year end.

The restructuring provisions in 2023 included amounts provided in the year for the exit from the Egypt business, as well as amounts not yet settled from restructuring projects provided in the prior year.

Contract provisions

Contract provisions include onerous contracts where the forecast costs of completing the contract exceed the revenue and provision for potential remediation costs that we believe are probable to incur.

Provision for onerous contracts is made in full when such losses are foreseen, based on the estimated unavoidable costs of meeting the obligations of the contract, where these exceed the economic benefits expected to be received. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The actual loss incurred is uncertain until the project has been completed, and the actual costs incurred to complete the contract could be higher or lower than estimated in the calculation of the provision. The majority of this balance is expected to be utilised in the next 12 months, given the general short-term nature of contracts.

Provision for potential remediation costs typically arise after the completion of a project through a customer claim or dispute. The provision reflects our estimate of costs to be incurred in relation to the dispute, some disputes can take a long period of time to resolve and the actual amount incurred could be higher or lower than our provision, so there is uncertainty over both the amount and the timing of the expected cash outflows. The non-current element of the provision relates to disputes we expect will take longer than a year to resolve.

Insurance and legal provisions

Insurance and legal provisions comprises the liability for legal claims against the Group, including those that are retained within the Group's captive insurer (the 'captive'). The captive covers both public liability and professional indemnity claims for the Group. The captive covers liabilities below an upper limit above which third-party insurance applies. The provision also includes matters relating to separate legal issues which are not covered by the captive, including claims arising from civil matters which could result in penalties and legal costs. By their nature the amounts and timings of any outflows are difficult to predict.

Provisions for insurance and legal claims are made based on the best estimate of the likely total settlement value of a claim against the Group. Management seek specialist input from legal advisers and the Group's insurance claims handler to estimate the most likely legal outcome. The outcome of legal negotiations is inherently uncertain; as a result, there can be no guarantee that the assumptions used to estimate the provision will result in an accurate prediction of the actual costs that may be incurred.

A provision is recognised when it is judged likely that a legal claim will result in a payment to the claimant and the amount of the claim can be reliably estimated. Provisions are utilised as insurance or other legal claims are settled, which may take a number of years. A separate insurance receivable is recognised to the extent that confirmed third-party insurance is expected to cover any element of an estimated claim value and is virtually certain to be recovered. The asset is recognised within other non-current assets (refer to note 18) and trade and other receivables (refer to note 20). Management considers that there are no instances of reimbursable assets which are probable in nature.

 

Other provisions

Other provisions are in respect of property dilapidation arising from lease obligations and other operational provisions. Where a lease includes a 'make-good' requirement, provision for the cost is recognised as the obligation is incurred, either at the commencement of the lease or as a consequence of using the asset, and the cost of the expected work required can be reliably estimated. These are expected to be utilised over the relevant lease term which ranges from 3 to 15 years across the Group.

 

 

25 Other non-current liabilities

	2024		2023
	£m		£m
Non-qualifying compensation plan liabilities		15.6	14.3
Other liabilities		3.0	8.9
		18.6	23.2

Other liabilities include deferred and contingent consideration of £2.6m (2023: £8.9m).

Refer to note 18 for further information on the non-qualifying deferred compensation plan.

 

 

26 Financial instruments

Exposure to credit, interest rate and currency risks arise in the normal course of the Group's business and have been identified as risks for the Group. Derivative financial instruments are used to hedge exposure to fluctuations in foreign exchange and interest rates.

The Group does not trade in financial instruments nor does it engage in speculative derivative transactions.

Currency risk

The Group faces currency risk principally on its net assets, most of which are in currencies other than sterling. The Group aims to reduce the impact that retranslation of these net assets might have on the consolidated balance sheet by matching the currency of its borrowings, where possible, with the currency of its assets. The majority of the Group's borrowings are held in sterling and US dollars.

 

The Group manages its currency flows to minimise transaction exchange risk. Forward contracts are used to hedge significant individual transactions. The majority of such currency flows within the Group relate to the repatriation of profits, intra-group loan repayments and any foreign currency cash flows associated with acquisitions. The Group's treasury risk management is performed at the Group's head office.

As at 31 December 2024, the fair value of outstanding foreign exchange forward contracts was £0.7m (2023: £0.3m) included in current liabilities.

Interest rate risk

 

Our objectives are to add stability to the interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use fixed rate external debt and have previously used interest rate swaps as part of our interest rate risk management strategy.

Interest rate risk is managed by either fixed or floating rate borrowings dependent upon the purpose and term of the financing.

As at 31 December 2024, 100% (2023: 99%) of the Group's third-party borrowings were at fixed interest rates.

Hedging currency risk and interest rate risk

The Group currently uses hedge accounting to manage currency risk only. Where hedging instruments are used to hedge significant individual transactions, the Group ensures that the critical terms, including dates, currencies, nominal amounts, interest rates and lengths of interest periods, are matched. The Group uses both qualitative and quantitative methods to confirm this and to assess the effectiveness of the hedge.

There are no derivatives or other hedging instruments in place at the balance sheet date held for the purpose of hedging interest rate risk.

Credit risk

The Group's principal financial assets are trade and other receivables, bank and cash balances and a limited number of investments and derivatives held to hedge certain Group exposures. These represent the Group's maximum exposure to credit risk in relation to financial assets.

The Group has procedures to manage counterparty risk and the assessment of customer credit risk is embedded in the contract tendering processes. The counterparty risk on bank and cash balances is managed by limiting the aggregate amount of exposure to any one institution by reference to their credit rating and by regular review of these ratings.

Customer credit risk is mitigated by the Group's relatively small average contract size and diversity, both geographically and in terms of end markets. No individual customer represented more than 4% of revenue in 2024 (2023: 4%). The ageing of trade receivables that were past due but not impaired is shown in note 20.

The Group evaluates each new customer and assesses their creditworthiness before any contract is undertaken.

The Group reviews customer receivables (including contract assets) on an ageing basis and provides against expected unrecoverable amounts. Experience has shown the level of historical provision required to be relatively low. Credit loss provisioning reflects past experience, economic factors and specific conditions.

The Group's estimated exposure to credit risk for trade receivables and contract assets is disclosed in note 20. This amount is the accumulation of several years of provisions for known or expected credit losses.

 

Liquidity risk and capital management

The Group's capital structure is kept under constant review, taking into account the need for availability and cost of various sources of funding. The capital structure of the Group consists of net debt and equity as shown in the consolidated balance sheet. The Group maintains a balance between the certainty of funding and a flexible, cost-effective financing structure, with all main borrowings being from committed facilities. The Group's policy ensures that its capital structure is appropriate to support this balance and the Group's operations.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's debt and committed facilities mainly comprise a $120m private placement repayable in August 2030, a $180m private placement repayable in August 2033 and a £400m syndicated revolving credit facility expiring in June 2029.

In June 2024 the Group completed the refinancing of its core £375m revolving credit facility, which was set to expire in November 2025, replacing it with a new £400m facility that will expire in June 2029 (the RCF). The RCF has an extension option for two further years to June 2030 and June 2031, with the agreement of the lending banks, and its terms and conditions are materially the same as the prior facility. The RCF remained undrawn at 31 December 2024.

 

The private placement debt and RCF are subject to certain covenants linked to the Group's financing structure, specifically regarding the ratios of net debt and interest to profit. The covenants are calculated on an IAS 17 basis, EBITDA to net debt leverage must be below three times and EBITDA interest cover must be above four times. The covenants are tested at the half year and year end reporting dates. The liability for the private placement debt has been presented as a non-current liability as it is not due to be repaid until 2030 and 2033, and we do not anticipate having any difficulty in complying with the covenants. The Group has complied with these covenants throughout the year, and the going concern assessment detailed in note 1 indicated that the covenants would not be breached in our most extreme downside scenario incorporating an aggregation of all risks considered.

At the year end, the Group also had other borrowing facilities available of £47.4m (2023: £50.2m).

Private placements

In August 2023, $120m and $180m were raised through a private placement with US institutions. The US private placement notes are accounted for on an amortised cost basis and are retranslated at the exchange rate at each period end. The carrying value of the $120m and $180m private placement liabilities at 31 December 2024 were £95.7m and £143.6m, respectively. 

In December 2024, the Group repaid $75m of US private placement notes as they fell due. The repayment was funded from the proceeds of the 2023 US private placement notes.

Hedging

The Group entered into a Treasury lock on 28 April 2023 designated as a cash flow hedge against the highly probable cash outflows for the interest payments on the US private placement notes issued in August 2023. A Treasury lock is a synthetic forward sale of a US Treasury note, which is settled in cash based upon the difference between an agreed-upon treasury rate and the prevailing treasury rate at settlement. Such Treasury locks are entered into to effectively fix the underlying treasury rate component of an upcoming debt issuance. The Treasury lock was settled on 26 May 2023. The gain from the proceeds of the hedging instrument was recognised in the hedging reserve and an amount is transferred to the income statement as the cash flows are realised.

All hedges are tested for effectiveness every six months. All hedging relationships remained effective during the year while they were in place. 

 

Accounting classifications

	2024	2023
	£m	£m
Financial assets measured at fair value through profit or loss
Non-qualifying deferred compensation plan	23.2	20.5
Financial assets measured at amortised cost
Trade receivables	575.1	583.1
Contract assets	119.2	90.9
Cash and cash equivalents	207.7	151.4
Financial liabilities at fair value through profit or loss
Contingent consideration payable	(3.2)	(10.0)
Forward contracts	(0.7)	(0.3)
Financial liabilities measured at amortised cost
Trade payables	(168.0)	(155.5)
Contract liabilities	(115.2)	(90.9)
Bank and other loans	(236.6)	(297.1)
Lease liabilities	(98.0)	(91.6)
Deferred consideration payable	-	(0.7)

Effective interest rates and maturity analysis

In respect of financial liabilities, the following table indicates their effective interest rates and undiscounted contractual cash flows at the balance sheet date:

				2024
								Due after					Carrying amount
	Effective	Due within			Due within	Due within		more than					as shown in the
	interest rate	1 year			1-2 years	2-5 years		5 years	Total				balance sheet
	%	£m			£m	£m		£m	£m				£m
Bank loans and overdrafts	1.4	(0.3)			(0.1)	-		-	(0.4)				(0.4)
Other loans and private placements	6.4	(15.4)			(15.4)	(46.1)		(277.1)	(354.0)				(236.2)
Lease liabilities	-	(33.1)			(27.0)	(40.8)		(13.6)	(114.5)				(98.0)
Contract liabilities	-	(115.2)			-	-		-	(115.2)				(115.2)
Trade payables	-	(168.0)			-	-		-	(168.0)				(168.0)
Contingent consideration	-	(0.6)			(1.0)	(2.0)		-	(3.6)				(3.2)
		(332.6)			(43.5)	(88.9)		(290.7)	(755.7)				(621.0)
			2023
							Due after					Carrying amount
	Effective		Due within		Due within	Due within	more than					as shown in the
	interest rate		1 year		1-2 years	2-5 years	5 years			Total		balance sheet
	%		£m		£m	£m	£m			£m		£m
Bank loans and overdrafts	2.5		(2.8)		(0.4)	(0.1)	-			(3.3)		(3.2)
Other loans and private placements	6.0		(76.5)		(15.1)	(45.4)	(287.9)			(424.9)		(293.9)
Lease liabilities	-		(31.0)		(24.4)	(36.7)	(16.3)			(108.4)		(91.6)
Contract liabilities	-		(90.9)		-	-	-			(90.9)		(90.9)
Trade payables	-		(155.5)		-	-	-			(155.5)		(155.5)
Contingent consideration	-		(1.7)		(3.0)	(7.4)	-			(12.1)		(10.7)
			(358.4)		(42.9)	(89.6)	(304.2)			(795.1)		(645.8)

Loans and borrowings analysis

	2024		2023
	£m		£m
$75m private placement (due December 2024)	-		(59.0)
$120m private placement (due August 2030)	(95.7)		(94.2)
$180m private placement (due August 2033)	(143.6)		(141.2)
Deferred financing costs	3.1		0.5
Bank overdrafts	-		(2.4)
Other bank borrowings	(0.4)		(0.8)
Lease liabilities (note 27)	(98.0)		(91.6)
Total loans and borrowings	(334.6)		(388.7)

The Group has substantial borrowing facilities available to it. The undrawn committed facilities available at 31 December 2024 amounted to £400.0m (2023: £377.8m), this is the Group's unutilised £400m revolving credit facility, which expires on 4 June 2029. In addition, the Group had undrawn uncommitted borrowing facilities totalling £47.4m at 31 December 2024 (2023: £47.4m). Other uncommitted bank borrowing facilities are normally reaffirmed by the banks annually, although they can theoretically be withdrawn at any time. Facilities totalling £nil (2023: £nil) are secured against certain assets. Future obligations under finance leases on a former IAS 17 basis totalled £0.6m (2023: £0.5m), including interest of £0.1m (2023: £0.1m).

 

Changes in loans and borrowings were as follows:

						Foreign
		2023	Cash flows	Other1	New leases	exchange movements	Fair value changes	2024
		£m	£m	£m	£m	£m	£m	£m
Bank overdrafts		(2.4)	2.4	-	-	-	-	-
Bank loans		(0.8)	0.4	-	-	-	-	(0.4)
Private placements		(294.4)	58.6	(0.2)	-	(3.3)	-	(239.3)
Deferred financing costs		0.5	3.5	(0.9)	-	-	-	3.1
Lease liabilities (note 27)		(91.6)	34.2	(15.0)	(26.4)	0.8	-	(98.0)
Total loans and borrowings		(388.7)	99.1	(16.1)	(26.4)	(2.5)	-	(334.6)

 

1        Other comprises disposals and contract modifications and interest accretion on lease liabilities and the amortisation of deferred financing costs on bank loans.

 

 

 

Changes in loans and borrowings in the prior year were as follows:

						Foreign
		2022	Cash flows	Other1	New leases	exchange movements	Fair value changes	2023
		£m	£m	£m	£m	£m	£m	£m
Bank overdrafts		(6.9)	4.5	-	-	-	-	(2.4)
Bank loans		(249.5)	244.5	(1.1)	-	5.3	-	(0.8)
Private placements		(62.0)	(241.2)	0.6	-	8.7	-	(293.9)
Other loans		(0.6)	0.6	-	-	-	-	-
Lease liabilities (note 27)		(81.0)	33.9	(14.3)	(33.9)	3.7	-	(91.6)
Total loans and borrowings		(400.0)	42.3	(14.8)	(33.9)	17.7	-	(388.7)

 

1        Other comprises disposals and contract modifications and interest accretion on lease liabilities and the amortisation of deferred financing costs on bank loans.

Cash flow hedges

At 31 December 2024, the Group held foreign exchange forward contracts to hedge exposures to changes in foreign currency rates. The net value of instruments held was £0.7m (2023: £0.3m).

				2024
	Maturity				Carrying amount		Change in fair
							value used for
							calculating
							hedge	Nominal
	<1 year	1-2 years	2-5 years	>5 years	Asset	Liability	ineffectiveness	amount
	£m	£m	£m	£m	£m	£m	£m	£m
Forward exchange forwards	(0.7)	-	-	-	-	(0.7)	-	(0.7)

 

 

 

		2023
	Maturity					Carrying amount			Change in fair
									value used for
									calculating
									hedge	Nominal
	<1 year	1-2 years	2-5 years		>5 years		Asset1	Liability	ineffectiveness	amount
	£m	£m	£m		£m		£m	£m	£m	£m
Forward exchange forwards	(0.3)	-	-		-		-	(0.3)	-	(0.3)

 

Fair value hedges

At 31 December 2024, the Group held no instruments to hedge exposures to changes in interest rates (2023: £nil).

 

Fair values

The fair values of the Group's financial assets and liabilities are not materially different from their carrying values. The following summarises the major methods and assumptions used in estimating the fair values of financial instruments; being derivatives, interest-bearing loans and borrowings, contingent and deferred consideration and payables, receivables and contract assets, cash and cash equivalents.

 

Derivatives

The fair values of foreign currency forward contracts are calculated based on achieved contract rates compared to the prevailing market rates at the balance sheet date. The valuation methods of all of the Group's derivative financial instruments carried at fair value are categorised as Level 2. Level 2 assets are financial assets and liabilities that do not have regular market pricing, but whose fair value can be determined based on other data values or market prices.

Interest-bearing loans and borrowings

Fair value is calculated based on expected future principal and interest cash flows discounted using appropriate discount rates prevailing at the balance sheet date.

Contingent and deferred consideration

Fair value is calculated based on the amounts expected to be paid, determined by reference to forecasts of future performance of the acquired businesses, discounted using appropriate discount rates prevailing at the balance sheet date and the probability of contingent events and targets being achieved.

The valuation methods of the Group's contingent consideration carried at fair value are categorised as Level 3. Level 3 assets are financial assets and liabilities that are considered to be the most illiquid. Their values have been estimated using available management information, including subjective assumptions. The individually significant unobservable inputs used in the fair value measurement of the Group's contingent consideration as at 31 December 2024 are the estimation of future profits at Keller Arabia in order to determine the expected outcome of the earnout arrangement.

The following table shows a reconciliation from the opening to closing balances for contingent and deferred consideration:

	2024		2023
	£m		£m
At 1 January	10.7		1.9
Non-controlling interest (note 34)	-		9.3
Paid during the period	(0.9)		(0.2)
Fair value in the income statement during the period (note 9)	(6.4)		-
Exchange movements	(0.2)		(0.3)
At 31 December	3.2		10.7

 

On 29 August 2023, the Group acquired the 35% interest in the voting shares of Keller Company Limited (formerly Keller Turki Company Limited). A contingent consideration is payable annually between the years 2023 and 2027, dependent on the qualifying revenue generated by the business for each of those years. The fair value of the contingent consideration as at 31 December 2024 was £3.2m (SAR 15.1m).

 

On 1 May 2022, the Group acquired GKM Consultants Inc. Contingent consideration was payable dependent on the cumulative EBITDA in the three-year period post acquisition. There was no contingent consideration remaining as at 31 December 2024.  On 15 November 2022, the Group acquired Nordwest Fundamentering AS and the fair value of the remaining deferred contingent consideration payable relating to this acquisition was also £nil as at 31 December 2024.

 

Total contingent and deferred consideration of £0.9m was paid during the period. £0.7m was paid in respect of the acquisition of the 35% interest in the voting shares of Keller Company Limited in 2023 and £0.2m was paid in respect of the Voges Drilling acquisition in 2021.

 

In 2024, fair value movements of £6.4m related to a fair value adjustment of £5.2m related to Keller Company Limited, £0.8m related to GKM and £0.4m related to Nordwest Fundamentering AS. There were no fair value movements during 2023.

Payables, receivables and contract assets

For payables, receivables and contract assets with an expected maturity of one year or less, the carrying amount is deemed to reflect the fair value.

Non-qualifying deferred compensation plan assets and liabilities

 

The value of both the employee investments and those held in trust by the company are measured using Level 1 inputs per IFRS 13 ('quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date') based on published market prices at the end of the period. Adjustments to the fair value of the assets and related liabilities are recorded within net finance costs in the consolidated income statement.

 

Refer to note 18 for further information on the non-qualifying deferred compensation plan.

 

Interest rate and currency profile

The profile of the Group's financial assets and financial liabilities after taking account of the impact of hedging instruments was as follows:

	2024
	GBP	USD	EUR	CAD	AUD	Other	Total
Weighted average fixed debt interest rate (%)	-	6.4	1.4	-	-	-	6.4
Weighted average fixed debt period (years)	-	7.4	1.7	-	-	-	7.4
	2024
	GBP	USD	EUR	CAD	AUD	Other	Total
	£m	£m	£m	£m	£m	£m	£m
Fixed rate financial liabilities	-	(236.2)	(0.4)	-	-	-	(236.6)
Floating rate financial liabilities	-	-	-	-	-	-	-
Lease liabilities	(5.7)	(66.1)	(7.6)	(4.2)	(4.3)	(10.1)	(98.0)
Cash and cash equivalents	93.8	6.0	16.7	6.8	27.9	56.5	207.7
Net debt	88.1	(296.3)	8.7	2.6	23.6	46.4	(126.9)
Trade receivables	8.2	371.5	39.6	60.2	19.6	76.0	575.1
Trade payables	(6.9)	(82.9)	(27.2)	(5.6)	(3.7)	(41.7)	(168.0)
	2023
	GBP	USD	EUR	CAD	AUD	Other	Total
Weighted average fixed debt interest rate (%)	-	6.0	1.4	-	-	-	5.9
Weighted average fixed debt period (years)	-	6.7	1.3	-	-	-	6.9
	2023
	GBP	USD	EUR	CAD	AUD	Other	Total
	£m	£m	£m	£m	£m	£m	£m
Fixed rate financial liabilities	-	(293.9)	(0.8)	-	-	-	(294.7)
Floating rate financial liabilities	-	(1.4)	(1.0)	-	-	-	(2.4)
Lease liabilities	(2.1)	(57.8)	(10.2)	(5.6)	(3.7)	(12.2)	(91.6)
Cash and cash equivalents	59.7	14.6	17.5	6.2	6.7	46.7	151.4
Net debt	57.6	(338.5)	5.5	0.6	3.0	34.5	(237.3)
Trade receivables	6.8	375.7	38.1	46.0	26.0	90.5	583.1
Trade payables	(4.6)	(71.2)	(24.4)	(3.3)	(4.0)	(48.0)	(155.5)

 

Sensitivity analysis

At 31 December 2024, all borrowings are at fixed rate, therefore the only interest rate exposure is on the rate of interest earned on cash and cash equivalents. it is estimated that an increase of one percentage point in interest rates would have increased the Group's profit before taxation by approximately £0.1m (2023: £nil).

It is estimated that a general increase of 10 percentage points in the value of sterling against other principal foreign currencies would have decreased the Group's profit before taxation and non‑underlying items by approximately £21m for the year ended 31 December 2024 (2023: £14m). The estimated impact of a 10 percentage point decrease in the value of sterling is an increase of £26m (2023: £17m) in the Group's profit before taxation and non-underlying items. This sensitivity relates to the impact of retranslation of foreign earnings only. The impact on the Group's earnings of currency transaction exchange risk is not significant. These sensitivities assume all other factors remain constant.

 

27 Lease liabilities

Set out below are the carrying amounts of lease liabilities (included within note 26 within loans and borrowings) and the movements during the year:

	2024		2023
	£m		£m
At 1 January	91.6		81.0
Additions	26.4		33.9
Contract modifications	8.8		8.7
Interest expense	6.2		5.6
Payments	(34.2)		(33.9)
Exchange movements	(0.8)		(3.7)
At 31 December	98.0		91.6
Current	27.5		25.9
Non-current	70.5		65.7

 

 

28 Share capital and reserves

	2024		2023
	£m		£m
Allotted, called up and fully paid equity share capital:
73,099,735 ordinary shares of 10p each (2023: 73,099,735)	7.3		7.3

The company has one class of ordinary shares, which carries no rights to fixed income. There are no restrictions on the transfer of these shares.

The capital redemption reserve of £7.6m is a non-distributable reserve created when the company's shares were redeemed or purchased other than from the proceeds of a fresh issue of shares.

The other reserve of £56.9m is a non-distributable reserve created when merger relief was applied to an issue of shares under section 612 of the Companies Act 2006 to part-fund the acquisition of Keller Canada. The reserve becomes distributable should Keller Canada be disposed of.

 

As at 31 December 2024, the total number of shares held in treasury was 123,153 (2023: 323,133).

 

 

 

During the year to 31 December 2024, 1,454,195 ordinary shares were purchased by the Keller Group Employee Benefit Trust (2023: 500,000 purchased) to be used to satisfy future obligations of the company under the Keller Group plc Long Term Incentive Plan and 426,686 shares were utilised to satisfy the obligation in the year (2023: 515,119).  This brings the total ordinary shares held by the Employee Benefit Trust to 1,564,680 (2023: 537,171). The cost of the market purchases was £20.1m (2023: £3.4m).

There is a dividend waiver in place for both shares held in treasury and by the Keller Group Employee Benefit Trust.

 

 

29 Related party transactions

Transactions between the parent, its subsidiaries and joint operations, which are related parties, have been eliminated on consolidation. Other related party transactions are disclosed below:

 

Compensation of key management personnel

The remuneration of the Board and Executive Committee, who are the key management personnel, comprised:

	2024		2023
	£m		£m
Short-term employee benefits	8.5		8.2
Post-employment benefits	0.3		0.3
Termination payments	-		-
	8.8		8.5

Other related party transactions

As at 31 December 2024, there was a net balance of £nil (2023: £0.1m) owed by the joint venture. These amounts are unsecured, have no fixed date of repayment and are repayable on demand.

 

30 Commitments

Capital commitments

Capital expenditure contracted for at the end of the reporting period but not yet incurred was £16.9m (2023: £12.0m) and relates to property, plant and equipment purchases.

 

31 Guarantees, contingent liabilities and contingent assets

Claims and disputes arise, both in the normal course of business and in relation to the historic construction activities of the Group, some of which lead to litigation or arbitration procedures. Such claims are predominantly covered by the Group's insurance arrangements. The Group recognises provisions for liabilities when it is more likely than not that a settlement will be required and the value of such a payment can be reliably estimated.

At 31 December 2024, the Group had outstanding standby letters of credit and surety bonds for the Group's captive and other global insurance arrangements totalling £34.8m (2023: £24.5m). The Group enters into performance and advance payment bonds and other undertakings in the ordinary course of business, using guarantee facilities with financial institutions to provide these bonds to customers. At 31 December 2024, the Group has £167.1m outstanding related to performance and advanced payment bonds (2023: £182.7m). These are treated as a contingent liability until such time it becomes probable that payment will be required under the individual terms of each arrangement. It is judged to be a remote possibility that a payment will be required under any of the current performance or advance payment bonds.

 

At 31 December 2024, the Group had no contingent assets (2023: £nil).

 

 

32 Share-based payments

The Group operates a Long Term Incentive Plan (the 'Plan'). Under the Plan, Executive Directors and certain members of senior management are granted nil-cost share options with a vesting period of three years. The awards are exercised automatically on vesting, in addition the Executive Directors are subject to a two-year post-vesting holding period.

Performance share awards are granted to Executive Directors and key management personnel which are subject to performance conditions including total shareholder return, earnings per share, return on capital employed and operating profit margin. Conditional awards are granted under which senior management receive shares subject only to service conditions, ie the requirement for participants to remain in employment with the Group over the vesting period. Participants are entitled to receive dividend equivalents on these awards.

 

 

Outstanding awards are as follows:

	Number
Outstanding at 1 January 2023	1,977,177
Granted during 2023	840,572
Lapsed during 2023	(208,543)
Exercised during 2023	(520,940)
Outstanding at 31 December 2023 and 1 January 2024	2,088,266
Granted during 2024	681,046
Lapsed during 2024	(122,387)
Exercised during 2024	(652,419)
Outstanding at 31 December 2024	1,994,506
Exercisable at 1 January 2023	-
Exercisable at 31 December 2023 and 1 January 2024	-
Exercisable at 31 December 2024	-

The average share price during the year was 1,298.7p (2023: 756.5p).

Under IFRS 2, the fair value of services received in return for share awards granted is measured by reference to the fair value of share options granted. The estimate of the fair value of share awards granted is measured based on a stochastic model. The contractual life of the award is used as an input into this model, with expectations of early exercise being incorporated into the model.

The inputs into the stochastic model are as follows:	2024		2023
Share price at grant	1,006.0p		660.0p
Weighted average exercise price	0.0p		0.0p
Expected volatility	31.5%		39.6%
Expected life	3 years		3 years
Risk-free rate	4.2%		3.22%
Expected dividend yield	0.00%		0.00%

Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous three years, adjusted for any expected changes to future volatility due to publicly available information.

The Group recognised total expenses (included in operating costs) of £4.2m (2023: £4.5.m) related to equity-settled, share-based payment transactions.

The weighted average fair value of options granted in the year was 1,298.7p (2023: 756.5p). Options outstanding at the year-end have a weighted average remaining contractual life of 1.2 years (2023: 1.2 years).

 

The awards, which are taken as shares, are intended to be satisfied from shares held under the Keller Group Employee Benefit Trust (the 'Trust') or from treasury shares held. The shares held by the Trust are accounted for as a deduction from equity in retained earnings. At 31 December 2024, 1,564,680 (2023: 537,171) ordinary shares were held by the Trust with a value of £20.5m (2023: £3.9m).

 

 

33 Retirement benefit liabilities

The Group operates pension schemes in the UK and overseas.

In the UK, the Group operates the Keller Group Pension Scheme (the 'Scheme'), a defined benefit scheme, which has been closed to new members since 1999 and was closed to all future benefit accrual with effect from 31 March 2006. Under the Scheme, employees are normally entitled to retirement benefits on attainment of a retirement age of 65. The Scheme is subject to UK pensions legislation which, inter alia, provides for the regulation of work‑based pension schemes by The Pensions Regulator. The trustees are aware of and adhere to the Codes of Practice issued by The Pensions Regulator. The Scheme trustees currently comprise one member-nominated trustee and two employer-nominated trustees. An employer-nominated trustee is also the Chair of the trustees. The Scheme exposes the Group to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk, which are managed through the investment strategy to acceptable levels established by the trustees. The Scheme can invest in a wide range of asset classes including equities, bonds, cash, property, alternatives (including private equity, commodities, hedge funds, infrastructure, currency, high yield debt and derivatives) and annuity policies. Any investment in derivative instruments is only made to contribute to a reduction in the overall level of risk in the portfolio or for the purposes of efficient portfolio management. With effect from the most recent actuarial valuation date (5 April 2023), the Group agreed to pay a contribution of £1.7m in total, paid in monthly instalments from January to August 2024.  Contributions have now ceased, subject to a review of the level of employer contributions at the next actuarial review in 2026.

 In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees II Limited) ruled that certain historical amendments for contracted-out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation notice. The case was subsequently reviewed by the Court of Appeal in July 2024 which upheld the High Court's decision. The Keller Group Pension Scheme was contracted out of the additional state pension between 1997 and 2016.  Following a review of the scheme amendments during the relevant period, the Group has not identified any amendments where further investigation is required as a result of that Court of Appeal judgement.

The Group has two UK defined contribution retirement benefit schemes. There were no contributions outstanding in respect of these schemes at 31 December 2024 (2023: £nil). The total UK defined contribution pension charge for the year was £1.7m (2023: £1.8m).

The Group has defined benefit retirement obligations in Germany and Austria. Under these schemes, employees are entitled to retirement benefits on attainment of a retirement age of 65, provided they have either five or ten years of employment with the Group, depending on the area or field they are working in. The amount of benefit payable depends on the grade of the employee and the number of years of service. Benefits under these schemes only apply to employees who joined the Group prior to 1997. These defined benefit retirement obligations are funded on the Group's balance sheet and obligations are met as and when required by the Group.

The Group has a number of end of service schemes in the Middle East as required by local laws and regulations. The amount of benefit payable depends on the current salary of the employee and the number of years of service. These retirement obligations are funded on the Group's balance sheet and obligations are met as and when required by the Group.

The Group operates a defined contribution scheme for employees in North America, where the Group is required to match employee contributions up to a certain level in accordance with the scheme rules. The total North America pension charge for the year was £9.0m (2023: £8.6m).

In Australia, there is a defined contribution scheme where the Group is required to ensure that a prescribed level of superannuation support of an employee's notional base earnings is made. This prescribed level of support is currently 11.5% (2023: 11.0%). The total Australian pension charge for the year was £5.1m (2023: £4.8m).

 

Details of the Group's defined benefit schemes are as follows:

	The Keller Group Pension	The Keller Group Pension	German,1 Austrian and other	German,1 Austrian and other
	Scheme (UK)	Scheme (UK)	schemes	schemes
	2024	2023	2024	2023
	£m	£m	£m	£m
Present value of the scheme liabilities	(37.0)	(41.8)	(15.2)	(16.2)
Fair value of assets	43.3	46.0	-	-
Surplus/(deficit) in the scheme	6.3	4.2	(15.2)	(16.2)
Irrecoverable surplus	(6.3)	(5.7)	-	-
Net defined benefit liability	-	(1.5)	(15.2)	(16.2)

 

1              Included in this balance is £3.7m (2023: £3.6m) in relation to the end of service schemes in the Middle East.

For the Keller Group Pension Scheme, based on the net deficit of the Scheme as at 31 December 2024 and the committed payments under the Schedule of Contributions agreed on 15 December 2023, there is a irrecoverable surplus of £6.3m (2023: £5.7m). Management is of the view that, based on the Scheme rules, it does not have an unconditional right to a refund of a surplus under IFRIC 14. The minimum funding requirement is equal to the IAS 19 surplus as there are no further employer contributions to be paid under the current Schedule of Contributions. The contributions will be reviewed following the next actuarial review to be prepared as at 5 April 2026.

The value of the scheme liabilities has been determined by the actuary using the following assumptions:

	The Keller Group Pension Scheme (UK)	The Keller Group Pension Scheme (UK)	German and Austrian schemes	German and Austrian  schemes
	2024	2023	2024	2023
	%	%	%	%
Discount rate	5.6	4.6	3.3	3.4
Interest on assets	5.6	4.6	-	-
Rate of increase in pensions in payment	3.6	3.5	2.5	2.5
Rate of increase in pensions in deferment	2.8	2.8	2.6	6.9
Rate of inflation	3.5	3.4	2.6	6.9

The mortality rate assumptions are based on published statistics. The average remaining life expectancy, in years, of a pensioner retiring at the age of 65 at the balance sheet date is:

	The Keller Group Penson Scheme (UK)	The Keller Group Pension Scheme (UK)	German and Austrian schemes	German and Austrian schemes
	2024	2023	2024	2023
Male currently aged 65	21.3	21.2	22.5	22.4
Female currently aged 65	24.1	24.0	25.4	25.3

 

 

The assets of the schemes were as follows:

	The Keller Group Pension Scheme (UK)		The Keller Group Pension Scheme (UK)	German, Austrian and other schemes	German, Austrian and other schemes
	2024		2023	2024	2023
	£m		£m	£m	£m
Equities		2.2	6.6	-	-
Target return funds1		14.0	6.0	-	-
Bonds		20.4	18.7	-	-
Liability driven investing (LDI) portfolios2		6.4	14.0	-	-
Cash		0.3	0.7	-	-
		43.3	46.0	-	-

 

1         A diversified growth fund split between mainly UK listed equities, bonds and alternative investments which are capped at 20% of the total fund. 

2              A portfolio of gilt and swap contracts, backed by investment-grade credit instruments, that is designed to hedge the majority of the interest rate and inflation risks associated with the Schemes'     obligations.

 

	The Keller Group Pension Scheme (UK)	The Keller Group Pension Scheme (UK)	German,1 Austrian and other schemes	German,1 Austrian and other schemes
	2024	2023	2024	2023
	£m	£m	£m	£m
Changes in scheme liabilities
Opening balance	(41.8)	(39.0)	(16.2)	(16.7)
Current service cost	-	-	(0.7)	(1.2)
Interest cost	(1.8)	(1.8)	(0.4)	(0.5)
Benefits paid	2.3	2.1	1.2	1.7
Exchange movements	-	-	0.6	0.5
Experience loss on defined benefit obligation	(0.1)	(1.0)	-	-
Changes to demographic assumptions	-	(0.7)	-	-
Changes to financial assumptions	4.4	(1.4)	0.3	-
Closing balance	(37.0)	(41.8)	(15.2)	(16.2)
Changes in scheme assets
Opening balance	46.0	42.2	-	-
Interest on assets	2.0	2.0	-	-
Administration costs	(0.2)	(0.3)	-	-
Employer contributions	1.6	2.9	-	-
Benefits paid	(2.3)	(2.1)	-	-
Return on plan assets less interest	(3.8)	1.3	-	-
Closing balance	43.3	46.0	-	-
Actual return on scheme assets	(1.8)	3.3	-	-
Statement of comprehensive income
Return on plan assets less interest	(3.8)	1.3	-	-
Experience loss on defined benefit obligation	(0.1)	(1.0)	-	-
Changes to demographic assumptions	-	(0.7)	-	-
Changes to financial assumptions	4.4	(1.4)	0.3	-
Change in irrecoverable surplus	(0.6)	1.6	-	-
Remeasurements of defined benefit plans	(0.1)	(0.2)	0.3	-
Cumulative remeasurements of defined benefit plans	(25.9)	(25.8)	(6.1)	(6.4)
Expense recognised in the income statement
Current service cost	-	-	(0.7)	(1.2)
Administration costs	(0.2)	(0.3)	-	-
Operating costs	(0.2)	(0.3)	(0.7)	(1.2)
Net pension interest cost	0.2	0.2	(0.4)	(0.5)
Expense recognised in the income statement	-	(0.1)	(1.1)	(1.7)
Movements in the balance sheet liability
Net liability at start of year	1.5	4.1	16.2	16.7
Expense recognised in the income statement	-	0.1	1.1	1.7
Employer contributions	(1.6)	(2.9)	-	-
Benefits paid	-	-	(1.2)	(1.7)
Exchange movements	-	-	(0.6)	(0.5)
Remeasurements of defined benefit plans	0.1	0.2	(0.3)	-
Net liability at end of year	-	1.5	15.2	16.2

 

1               Other comprises end of service schemes in the Middle East of £3.7m (2023: £3.6m).

 

 

A reduction in the discount rate of 0.5% would increase the deficit in the schemes by £2.0m (2023: £2.6m), whilst a reduction in the inflation assumption of 0.5%, including its impact on the revaluation in deferment and pension increases in payment, would decrease the deficit by £1.1m (2023: £1.3m). A decrease in the mortality rate by one year would decrease the deficit in the schemes by £1.6m. Note that these sensitivities do not include end of service schemes in the Middle East as these are not material to the Group.

 

The weighted average duration of the defined benefit obligation is approximately 13 years for the UK scheme and 12 years for the German and Austrian schemes. The history of experience adjustments on scheme assets and liabilities for all the Group's defined benefit pension schemes, including the end of service schemes in the Middle East, are as follows:

	2024		2023		2022		2021		2020
	£m		£m		£m		£m		£m
Present value of defined benefit obligation	(52.4)		(58.0)		(55.7)		(77.2)		(86.9)
Fair value of scheme assets	43.5		46.0		42.2		63.7		58.0
Deficit in the schemes	(8.9)		(12.0)		(13.5)		(13.5)		(28.9)
Irrecoverable surplus	(6.3)		(5.7)		(7.3)		(12.2)		(2.2)
Net defined benefit liability	(15.2)		(17.7)		(20.8)		(25.7)		(31.1)
Experience adjustments on scheme liabilities	4.3		(3.1)		21.1		6.6		(7.9)
Experience adjustments on scheme assets	3.8		1.3		(23.2)		4.6		6.1

 

 

34 Non-controlling interests

Financial information of subsidiaries that have a material non-controlling interest is provided below:

Name	Country of incorporation	2024	2023
Keller Fondations Speciales SPA	Algeria	49%	49%

Profit/(loss) attributable to non-controlling interests:

		2024	2023
		£m	£m
Keller Fondations Speciales SPA		0.3	(0.2)
Keller Company Limited		-	0.4
Other interests		0.1	0.2
		0.4	0.4

Share of net assets of non-controlling interests:

		2024	2023
		£m	£m
Keller Fondations Speciales SPA		2.7	2.4
Other interests		0.3	0.3
		3.0	2.7

 

Aggregate amounts relating to material non-controlling interests:

		2024	2023	2023
		£m	£m	£m
		Keller	Keller	Keller
		Fondations	Fondations	Company
		Speciales SPA	Speciales SPA	Limited
Revenue		1.5	0.9	14.3
Operating costs		(1.1)	(1.0)	(13.9)
Operating loss		0.4	(0.1)	0.4
Finance costs		-	-	-
Loss before taxation		0.4	(0.1)	0.4
Taxation		(0.1)	(0.1)	-
Profit/(loss) attributable to non-controlling interests		0.3	(0.2)	0.4

 

 

		2024	2023	2023
		£m	£m	£m
		Keller	Keller	Keller
		Fondations	Fondations	Company
		Speciales SPA	Speciales SPA	Limited
Non-current assets		0.5	0.6	-
Current assets		2.9	2.4	-
Current liabilities		(0.7)	(0.6)	-
Non-current liabilities		-	-	-
Share of net assets		2.7	2.4	-

 

On 29 August 2023, the Group acquired the 35% interest in the voting shares of Keller Company Limited (formerly Keller Turki Company Limited), increasing its ownership interest to 100%. An initial cash consideration of £6.4m (SAR 30m) was paid to the non-controlling shareholders. In addition, a contingent consideration has been agreed as part of the purchase agreement and is payable annually between the years 2023 and 2027, dependent on the qualifying revenue generated by the business for each of those years. The fair value of the contingent consideration was £9.3m (SAR 43.2m) based on expected revenue generated by the business over that period, which is the maximum amount of contingent consideration payable. Subsequent to this, during 2024, the fair value of this contingent consideration has been reduced by £5.2m (SAR 24.8m).

 

The carrying value of the net assets of Keller Company Limited was £0.2m (SAR 0.8m). The following is a schedule of additional interest acquired in Keller Company Limited in 2023.

 

					£m
Cash consideration paid to non-controlling shareholders					6.4
Contingent consideration					9.3
Group loan					(0.7)
Carrying value of the additional interest in Keller Company Limited					0.2
Difference recognised in retained earnings in 2023					15.2

                                                                

As at 31 December 2024, the fair value of the contingent consideration was £3.2m (SAR15.1m). Refer to note 26 for further information.

 

 

35 Post balance sheet events

 

There were no material post balance sheet events between the balance sheet date and the date of this report.

 

Adjusted performance measures

The Group's results as reported under International Financial Reporting Standards (IFRS) and presented in the consolidated financial statements (the 'statutory results') are significantly impacted by movements in exchange rates relative to sterling, as well as by exceptional items and non-trading amounts relating to acquisitions.

As a result, adjusted performance measures have been used throughout the Annual Report and Accounts to describe the Group's underlying performance. The Board and Executive Committee use these adjusted measures to assess the performance of the business because they consider them more representative of the underlying ongoing trading result and allow more meaningful comparison to prior year.

Underlying measures

The term 'underlying' excludes the impact of items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired intangible assets and other non-trading amounts relating to acquisitions and disposals (collectively 'non-underlying items'), net of any associated tax. Underlying measures allow management and investors to compare performance without the potentially distorting effects of one-off items or non-trading items. Non-underlying items are disclosed separately in the consolidated financial statements where it is necessary to do so to provide further understanding of the financial performance of the Group.

Constant currency measures

The constant currency basis ('constant currency') adjusts the comparative to exclude the impact of movements in exchange rates relative to sterling. This is achieved by retranslating the 2023 results of overseas operations into sterling at the 2024 average exchange rates.

A reconciliation between the underlying results and the reported statutory results is shown on the face of the consolidated income statement, with non-underlying items detailed in note 9 to the consolidated financial statements. A reconciliation between the 2023 underlying result and the 2023 constant currency result is shown below and compared to the underlying 2024 performance:

Revenue by segment

	2024		20231
	Statutory		Statutory	Impact of exchange movements	Constant currency	Statutory  change	Constant currency change
	£m		£m	£m	£m	%	%
North America	1,785.8		1,770.0	(56.5)	1,713.5	+0.9	+4.2
Europe and Middle East	835.1		808.0	(16.2)	791.8	+3.3	+5.5
Asia-Pacific	365.8		388.0	(14.2)	373.8	-5.7	-2.1
Group	2,986.7		2,966.0	(86.9)	2,879.1	+0.7	+3.7

Underlying operating profit by segment

 

	2024		20231
	Underlying		Underlying	Impact of exchange movements	Constant currency	Underlying change	Constant currency  change
	£m		£m	£m	£m	%	%
North America	190.0		169.6	(5.9)	163.7	+12.0	+16.1
Europe and Middle East	7.9		9.8	(0.2)	9.6	-19.4	-17.7
Asia-Pacific	28.7		14.6	(0.5)	14.1	+96.6	+103.5
Central items	(14.0)		(13.1)	-	(13.1)	+6.9	+6.9
Group	212.6		180.9	(6.6)	174.3	+17.5	+22.0

¹        From 1 January 2024, the Middle East and Africa (MEA) business was transferred to the Europe division, creating the Europe and Middle East Division, and the remaining Asia-Pacific, Middle East and Africa Division became the Asia-Pacific Division. The 2023 comparative segmental information has been updated to reflect this change as it is consistent with the information reviewed by the Chief Operating Decision Maker.

Underlying operating margin

Underlying operating margin is underlying operating profit as a percentage of revenue.

 

 

Other adjusted measures

Where not presented and reconciled on the face of the consolidated income statement, consolidated balance sheet or consolidated cash flow statement, the adjusted measures are reconciled to the IFRS statutory numbers below:

EBITDA (statutory)

	2024		2023
	£m		£m
Underlying operating profit	212.6		180.9
Depreciation and impairment of owned property, plant and equipment	78.8		81.8
Depreciation and impairment of right-of-use assets	29.9		30.0
Amortisation of intangible assets	0.1		0.4
Underlying EBITDA	321.4		293.1
Non-underlying items in operating costs (excluding goodwill impairment)	(10.6)		(10.8)
Non-underlying items in other operating income	6.4		0.8
EBITDA	317.2		283.1

 

 

EBITDA (IAS 17 covenant basis)

	2024		2023
	£m		£m
Underlying operating profit	212.6		180.9
Depreciation and impairment of owned property, plant and equipment	78.8		81.8
Depreciation and impairment of right-of-use assets	29.9		30.0
Legacy IAS 17 operating lease charges	(34.3)		(33.8)
Amortisation of intangible assets	0.1		0.4
Underlying EBITDA	287.1		259.3
Non-underlying items in operating costs (excluding goodwill impairment)	(10.6)		(10.8)
Non-underlying items in other operating income	6.4		0.8
EBITDA	282.9		249.3

 

Net finance costs

	2024		2023
	£m		£m
Finance income	(6.6)		(1.8)
Underlying finance costs	27.8		29.3
Net finance costs (statutory)	21.2		27.5
Exclude: Finance charge on lease liabilities1	(6.2)		(5.6)
Lender covenant adjustments	(0.8)		(0.8)
Net finance costs (IAS 17 covenant basis)	14.2		21.1

1        Excluding legacy IAS 17 finance leases.

Net capital expenditure

		2024		2023
		£m		£m
Acquisition of property, plant and equipment		89.0		94.3
Acquisition of other intangible assets		-		0.2
Proceeds from sale of property, plant and equipment		(29.0)		(20.9)
Net capital expenditure		60.0		73.6

Net debt

	2024		2023
	£m		£m
Current loans and borrowings	27.5		86.8
Non-current loans and borrowings	307.1		301.9
Cash and cash equivalents	(207.7)		(151.4)
Net debt (statutory)	126.9		237.3
Lease liabilities1	(97.4)		(91.1)
Net debt (IAS 17 covenant basis)	29.5		146.2

1        Excluding legacy IAS 17 finance leases.

 

 

 

 

Leverage ratio

The leverage ratio is calculated as net debt to underlying EBITDA.

Statutory

	2024 £m		2023 £m
Net debt	126.9		237.3
Underlying EBITDA	321.4		293.1
Leverage ratio (x)	0.4		0.8

IAS 17 covenant basis

	2024 £m		2023 £m
Net debt	29.5		146.2
Underlying EBITDA	287.1		259.3
Leverage ratio (x)	0.1		0.6

 

Order book

The Group's disclosure of its order book is aimed to provide insight into its backlog of work and future performance. The Group's order book is not a measure of past performance and therefore cannot be derived from its consolidated financial statements. The Group's order book comprises the unexecuted elements of orders on contracts that have been awarded. Where a contract is subject to variations, only secured variations are included in the reported order book.

Free cash flow

The calculation of free cash flow is set out in the CFO section of the Strategic report and is reconciled to movements in the consolidated cash flow statement and other movements in net debt as set out below.

	2024		2023
	£m		£m
Net cash inflow from operating activities	265.9		197.0
Net cash outflow from investing activities	(57.7)		(70.7)
Exclude: Cash inflows from non-underlying items - historic claims	(1.4)		-
Cash outflows from non-underlying items - ERP costs	4.9		7.5
Cash outflows from non-underlying items - restructuring costs	4.9		1.2
Cash outflows from non-underlying items - contract dispute	-		3.7
Acquisition of subsidiaries, net of cash acquired	0.9		0.2
Disposal of subsidiaries	2.6		(1.3)
Include: Increase in net debt from new leases	(26.4)		(33.9)
Increase in net debt from amortisation of deferred finance costs	(1.1)		(0.5)
Free cash flow	192.6		103.2

 

 

 

 

Financial record

 

	2015				2016	2017	2018	2019	2020	2021	2022	2023	2024
	£m				£m	£m	£m	£m	£m	£m	£m	£m	£m
Consolidated income statement
Continuing operations
Revenue		1,562.4			1,780.0	2,070.6	2,224.5	2,300.5	2,062.5	2,222.5	2,944.6	2,966.0	2,986.7
Underlying EBITDA		155.5			158.6	177.2	167.5	198.4	205.0	185.9	205.6	293.1	321.4
Underlying operating profit		103.4			95.3	108.7	96.6	103.8	110.1	88.5	108.6	180.9	212.6
Underlying net finance costs		(7.7)			(10.2)	(10.0)	(16.1)	(22.5)	(13.2)	(8.9)	(15.1)	(27.5)	(21.2)
Underlying profit before taxation		95.7			85.1	98.7	80.5	81.3	96.9	79.6	93.5	153.4	191.4
Underlying taxation		(33.0)			(29.8)	(24.7)	(22.5)	(22.4)	(28.3)	(18.9)	(20.3)	(38.8)	(43.9)
Underlying profit for the year		62.7			55.3	74.0	58.0	58.9	68.6	60.7	73.2	114.6	147.5
Non-underlying items1		(36.4)			(7.3)	13.5	(71.8)	(37.2)	(27.5)	(5.1)	(28.2)	(24.8)	(4.8)
Profit/(loss) for the year		26.3			48.0	87.5	(13.8)	21.7	41.1	55.6	45.0	89.8	142.7
Underlying EBITDA (IAS 17 covenant basis)		155.5			158.6	177.2	167.5	170.8	175.0	153.2	177.7	259.3	287.1
Consolidated balance sheet
Working capital		97.1			152.5	181.3	225.4	200.9	180.3	149.6	303.4	261.5	232.0
Property, plant and equipment		331.8			405.6	399.2	422.0	460.6	434.9	443.4	486.5	480.2	461.4
Intangible and other non-current assets		183.0			218.2	198.3	179.5	192.3	183.5	232.0	203.1	185.9	204.3
Net debt (statutory)		(183.0)			(305.6)	(229.5)	(286.2)	(289.8)	(192.5)	(193.3)	(298.9)	(237.3)	(126.9)
Other net assets/liabilities		(94.9)			(41.1)	(77.1)	(114.2)	(166.5)	(196.2)	(203.7)	(197.3)	(172.3)	(174.1)
Net assets		334.0			429.6	472.2	426.5	397.5	410.0	428.0	496.8	518.0	596.7
Net debt (IAS 17 covenant basis)		(183.0)			(305.6)	(229.5)	(286.2)	(213.1)	(120.9)	(119.4)	(218.8)	(146.2)	(29.5)
Underlying key performance indicators
Diluted earnings per share from continuing operations (p)			85.4		74.8	101.8	79.1	81.3	96.3	84.2	100.7	153.9	199.9
Dividend per share (p)			27.1		28.5	34.2	35.9	35.9	35.9	35.9	37.7	45.2	49.7
Operating margin			6.6%		5.4%	5.2%	4.3%	4.5%	5.3%	4.0%	3.7%	6.1%	7.1%
Return on capital employed2			20.5%		15.3%	15.1%	13.2%	14.4%	16.4%	13.9%	14.9%	22.8%	28.2%
Net debt: EBITDA (statutory)			1.2x		1.9x	1.3x	1.7x	1.5x	0.9x	1.0x	1.5x	0.8x	0.4x
Net debt: EBITDA (IAS 17 covenant basis)			1.2x		1.9x	1.3x	1.7x	1.2x	0.7x	0.8x	1.2x	0.6x	0.1x

 

1        Non-underlying items are items which are exceptional by their size and/or are non-trading in nature and are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial position of the Group.

2        Calculated as underlying operating profit expressed as a percentage of average capital employed. 'Capital employed' is net assets before non-controlling interests plus net debt and net defined benefit retirement liabilities.