Specialist contractor Keller (LON:KLR) upgraded FY26 guidance following a recent acceleration in its positive trading momentum.
The ground improvements-to-grouting group highlighted an ‘excellent performance’ through the remainder of Q2 with North America trading ‘materially outperforming’ management’s expectations.
Investors also welcomed news of ‘buoyant’ contract tendering activity across the group, sending the shares to new all-time highs.
Trading ‘materially’ ahead
London-headquartered Keller is in fact the world’s largest geotechnical specialist contractor. Basically, the company gets ground ready to build on and provides solutions to geotechnical challenges across the global construction sector.
Keller now expects FY26 sales and underlying operating profit will be ‘materially ahead’ of market forecasts.
Before today’s update, the company-compiled consensus called for a year-on-year rise in revenue from £3.09 billion to £3.15 billion. Analysts were forecasting a jump in underlying operating profit from £218.2 million to £223 million.
Led by CEO James Wroath, Keller’s North America division has benefited from a significant increase in customer demand for infrastructure projects and data centres. This demand has more than offset a softening south Florida residential market.
For the year-to-date, trading across the Europe and Middle East division has been ‘robust’. Projects in Scandinavia, central Europe and the Middle East have offset subdued market conditions in western Europe.
The Asia Pacific division is performing broadly in line with expectations, with the Austral construction business continuing the momentum delivered in 2025. This is largely offsetting pricing pressures in the Australia foundations market where activity levels remain strong.
Bulging order book
‘Tendering activity across the group remains buoyant,’ insisted Keller. ‘As previously announced, the group’s order book currently sits at a record level of circa £1.9 billion, increased by the significant multi-year I-40 highway remediation contract.’
Wroath said: ‘Our North American operations, which account for around 60% of the group’s revenue, have delivered an exceptional performance across the US and Canada so far this year, supported by increased activity in infrastructure and data centres.
‘This reflects Keller’s ability to identify and respond to structural megatrends and pivot to subsectors with strong customer demand which drive business growth.’
We’ve been fans of Keller and the infrastructure sector for a while, so it’s pleasing to see the company continuing to perform so well. Not only is the geotechnical specialist delivering operationally, it is also in great shape financially.
Keller’s balance sheet is strong, and the FTSE 250 firm’s improving cash generation means its dividend policy has been ‘enhanced’. The company is also returning cash to shareholders through a new £100 million share buyback.
But with the share price testing new all-time highs, we think the emphasis could now switch from buybacks to M&A. Keller certainly has the cash resources and paper currency to accelerate its strategic plans and further enhance its market positions through selective acquisitions. Watch this space.
Read the press release here: https://investors.keller.com/
