Keller Group PLC Annual Financial Report

 
TIDMKLR 
 
11 April 2019 
 
Keller Group plc 
 
Annual Report and Financial Statements for the year ended 31 December 2018 and 
Notice of 2019 Annual General Meeting 
 
Keller Group plc, the world's largest geotechnical specialist contractor, 
announces that its Annual General Meeting will be held at 11.00am on Thursday 
16 May 2019 at Leonardo Royal St. Paul's Hotel, 10 Godliman Street, London EC4V 
5AJ (formerly known as 'The Grange St Paul's). 
 
In connection with this, the following documents have been posted or made 
available to shareholders today: 
 
·      Annual Report and Accounts for the year ended 31 December 2018 ("Annual 
Report") 
 
·      Notice of Annual General Meeting 
 
·      Proxy Form (in the case of shareholders on the register of members) 
 
A copy of these documents has been submitted to the National Storage Mechanism 
and will shortly be available for inspection at http://www.morningstar.co.uk/uk 
/. 
 
Copies of the Annual Report and Notice of Annual General Meeting are now 
available to view on the Company's corporate website at www.keller.com. 
 
In accordance with DTR 6.3.5, this announcement contains information in the 
attached Appendix of the principal risk factors, the directors' responsibility 
statement and a note to the accounts on related party transactions.   This 
information has been extracted in full unedited text from the Annual Report 
2018.  References to page numbers and notes in the Appendix refer to those in 
the Annual Report 2018.  A condensed set of financial statements was appended 
to Keller Group plc's preliminary results announcement issued on 4 March 2019. 
 
For further information, please contact: 
 
Keller Group plc                           www.keller.com 
 
Kerry Porritt, Group Company Secretary and Legal Advisor             020 7616 
7575 
 
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 six continents, Keller tackles an unrivalled 7,000 projects every year, 
generating annual revenue of more than GBP2bn. 
 
LEI number:        549300QO4MBL43UHSN10 
 
Classification:     1.1 
 
                                   Appendix 
 
                   Unedited extract from Annual Report 2018 
 
Principal risks and uncertainties 
 
Risk              Potential Impact     Mitigation         Risk Movement 
 
Financial risk 
 
Inability to 
finance our       Breach of banking    Procedures to      Negotiated new 
business          covenants or failure monitor the        syndicated revolving 
Losing access to  to continue in       effective          credit facility on 
the financing     business or meet our management of cash improved terms and 
facilities        liabilities          and debt,          rates totalling GBP375m 
necessary to fund                      including weekly   with a maturity of 
the business.                          cash reports and   five years to November 
                                       regular cash       2023, incorporating 
                                       forecasting.       two additional one 
                                                          year extension options 
                                                          and a GBP200m accordion; 
                                                          annual bonus plan 
                                                          linked to executive 
                                                          remuneration through 
                                                          new operating cash 
                                                          metric; management 
                                                          programme to reduce 
                                                          net debt. 
 
Market risk 
 
A rapid downturn 
in our markets    Failure to continue  Diversification of 
Inability to      in operation or to   our markets, both 
maintain a        meet our             in terms of 
sustainable level liabilities.         geography and 
of financial                           market segment. 
performance                            Strong balance 
throughout the                         sheet. 
construction                           Leveraging the 
industry market                        global scale of 
cycle which grows                      our group. 
more than many                         Having strong 
other industries                       local businesses 
during periods of                      to address 
economic                               geographic 
expansion and                          markets. 
falls harder than 
many other 
industries when 
the economy 
contracts. 
 
Strategic risks 
 
Failure to 
procure new       Failure to achieve   Continually 
contracts         targets for revenue, analysing our 
A failure to      profit and earnings. existing and 
continue to win                        target markets to 
and retain                             ensure we 
contracts on                           understand the 
satisfactory                           opportunities that 
terms and                              they offer. 
conditions in our                      Structured bid 
existing and new                       review processes 
target markets if                      in operation 
competition                            throughout the 
increases,                             group with 
customer                               well-defined 
requirements                           selectivity 
change or demand                       criteria that are 
reduces due to                         designed to ensure 
general adverse                        we take on 
economic                               contracts only 
conditions.                            where we 
                                       understand and can 
                                       manage the risks 
                                       involved. 
 
Losing our market Failure to achieve   Continually 
share             targets for revenue, seeking to 
Inability to      profits and          differentiate our 
achieve           earnings.            offering through 
sustainable                            service quality, 
growth, whether                        value for money 
through                                and innovation. 
acquisition, new 
products, new                          A Business 
geographies or                         Development 
industry specific                      function focusing 
solutions.                             on our customers' 
                                       requirements and 
                                       understanding our 
                                       competitors. 
 
                                       Minimising the 
                                       risk of 
                                       acquisitions, 
                                       including getting 
                                       to know a target 
                                       company in 
                                       advance, often 
                                       working in joint 
                                       venture, to 
                                       understand the 
                                       operational and 
                                       cultural 
                                       differences and 
                                       potential 
                                       synergies, as well 
                                       as undertaking 
                                       these through due 
                                       diligence and 
                                       structured and 
                                       carefully managed 
                                       integration plans. 
 
                                       Implementing 
                                       annual efficiency 
                                       and improvement 
                                       programmes to help 
                                       us remain 
                                       competitive. 
 
Non-compliance    Losing the trust of  Having clear 
with our Code of  our customers,       policies and 
Business Conduct  suppliers and other  procedures in 
Not maintaining   stakeholders with    respect of ethics, 
high standards of consequent adverse   integrity, 
ethics and        effects on our       regulatory 
compliance in     ability to deliver   requirements and 
conducting our    against our strategy contract 
business or       and business         management. 
failing to meet   objectives.          Maintaining 
legal or          Substantial damage   training 
regulatory        to Keller's brand    programmes to 
requirements.     and/or large         ensure our people 
                  financial penalties. fully understand 
                                       these policies and 
                                       requirements. 
                                       Operating and 
                                       encouraging the 
                                       use of a 
                                       'whistleblowing' 
                                       facility. 
 
Operational risks 
 
Product and/or 
solution failure  Financial loss and   Continuing to 
Failure of our    consequent damage to enhance our 
product and/or    our brand            technological and 
solution to       reputation.          operational 
achieve the                            capabilities 
required                               through investment 
standard.                              in our product 
                                       teams, project 
                                       managers and our 
                                       engineering 

                                       capabilities. 
 
Ineffective       Failure to achieve   Ensuring we        Increased complexity 
management of our the margins, profits understand all of  and scale of contracts 
contracts         and cash flows we    our risks through  demands resources and 
Failure to manage expect from          the bid appraisal  capabilities that are 
our contracts to  contracts.           process and        not yet embedded in 
ensure that they                       applying rigorous  all of our regions and 
are delivered on                       policies and       business units. The 
time and to                            processes to       volatility of contract 
budget.                                manage and monitor performance increased 
                                       contract           during 2018. 
                                       performance. 
                                       Ensuring we have 
                                       high-quality 
                                       people delivering 
                                       projects. 
 
Causing a serious Damage to employee   A Board-led        Key performance 
injury or         morale leading to an commitment to      indicators continue to 
fatality to an    increase in employee achieve zero       improve, however, the 
employee or       turnover rates, loss accidents.         group suffered three 
member of the     of customer,         Visible management fatalities in 2018. 
public            supplier and partner commitment with    The upper limits for 
Failure to        confidence and       Safety Tours,      fines and scope for 
maintain high     damage to our brand  Safety Audits and  prosecution have 
standards of      reputation in an     Safety Action      increased. 
Safety and        area that we regard  Groups. 
Quality           as a top priority.   Implementing 
                                       management systems 
                                       that conform to 
                                       Occupational 
                                       Health & Safety 
                                       Assessment System 
                                       18001. 
                                       Extensive 
                                       mandatory employee 
                                       training 
                                       programmes. 
 
Not having the    Failure to maintain  Continuing to 
right skills to   satisfactory         develop and 
deliver           performance in       implement 
Inability to      respect of our       leadership, 
attract and       current              personal 
develop excellent contracts and        development and 
people to create  failure to deliver   employee 
a high-quality,   our strategy and     engagement 
vibrant, diverse  business targets for programmes that 
and flexible      growth.              encourage and 
workforce.                             support all our 
                                       people to achieve 
                                       their full 
                                       potential. 
 
Responsibility statement of the Directors in respect of the Annual Report and 
the financial statements 
 
We confirm that to the best of our knowledge: 
 
  * The financial statements, prepared in accordance with the applicable set of 
    accounting standards, give a true and fair view of the assets, liabilities, 
    financial position and profit or loss of the Company and the undertakings 
    included in the consolidation as a whole; and 
  * The Strategic report and Directors' report, including content contained by 
    reference, includes a fair review of the development and performance of the 
    business and the position and performance of the company and the 
    undertakings included in the consolidation taken as a whole, together with 
    a description of the principal risks and uncertainties that they face. 
 
The Board confirms that the Annual Report and Accounts, taken as a whole, is 
fair, balanced and understandable and provides the information necessary for 
shareholders to assess the group's position and performance, business model and 
strategy. 
 
26 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: 
 
                                    2018          2017 
                                    GBPm            GBPm 
 
Short-term employee benefits        5.1           6.3 
 
Post-employment benefits            0.4           0.5 
 
Termination payments                1.4           - 
 
Share-based payments                -             0.8 
 
                                    6.9           7.6 
 
Other related party transactions 
 
As at the year-end there was a net balance of GBP1.1m (2017: GBP2.0m) owed by the 
joint venture. These amounts are unsecured, have no fixed date of repayment and 
are repayable on demand. There were no sales by the group to joint ventures 
during the period. 
 
 
 
END 
 

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April 11, 2019 02:00 ET (06:00 GMT)