Keller Group PLC Statement on the business impact of the COVID-19 (4705H)

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RNS Number : 4705H

Keller Group PLC

25 March 2020

For immediate release

25 March 2020

Keller Group plc

Statement on the business impact of the coronavirus (COVID-19)

Keller Group plc ("Keller", or "the group"), the world's largest geotechnical specialist contractor, today provides an update in relation to the impact of COVID-19, including measures it is taking to actively manage the risks to its employees and operations to support the business to withstand this period of uncertainty.

Our priority is the health and safety of our employees. Keller employs over 10,000 people globally, across 23 business units in 40 countries and six continents. The guidance and advice we are providing employees, follows World Health Organisation guidelines and is supplemented by local authority guidance in the regions in which we operate. We have also established an Executive Committee sub-committee to regularly review and update our advice to employees, establish business continuity planning, and to ensure divisional oversight is effective and properly coordinated.

Our business has a diverse revenue stream, our raw materials are generally commoditised and sourced locally to our operations, the workforce is dispersed and flexible by nature. The major impact to date of the COVID-19 pandemic for the group is travel and activity restrictions invoked by national and local governments as part of their virus containment initiatives, and in the longer term by an expected reduction in the global macroeconomic demand.

Trading in January and February was largely unaffected by COVID-19 and was marginally ahead of our expectations. In late March, market conditions deteriorated swiftly which have impacted trading, particularly in European countries within our EMEA division due to national and regional restrictions. However, we currently expect overall group performance in the first quarter to be broadly in line with our expectations.

Looking forward, the situation is now becoming more challenging in North America, where the ability to continue to operate is subject to increasingly onerous state specific restrictions and lockdowns, and we expect this deteriorating trend to continue. In our APAC division, which was the first to feel the effects of the virus at the start of the year, up until now trading has been only moderately impacted and we continue to monitor events closely. The benefit provided by our diversity in terms of geography and market segment is more limited by the global nature of this pandemic.

The COVID-19 situation is rapidly evolving and the trading outlook has become uncertain. We are putting in place a broad range of measures to significantly reduce costs and manage our liquidity through this period of uncertainty. Measures include operating cost reductions, cancellation of discretionary projects, capital expenditure freeze, and an even greater focus on working capital management. We are not limited to these actions and we will continue to review all options available to us that will preserve the strength of the group's balance sheet, as we navigate our way through this unprecedented time, including the Board's recommendation of the final 2019 dividend.

In terms of financing and liquidity, as reported at our full year results on 3 March 2020, at 31 December 2019, our net debt was GBP213m, on a bank covenant IAS 17 basis, equating to net debt to EBITDA ratio of 1.2x compared to our covenant limit of 3.0x. The group has substantial borrowing facilities available to it. At 31 December 2019 the group had undrawn committed and uncommitted borrowing facilities totalling GBP247m, comprising GBP183m of the unutilised portion of the group's GBP375m revolving credit facility, which expires in November 2024 and has an option to extend by one further year, GBP22m of other undrawn committed borrowing facilities and undrawn uncommitted borrowing facilities of GBP42m. At that time cash and cash equivalents were GBP99m. As at the end of February 2020, the group had undrawn committed and uncommitted borrowing facilities totalling GBP230m, comprising GBP167m of the unutilised portion of revolving credit facility, GBP32m of other undrawn committed borrowing facilities and undrawn uncommitted borrowing facilities of GBP31m with cash and cash equivalents of GBP76m. Our liquidity position will remain under constant review during this uncertain time.

Given the evolving nature of the COVID-19 pandemic, it is too early to provide earnings guidance in relation to the remainder of the current financial year. We will continue to monitor external events, manage the situation closely and update the market as appropriate.

For further information, please contact:

   Keller Group plc                                                                   020 7616 7575 

www.keller.com

Michael Speakman, Chief Executive Officer

Mark Hooper, Interim Chief Financial Officer

Caroline Crampton, Head of Investor Relations

Finsbury

   Gordon Simpson                                                                     020 7251 3801 

James Kavanagh

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 revenues of more than GBP2bn.

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 Risk Management approach and Principal Risks 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 of 1933 (as amended).

LEI: 549300QO4MBL43UHSN10

Announcement classification: 2.2 Inside information. The person responsible for making this announcement is Kerry Porritt, Group Company Secretary and Legal Advisor

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March 25, 2020 03:00 ET (07:00 GMT)