KELLER GROUP PLC 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 £2bn.
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 business Losing access to the financing facilities necessary to fund the business. | Breach of banking covenants or failure to continue in business or meet our liabilities | Procedures to monitor the effective management of cash and debt, including weekly cash reports and regular cash forecasting. | Negotiated new syndicated revolving credit facility on improved terms and rates totalling £375m with a maturity of five years to November 2023, incorporating two additional one year extension options and a £200m 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 Inability to maintain a sustainable level of financial performance throughout the construction industry market cycle which grows more than many other industries during periods of economic expansion and falls harder than many other industries when the economy contracts. | Failure to continue in operation or to meet our liabilities. | Diversification of our markets, both in terms of geography and market segment. Strong balance sheet. Leveraging the global scale of our group. Having strong local businesses to address geographic markets. | |
| Strategic risks | |||
| Failure to procure new contracts A failure to continue to win and retain contracts on satisfactory terms and conditions in our existing and new target markets if competition increases, customer requirements change or demand reduces due to general adverse economic conditions. | Failure to achieve targets for revenue, profit and earnings. | Continually analysing our existing and target markets to ensure we understand the opportunities that they offer. Structured bid review processes in operation throughout the group with well-defined selectivity criteria that are designed to ensure we take on contracts only where we understand and can manage the risks involved. | |
| Losing our market share Inability to achieve sustainable growth, whether through acquisition, new products, new geographies or industry specific solutions. | Failure to achieve targets for revenue, profits and earnings. |
Continually seeking to differentiate our offering through service quality, value for money and innovation. A Business Development function focusing 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 with our Code of Business Conduct Not maintaining high standards of ethics and compliance in conducting our business or failing to meet legal or regulatory requirements. |
Losing the trust of our customers, suppliers and other stakeholders with consequent adverse effects on our ability to deliver against our strategy and business objectives. Substantial damage to Keller’s brand and/or large financial penalties. |
Having clear policies and procedures in respect of ethics, integrity, regulatory requirements and contract management. Maintaining training programmes to ensure our people fully understand these policies and requirements. Operating and encouraging the use of a ‘whistleblowing’ facility. | |
| Operational risks | |||
| Product and/or solution failure Failure of our product and/or solution to achieve the required standard. | Financial loss and consequent damage to our brand reputation. | Continuing to enhance our technological and operational capabilities through investment in our product teams, project managers and our engineering capabilities. | |
| Ineffective management of our contracts Failure to manage our contracts to ensure that they are delivered on time and to budget. | Failure to achieve the margins, profits and cash flows we expect from contracts. |
Ensuring we understand all of our risks through the bid appraisal process and applying rigorous policies and processes to manage and monitor contract performance. Ensuring we have high-quality people delivering projects. | Increased complexity and scale of contracts demands resources and capabilities that are not yet embedded in all of our regions and business units. The volatility of contract performance increased during 2018. |
| Causing a serious injury or fatality to an employee or member of the public Failure to maintain high standards of Safety and Quality | Damage to employee morale leading to an increase in employee turnover rates, loss of customer, supplier and partner confidence and damage to our brand reputation in an area that we regard as a top priority. |
A Board-led commitment to achieve zero accidents. Visible management commitment with Safety Tours, Safety Audits and Safety Action Groups. Implementing management systems that conform to Occupational Health & Safety Assessment System 18001. Extensive mandatory employee training programmes. | Key performance indicators continue to improve, however, the group suffered three fatalities in 2018. The upper limits for fines and scope for prosecution have increased. |
| Not having the right skills to deliver Inability to attract and develop excellent people to create a high-quality, vibrant, diverse and flexible workforce. |
Failure to maintain satisfactory performance in respect of our current contracts and failure to deliver our strategy and business targets for growth. | Continuing to develop and implement leadership, personal development and employee engagement programmes that encourage and 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 £m |
2017 £m | |
| 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 £1.1m (2017: £2.0m) 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.
