29. Keller Group Plc
Foundation Experts
A global leader in geotechnical engineering, Keller Group Plc delivers specialised ground engineering services to the construction sector, headquartered in London. Operating in the construction industry, specifically as the world’s largest geotechnical specialist contractor, the company provides advanced foundation and ground improvement techniques across North America, Europe, and Asia-Pacific, Middle East and Africa, tackling around 6,000 projects annually.
Keller Group earns revenue by offering a range of services, including ground improvement, grouting, deep foundations, earth retention, marine structures, and instrumentation and monitoring. It charges clients, spanning commercial, industrial, infrastructure, and residential sectors, on a project basis, with costs varying depending on complexity and scale. For instance, a deep foundation project for a skyscraper might involve installing piles to improve bearing capacity, while a marine project could include building a jetty with stabilisation solutions. The company also provides low-carbon construction techniques and monitoring services to ensure long-term stability, often bundled into contracts. In 2024, Keller reported revenues of £2.99 billion, barely changed from 2023, with underlying operating profit reaching £180.9 million, up 67% at constant currency, driven by strong North American performance and operational improvements in its foundations business.
Strategically, Keller has been refining its portfolio, exiting underperforming regions like Sub-Saharan Africa and Kazakhstan in 2023, while focusing on high-growth markets. Its North American division, including brands like Hayward Baker and Suncoast, has been a key driver, with resilient pricing and a progressive recovery in margins. However, challenges persist; a 2023 profit warning stemmed from a £14–16 million financial reporting fraud at its Austral Construction unit, leading to a 17% drop in pre-tax profit to £56 million for 2022, alongside the dismissal of two directors. Employing around 10,000 people, Keller anticipates a stable 2024, with a robust order book and a net debt/EBITDA ratio below its 0.5x–1.5x target range, reflecting strong cash generation of over £100 million in 2023.
Keller’s expertise in complex geotechnical solutions and its global footprint give it a competitive edge, but it must navigate economic uncertainties, regional slowdowns, and the fallout from past financial irregularities to maintain its upward trajectory. It’s not a particularly exciting business, which, from a value investor’s perspective, means it can often be overlooked. When that happens, the shares can drift to very low levels. At those points, it might offer some appeal as a short-term speculative opportunity. But in terms of underlying business quality, it falls well short of the standards we look for at Wonder Stocks.
Enjoyed this company summary? Discover more promising businesses in our growing collection of 500-word insights. Check out all company summaries here.
