Ground engineering specialist, Keller Group has issued a profits warning to the City and said it planned to close one of its UK offices.
However, in an interim management statement for the period from July 1 to 14 November, the firm said cost controls would put it in a strong position to rebound once the economy recovers.
Justin Atkinson, chief executive praised the UK management team and said he looked forward to a rosy 2012-2013 – including work on Crossrail and Victoria Station.
“The UK management team has done well to position itself for the big work which is coming around,” he said. “While the day to day business remains tough we have some good work around the corner.”
The group, which operates in Europe, the US and Australia, said its full-year revenue would meet market expectations of about £1.15 billion. However current market conditions had damaged profitability.
“The Board now expects the 2011 full-year profit before tax to be below market expectations and in the range of £21m to £23m,” the statement said.
“Looking further ahead, the Group’s order book at the end of October was around 20% up on the same time last year, underpinned by some very large projects in the UK and Australia. However, the current macro-economic conditions mean that the outlook for construction markets, particularly in Europe, remains uncertain. In this environment, we will continue to exercise caution in our management of costs and to focus on risk management, the most efficient use of our resources and maximizing cash generation.”
The statement added that the UK market continued to face acute problems. The firm is set to close its St Helens regional office, leaving offices in Canterbury, Weatherby, Cheltenham and London. The office’s ten staff are in consultation for redundancy.
“The underlying UK construction market remains extremely difficult and we continue to take action accordingly. Last week, we took the decision to close another of our UK offices, the third regional office to be closed in the last two years,” the statement said.
“As previously announced, our UK business won a number of major infrastructure contracts in the summer. We have now started our work at the projects for Crossrail although, as expected, this and the major work in connection with the Victoria Station Upgrade will not make a significant contribution to the UK results until 2012.”