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Keller posts exceptional profit after recouping £35m of dispute losses

Keller has posted a rise in half-year revenues to touching distance of £1bn as the firm recouped losses from its troubled wine warehouse contract.

Turnover at the ground engineering firm hit £991.1m for the half-year, compared with £849.7m for the same period of 2016.

The ground engineering specialist also announced that it had returned better-than-expected results from the sale of its wine warehouse and processing facility near Bristol earlier this year. 

It recorded an exceptional profit of £21m connected to the sale of the freehold of the Avonmonth property, and to insurance payments related to the contract dispute.

Keller announced the sale of the warehouse in a trading update in May, confirming that it had sold the freehold of the building for £62m to CSUK Holdings and CSUK1 Investments.

The decision to sell came after a long-running dispute with VolkerFitzpatrick over the construction of the facility.

In its half-year results Keller said: “Taking account of credits in both 2016 and the first half of 2017, the group has recovered £35.3m of the original £54m provision.

“No significant further recoveries are expected. The net cash cost to date of this dispute is £14.3m.”

Underlying operating profit increased 24 per cent from £35.6m to £44m, driven in part by the fall in the value of sterling.

Revenue from North America, which accounts for around half of group revenue, totalled £474.5m in the six months. This was up 2 per cent year on year but down 10 per cent when calculated on a constant currency basis, which takes into account movements in exchange rates. 

Keller’s order book also expanded by 20 per cent to £1.1bn.

Commenting on the results, Keller chief executive Alain Michaelis said: “From a financial perspective, our results show significant overall profit growth and we have ended the half year with a record order book.

“As a result, the board is confident that the group’s full year 2017 results will be in line with its expectations.”

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