Keller is still suffering from falling margins and flat sales as it continues to restructure, and expects to spend £3 million on redundancies this year.
In a statement to the Stock Exchance this morning, the ground engineering firm said its core developed markets were still “difficult” and redundancy charges would be £3m for the financial year to 31 December 2009.
It said trading in the four-month period to the end of October had been flat when compared to last year. This is a significant improvement on the 14 per cent decline in sales experienced earlier in the year.
Despite the stabilisation in sales, the firm expects margins to fall. The statement said: “As anticipated at the time of the half-year results, intense competition in the group’s mature markets has meant that margins have remained under pressure.
“Management is implementing further cost reduction measures in its more difficult markets, which will result in a total of £3m of redundancy and other reorganisation costs in 2010, most of which will be incurred in the final quarter. After taking account of these charges, the board expects the 2010 full-year results to be around the bottom end of the current range of market expectations.”
This warning has hit Keller’s shares hard in early trading. Its shares were trading at 548.5p at 9:30 this morning, down 8 per cent.
Keller had net debt of £109m at the end of October, down from £121m at the end of June.