operating margin
—
FY 2026
management framework
KELLER GROUP PLC
Last · LSE£33.12+0.4186 (+1.28%)stale · yahoo · 46h ago
Market cap£2.2B67.3M sh
P/E · TTM14.9fwd 12.4 · eps 2.22
Beta0.98vs S&P 500
Div yield0.02%annual · TTM
52w range
£14.04£35.18
Volume20.1Ksession
| Revenue | £3.1B |
|---|---|
| Operating income | £207.3M |
| Net income | £142.7M |
| Free cash flow | £168.1M |
| Operating margin | 6.7% |
| Net margin | 4.6% |
| Return on equity | 22.2% |
| Period | 2025 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong execution, but key forward-growth and investment questions remain unanswered until the October capital markets day.
Hold: Keller delivered a strong H1 2026, with constant-currency revenue up 11%, underlying operating profit up 17.1% and margin rising to 7.3%; North America revenue reached £984.4m, up 16.7%, driven by infrastructure and data centres. The bull case is a £1.37bn North American order book, multi-year I-40 work and continued data-centre demand, but management deferred 2027 growth targets and left ERP rollout costs unquantified while people constraints, APAC pricing pressure and working-capital intensity remain risks.
Themes
- Record Results
- North America
- Data Centres
- I40 Project
- Order Book
- Erp Rollout
Near term
North America should drive H2 growth, supported by the record £1.368bn order book and I-40 project, although the project is weighted into 2027–28 rather than the current year.
Data-centre activity remains a major near-term catalyst: it represented 9% of group revenue versus 3% in 2025 and more than 15% of North American revenue excluding Suncoast.
EMEA is expected to improve in H2 on higher Q3 volumes and its 16.5%-higher order book, while UK trading remains pressured by competition and limited opportunities.
APAC revenue growth is strong, but Keller Australia faces pricing pressure and Queensland weather disruption; Austral’s A$90m Parker Point win will enter the order book at year-end.
Cash generation is seasonally second-half weighted, but increased working capital and capex reduced H1 conversion; year-end net cash is expected to be about £30m after buybacks.
Longer term
The data-centre cycle could remain substantial, with management citing an external estimate of $650bn of US spending and saying Keller is still relatively early in the cycle.
I-40 should enhance Keller’s credibility and bidding capability for major US infrastructure projects, while management explicitly intends to retain a diversified base of smaller, higher-turnover jobs.
Keller’s geographic and product diversification has improved resilience, but growth is increasingly exposed to North American infrastructure and data-centre execution capacity.
People—not equipment—are the principal growth bottleneck in North America, particularly specialist rig operators, superintendents and experienced engineers; talent planning and training will determine how much demand can be captured.
The ERP rollout begins with a Canada pilot in early 2027 and could improve group coordination, but the pace and ultimate cost of the global rollout remain undecided.
Potential bolt-on M&A could accelerate growth, but management is rightly prioritising discipline and has not identified a transaction or changed its geographic preferences.
Red flags
Management declined to provide early 2027 growth indications, explicitly deferring the answer to the October capital markets day.
The ERP programme’s remaining cost is unquantified; simultaneous rollout could be materially more expensive, while sequential rollout would delay benefits.
Specialist labour availability could cap North American growth even with strong demand; management said it cannot simply recruit another thousand employees to expand capacity.
APAC operating profit was broadly flat despite 22.8% revenue growth, highlighting pricing and execution pressure in Keller Australia.
North American growth includes significant data-centre momentum and the unusually large I-40 project, increasing execution and concentration sensitivity despite the broader portfolio.
Working-capital outflows are linked to growth and I-40’s material content, while management expects no material claim settlements in H2 to offset cash needs.
Forward outlook
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Earnings transcripts
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