Keller Group (KLR) CMD 2026 summary

Medium-term targets and capital allocation

• 2026–2030 targets: 5–7% organic revenue CAGR, ~7% operating margin, ROCE >30% and ~£800m total free cash flow.

• Divisional margin baselines: North America ~9%, Europe and the Middle East ~5%, Asia-Pacific ~7%.

• At target performance, annual free cash flow of £150m–£160m is a planning base; 2025 free cash flow was £176m with 108% operating cash conversion.

• ~40% of 2026–2030 free cash flow is expected to fund ordinary dividends and ~60% bolt-on M&A or additional shareholder returns; capex and working capital investment are expected near 3.5% of annual revenue.

• Leverage framework is 0.5–1.5x and dividend cover target 2.5–3.5x; net cash at end-2025, no debt maturity before 2030 and a fully undrawn £400m revolving facility through June 2031.

Strategy and operating capabilities

• Operations span 35 countries and five continents, with ~10,000 employees, 5,500 projects annually, 1,100 rigs and 2025 revenue of £3.1bn and operating profit of £218m.

• Sector-agnostic portfolio spans infrastructure/public (38% of 2025 revenue), power/industrial (30%), office/commercial (21%) and residential (10%); geotechnical services are ~1% of construction spend but can de-risk 85% of structure and finishes spend.

• Operating margin improved from ~4% in 2021 to a sustainable ~7% through portfolio exits, risk-adjusted pricing, stronger bid reviews and execution, fewer loss-making contracts and integration.

• Local branch knowledge combines with 1,700 engineers, 175 branches, 50+ techniques and ~1,100 specialist rigs and cranes; average rig age is 10–11 years.

• Priorities include talent development, customer relationship management, improved ERP and project systems, and expanded corporate development; SSAB’s Luleå alternative ground solution cut foundation cost by >50% and emissions by 80%–90%.

Growth strategy, markets and M&A

• Construction output across served sectors and geographies is forecast to grow ~5% annually to 2030; energy and utilities ~7%, infrastructure ~6%, with demand from energy transition, data centres, transport, resilience and defence.

• H1 order book was ~£1.9bn, rising to £2.4bn including I-40; Sep-2026 order book was ~£2.4bn excluding I-40. Tender pipeline is typically 2–2.5x order book and unsecured; ~60% of Sep order book comprises short-order projects with a two-month unwind.

• Growth combines deeper local market share, capability aligned to demand and balanced project sizes; projects above £10m represented ~28% of revenue, with ~72% from small and medium work.

• Bolt-ons can accelerate, but are not required for organic targets; focus is on geographic density, techniques or sector/customer access, with self-funded, earnings-accretive deals and clear synergies. Acquisition activity is expected to increase after an integration-focused pause; no deal was described as imminent.

• RECON, acquired for £30m in 2021, added environmental remediation and Gulf Coast energy exposure; cross-selling supports organic growth, with cash payback within three years.