Keller smashes another record year and turns on the cash tap
Keller Group has delivered a record set of 2025 numbers and doubled down on shareholder returns. Revenue nudged up to £3,087.3m with margins holding firm, cash generation strong, and the dividend getting a 41.6% lift. Management also plans a further £100m share buyback in 2026. For a contractor, consistency like this is rare – and it is being backed by a strong order book and a robust balance sheet.
Headline numbers you need to know
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | £3,087.3m | £2,986.7m | +3.4% (+5.9% at constant currency) |
| Underlying operating profit | £218.2m | £212.6m | +2.6% |
| Underlying operating margin | 7.1% | 7.1% | Flat |
| Underlying profit before tax | £197.3m | £191.4m | +3.1% |
| Underlying diluted EPS | 211.3p | 199.9p | +5.7% |
| Free cash flow | £175.9m | £192.6m | -8.7% |
| Net (cash)/debt (IAS 17 basis) | £59.7m cash | £29.5m debt | First net cash in 25+ years |
| Total dividend | 70.4p | 49.7p | +41.6% |
| Order book | £1,541.7m | £1,610.0m | -4.2% |
| Return on capital employed | 30.7% | 28.2% | Highest in 17 years |
What powered the record year
Despite a mixed market and a £7.8m FX translation headwind, Keller held margins at 7.1% and lifted profits. The engine room was broad-based: a sharp recovery in Europe and the Middle East (EME) after a prior-year project loss, strong growth in Austral and Keller Asia, and continued discipline in pricing and execution globally.
- North America: revenue up 5.0% (constant currency) to £1,815.7m, but profit of £166.2m was down 9.6% as Suncoast felt the US housing slowdown and 2024’s bumper foundations margins normalised.
- EME: revenue up 4.1% to £873.4m; underlying operating profit jumped more than four-fold to £38.8m, taking margin to 4.4%.
- APAC: revenue up 14.6% to £398.2m; profit up 14.6% to £30.6m with a 7.7% margin, led by Austral and Keller Asia.
Safety also improved: the Accident Frequency Rate fell to 0.04 with 11 lost time injuries (2024: 0.05; 14), always a good sign of operational control.
Dividends and buybacks: the cheque is getting bigger
Keller has reset its capital return playbook. The dividend policy is now targeted at a 2.5x-3.5x earnings cover, reflecting steadier cash generation. The 2025 final dividend is 52.1p, taking the year’s total to 70.4p, up 41.6%. Subject to approval, the final dividend is payable on 26 June 2026 to shareholders on the register at 29 May 2026.
On top, the Board intends to launch a further £100m share buyback during 2026, following two £25m tranches initiated in 2025. Up to 2 March 2026, £44m had been returned via the programme. With net cash of £59.7m on an IAS 17 basis and leverage at (0.2)x versus a target range of 0.5x-1.5x, Keller has room to keep rewarding holders.
Regional deep dive: where the work is coming from
North America: still outgunning a flat US construction market
Revenue rose to £1,815.7m, helped by data centre work and big-ticket infrastructure like New York’s Hudson Tunnel and I-40 in Tennessee. Profit eased to £166.2m and margin to 9.2% as Suncoast (post-tension products largely for residential) faced softer housing starts and prior-year pricing normalised. Even so, the order book remained strong at £1,022.3m, and Keller expects to keep outperforming a flat US market in 2026 (source: FMI).
Europe & Middle East: profitability back with a bang
Revenue grew to £873.4m and profit surged to £38.8m as the troublesome Middle East project from 2024 did not repeat and European operations tightened execution. The order book rose 14.2% to £356.0m, with activity anchored in public infrastructure, energy networks and clean energy projects.
APAC: Austral and Keller Asia doing the heavy lifting
Revenue climbed to £398.2m and profit to £30.6m, with a 7.7% margin. Austral performed strongly; Keller Asia benefited from renewables and semiconductor projects in India, while Australia saw softer trading after last year’s transport stimulus. The order book is £163.4m, down 5.4% after strong conversions, with a solid pipeline ahead.
Cash, balance sheet and order book quality
Free cash flow of £175.9m comfortably funded capex of £90.3m, the dividend (£36.2m paid during the year) and £38.9m of buybacks. Statutory net debt on an IFRS 16 basis is £28.9m due to lease liabilities; excluding leases (the lender covenant or “IAS 17” basis), Keller sits in net cash of £59.7m. Headroom remains ample with the £400m revolving credit facility undrawn and total borrowing headroom of £447.1m.
The order book at year-end was £1,541.7m, with high tendering levels and good visibility into 2026. That gives management the confidence to raise distributions while investing in growth.
Strategy check: market share, not landgrab
The new CEO has sharpened the growth strategy around relative market share (RMS) – winning in chosen local markets by applying Keller’s product breadth and engineering depth. Expect more of what already works: commercial discipline, selective bolt-ons, and targeting faster-growing segments like infrastructure, energy transition, data centres and climate resilience. ROCE at 30.7% shows the model is delivering.
Outlook: more to come, with sensible caution
Management flags macro uncertainty, but Keller starts 2026 with a strong balance sheet, a high-quality order book and embedded operational improvements. In the US, overall construction may be flat, but Keller plans to keep outpacing through infrastructure and technology-linked demand; EME benefits from public programmes; and APAC has a healthy pipeline, notably in Australia and India. The plan: further progress in 2026 and beyond.
My take: why this matters for investors
What looks positive
- Margin resilience at 7.1% in a tougher market shows improved bidding and execution are sticking.
- Cash discipline is excellent: net cash on an IAS 17 basis, leverage well below target, and strong free cash flow conversion (108% before interest and tax).
- Shareholder returns are stepping up – 70.4p dividend and a £100m buyback planned for 2026.
- ROCE of 30.7% suggests capital is being deployed into high-return work, not just chasing volume.
What to watch
- North America profit normalisation and ongoing softness in US residential (Suncoast) may cap margin upside until housing improves.
- Order book is slightly lower year-on-year (£1,541.7m vs £1,610.0m), so wins and conversion in early 2026 matter.
- FX remains a headwind variable; 2025 saw a £7.8m drag on operating profit from translation alone.
Overall, this is a high-quality print: record profits, sturdy cash, and generous returns without over-gearing. If management continues to tilt the mix toward infrastructure, energy and technology-led demand, the setup for steady compounding looks intact.
Quick jargon buster
- Underlying: management’s measure excluding one-offs like ERP and restructuring, plus amortisation of acquired intangibles.
- Constant currency (CER): restates last year’s numbers at this year’s exchange rates to strip out FX moves.
- ROCE: return on capital employed – profit versus the capital used to generate it; higher is better.
- IAS 17 vs IFRS 16 net debt: IAS 17 excludes lease liabilities (used for banking covenants); IFRS 16 includes them in statutory net debt.
- AFR: Accident Frequency Rate – a safety metric; lower is safer.
