Keller Group Stock

Good morning, everybody, and welcome to the presentation of Keller's Half Year Results for 2026. I'm James Wroath, and I'm the Chief Executive.

Before I go on to the main business of the day, very sadly since our full year results, you'll know that the -- my predecessor, Michael Speakman, sadly passed away at Easter. And I wanted to take this opportunity to pay a final tribute to him. The results that you see today and many of the themes that come out in terms of just how great a business Keller is lead directly from Mike's work with the management team and the changes that were made in the last 5 or 6 years have been fundamental in my belief to how Keller has performed. So very sad. The business will always remember Mike, but he did an absolutely superb job with Keller.

So on with the presentation for today. Firstly, the cautionary statements, which I'm sure is a slide that you're all very familiar with. For our agenda this morning, I'm going to take you through a snapshot of our results before handing over to David Burke, our CFO, who will take you through the financials in more detail. I'm then going to return to give you some greater color around our divisions, a view of the outlook and a reminder of our strategy. As I think you all know, we're going to be holding a Capital Markets Day on the 14th of October, and there we'll cover our strategy and growth plans in a lot more detail. And then finally, we're going to finish with a Q&A.

So a very brief results summary. The Keller Group continues to deliver record financial performance with H1 2026 being no exception. In fact, 2026 is on course to be the group's fourth record year in a row. Revenues are up 11% overall due to significant increases in both North America and APAC. EME is holding steady despite the Middle East conflict and a tough Q1 due to the winter weather. Operating margin was also up on 2025, leading to an impressive 17% increase in underlying operating profit. Overall, H1 is a good demonstration of our geographic and sector agnosticism, where we've pivoted to key growth markets and high-demand subsectors to drive top line growth whilst continuing to maintain our margin discipline.

I'm now going to hand over to David for a more comprehensive overview of this excellent financial performance.

Thank you, James, and good morning, everybody. Welcome to another excellent reporting period. The key highlight for the first 6 months is again the power of our portfolio. North America after going backwards in 2025 is powering forward. Whilst EME is down on revenue, it is picking up on profit. And APAC is up on revenue, but flat on profit.

This slide shows 9 of our most prominent financial KPIs and the performance of H1 2026 compared to H1 2025. Included in the appendix is a slide in a similar format that tracks these KPIs over the last 4 full years to 2025. For H1 2026, the picture remains very healthy with the underlying fundamentals of the business continuing the upward trajectory we've demonstrated over recent years. The most striking feature is the level of growth momentum with all KPIs improving against last year at quite a healthy clip.

So let's look at some details. This slide sets out the underlying P&L for the half year. Looking at revenue, we have excellent revenue growth of 11% on a constant currency basis against a market backdrop that hasn't exactly been stable. In the box on the right, you can see North America is the driver, albeit APAC is also growing from a smaller base given the buoyant foundations market in Australia. EME is down, but driven particularly by bad weather in Q1, fewer major projects and less revenue coming through from the Trojena project in 2026.

Our underlying operating profit increased by 17.1% on a constant currency basis, and we increased the margin rate to 7.3%. This again demonstrates the resilience of our portfolio where weaker pockets are offset by areas of strength. I will bridge that operating profit performance in the next slide. Net finance costs are slightly reduced given we have been net cash for most of H1 and the USPP cost is static. Taxation is at an effective rate of 23%, similar to last year. The underlying earnings per share have increased by 22%, driven by the improved underlying profitability and the impact of the share buyback. The Board has agreed an interim dividend of 28.7p, an increase of 57%. This increase is driven by our revised policy announced in March to be in the range of 2.5 to 3.5x for the full year dividend and assumes we will be at 3x cover for the full year with 35% paid at the interim.

We'll now move on to the operating profit bridge slide. Moving from left to right, starting with half year 2025 underlying operating profit of GBP 102.6 million. There is an FX impact of GBP 1.9 million due to the dollar weakness against sterling compared to half year 2025. Coming to the North America division first, which is up GBP 14.1 million versus H1 last year. This is an 18% increase in a market where not everything is trending in an upward direction. The principal driver is the Foundations business with data center and infrastructure sectors driving this phenomenal growth. However, within Foundations block, we've had challenges with the Miami residential market, seeing weakness with projects shifting to the right. This Miami business within Foundations have been defying the broader residential trend for a number of years. However, concern over interest rates and broader macro uncertainty seems to have made developers more tentative. We hope this is a pause rather than a downward trend.

Suncoast is up on a low 2025 base. This is the local team squeezing profitability out of what continues to be a sluggish residential market generally. The combined Moretrench RECON business is down after a strong last year. RECON has performed well, executing a sizable LNG project, but the main client for Moretrench continues to limit investment given the impact the Iran war is having on its input costs.

Now turning to Europe and Middle East, where operating profit was up GBP 4.2 million despite the reduction in revenue. The Middle East defied the market backdrop with improved volumes and profitability despite a temporary pause due to the Iran war. This is predominantly driven by the UAE with strong volumes and a change order on the Trojena project also helping. Elsewhere, the market sluggishness of Europe continues. However, the team continued to execute well, increasing profitability and retaining a decent margin level. The exited businesses delta relates to the Mauritius and Seychelles business we exited and represents losses not repeating.

We call out the U.K. separately given the challenges in the market with high levels of competition and a low level of opportunities, giving rise to pricing pressure. In the APAC division, Austral continues to perform strongly, offset by the Australia foundation business, which is up on revenue with reduced profitability due to Queensland weather, the impact of project settlements in '25 not repeating and price pressure as the business transitions between transport and new opportunities in energy, data centers and defense.

Moving to the next slide, I'll cover off non-underlying items. The analysis box shows the items that make up the GBP 5.4 million split between cash and non-cash items. We continue to invest in the ERP program and are getting close with the final build. We are entering into a phase of extensive acceptance testing that will lead to the pilot in Canada in early 2027, followed by the subsequent rollout across the group. The restructuring cost relates to the group's finance transformation program, which is now focused on North America.

I'll now move on to talk about cash. Cash generation does tend to skew towards the second half of the year with historic H1 levels being much lower and 2026 will be no exception. Whilst free cash flow has marginally increased, the conversion rate has reduced, driven by increased working capital and CapEx levels as the business grows. This is offset by a lower tax spend due to the change in the rules in respect of U.S. R&D deductions in 2025.

Below free cash flow, the major increases are driven by the return of cash to shareholders with the increased dividend and increased level of share buybacks at the half year. At the half year, we are GBP 32.4 million through the GBP 100 million buyback with the balance being what was left of GBP 50 million buyback in 2025 being purchased in 2026. In the bottom right, we highlight the reconciliation to net debt on an IAS 17 covenant basis to GBP 15.9 million.

This slide shows the monthly profile of net cash/debt. You can see for the majority of H1 2026, we were net cash with the final dividend payout in June pushing us to net debt. We expect the profile for the remainder of this year to be pretty similar to 2025 and hitting circa GBP 30 million net cash level after the impact of the share buyback by the year-end. Our funding facilities are in a comfortable position from a quantum and tenor perspective. We have headroom of circa GBP 655 million. This is a very resilient position, and along with our cash generating capacity, gives us confidence as we look to the future at organic and inorganic opportunities.

It is worth reiterating our margin performance and our confidence in sustaining margins above 7%. This is underpinned by the portfolio resilience referred to earlier and our continued focus on discipline and control in our bidding and execution activities. This is a snapshot of our order book with growth in North America, including the I-40 project driving the 20% increase. We have called out the I-40 project separately due to its scale and multiyear duration, which will underpin future years' revenue rather than the current year. James will talk more about the divisional movement later.

Finally, for me, a slide on capital allocation. We remain committed to this framework that we laid out in March. So no change here other than the value of numbers for H1 2026. We continue to prioritize the business first through working capital and CapEx, then continuing the dividends, and finally, the balance between capital spent on M&A and further shareholder returns through share buybacks.

That's it for me. Thank you for your attention. I'll now pass you back to James, who will take you through the operational review section.

Thanks, David. Our H1 2026 results demonstrate perfectly some of the key strengths of the group. Keller continues to showcase the power of our portfolio, and these are a record set of results driven particularly by volumes of infrastructure and data center work alongside superb Austral performance. But they do also come in the context of a slow South Florida market, one of our normally strongest performers. They come in the context of challenging volumes for Moretrench who had an excellent 2025. And they come in the context of a thriving but highly competitive Australia foundations market.

Keller's geographic portfolio aligned to our market-leading portfolio of products and techniques that enable us to win both small and large jobs is proving again to be a winning combination. On top of this, the quality of our people is ensuring that margins are maintained despite teams being very busy. Much of this is possible because the business has the scale to support itself where required and advancements in the last few years have transformed internal collaboration. I'm going to cover our U.S. I-40 project shortly, which is a perfect example of how all this comes together to deliver fantastic results for customers and for Keller. Safety also remains a strength. And as market leader, Keller sets the standard in our industry. However, we're not complacent, and our forthcoming Annual Safety Week is our opportunity to remind each other of this.

Now I'd like to cover a bit of subsector analysis. We're going to cover more of this at the Capital Markets Day, but I wanted to give a bit more color at these results because I think it really illustrates the power of Keller's portfolio, our sector agnosticism and our ability to pivot to the latest megatrends. This slide illustrates the top 5 subsectors for the group and for each of our 3 regions. The arrow denotes the trend versus H1 2025. Importantly, the top 5 represent less than 40% of group revenue, and I think that illustrates the breadth of our subsector coverage.

Aside from this, I'm sure nobody is surprised by the surge in data centers. They now represent the largest subsector for the whole group with 9% of group revenue compared with 3% in 2025. Excluding Suncoast from the revenue numbers, they're more than 15% of our U.S. revenue year-to-date. Data centers are also in second place in the APAC division, driven by new buildings in Australia. While we do expect the data center trend to continue, I also have great confidence in Keller's ability to pivot to whichever construction megatrends exist in our market.

Another notable trend on this slide relates to the decline in multifamily residential, largely because of Miami, this held up in 2025 despite an overall tough U.S. residential market. However, in 2026, as David just said, we've seen major developments delayed and the revenue in this subsector declining by approximately 1/3. All other top 5 group sectors were up with mining in APAC, particularly impressive due to Austral's strong performance.

Now I look at the regions in a little bit more detail. As David has already said, North America delivered a record first half performance with revenue up 16.7% to GBP 984.4 million and operating profit up 17.7% to GBP 93.8 million, both at constant currency levels and margin steady at 9.5%. Growth has been driven by underlying volumes across our Foundations business, especially within data centers, as we've just heard, but also in high-value major infrastructure projects such as I-40, the Hudson River Tunnels and the Second Avenue subway extension.

Data center demand is a true megatrend. We've done more of these projects in H1 of 2026 than we did in the whole of 2025. Again, Keller's ability to pivot fast to growth subsectors remains a key differentiator. The resultant standout contributions from our Southeast, our Central, our North and our Canada business units through strong project execution and commercial management of the increased volumes more than offset Q1 weather disruption and the softer South Florida residential market.

Again, as David said, RECON delivered a strong performance on a major Gulf Coast LNG project, offsetting the softer Moretrench trading. The order book is also up strongly to GBP 1.367.9 million, reflecting our major infrastructure awards and in particular the I-40 highway remediation expansion. The data mega center trend -- sorry, the data center megatrend continues, representing just over GBP 100 million of our work in hand. And finally, Suncoast stayed resilient despite weaker residential markets through diversification and disciplined cost management. We are confident on the outlook for the remainder of 2026 in North America with that record work in hand and a healthy pipeline, leaving us well positioned for continued profitable growth and strong cash generation in H2.

And now a little more in-depth look at I-40. So I-40 is the largest project by quite a distance in Keller's history. The job is to reconstruct the highway from the Tennessee Stateline to North Carolina following significant damage caused by Hurricane Helene in 2024. The multiple complex techniques required illustrate both the enormous technical expertise that exists in our business and the ability to marshal the resources required to deliver at scale. I think Keller has been transformed in this respect over the past few years with the One Keller initiative, a major factor in bringing the full power of the business to opportunities. This is a multiyear project involving a range of techniques critical to restoring to full operation a vital piece of American infrastructure.

Moving on then to EME. Revenue in EME was down 5.2% to GBP $396.1 million at constant currency level. Strong Scandinavia volumes due to the Lulea project that we talked about at full year were offset by Q1 weather disruption and fewer large projects than in H1 of 2025. Underlying profit -- operating profit was up 28% to GBP 19.2 million, with margin improved to 4.8% from 3.6%, driven by Middle East profit growth despite the conflict and also by strong European execution. The poor margin NEOM contract from 2025 has also not been repeated in 2026. Overall, the Middle East has seen resilient trading and profit growth despite the ongoing conflict. We've prioritized staff safety throughout and a brief productivity dip in March has been offset by a strong start to the year and a solid Q2.

As we look ahead, Western Europe remains subdued with government infrastructure and defense spend yet to materialize. The U.K. market remains particularly challenging with volume and profits down. The order book is very healthy, though, and it's supported by smaller jobs such as the 2 residential projects I saw recently on a trip to Warsaw. These are very much the bread and butter of Keller, particularly in Europe. Overall, the order book is up 16.5% to GBP 396.7 million, and we, therefore, expect continued improved trading in H2, supported by higher Q3 volumes and a very healthy tendering pipeline.

Finally, in APAC. APAC revenue was up 22.8% to GBP 227.5 million, driven by excellent momentum in Austral and record volumes at Keller Australia. Underlying operating profit was broadly flat at GBP 13.8 million, sorry, due to margin pressures in Keller Australia and the non-repeat of prior year project closure settlements. Austral continues to thrive with revenue and profit both up. I witnessed firsthand earlier this year the impressive civil works this business does in the mining sector and tendering volumes for complex high-value civil and nearshore marine projects for late '26 and '27 remain high. Indeed, we will be announcing today that Austral has won a project at Parker Point worth circa AUD 90 million which will go into our order book at the full year.

Keller Australia has record revenues on the back of strong public spending demand in areas such as hospitals and data centers, but profit has been impacted by pricing pressure as well as unusually severe Queensland weather. In Keller Asia, revenue and profit were broadly flat with India expected to see volume growth in H2 after a slow start and with investment expected in the market. Our Singapore business is benefiting from growing construction demand, such as the new Terminal 5 at Changi Airport that I and our executive team visited back in March.

The team is confident of maintaining recent momentum despite the order book being 18.9% lower at GBP 174.6 million. This is mainly due to a strong comparable period in 2025, where Austral won several major marine contracts. We still have solid work-in-hand, good pipeline visibility and supportive market conditions, and we expect the order book to pick up in H2, and it certainly helps with that recent win from Austral.

So the summary and outlook, beginning with our strategy for long-term value. Clearly, we'll be using the Capital Markets Day to outline our strategic plans in much greater detail. The structure we will use is the same as I described for our 2025 full year results. I believe passionately that the power of Keller's geographic and product portfolio multiplied by the excellence of our people and their performance can deliver a highly attractive pipeline of opportunities.

During the event, we'll use both Keller and market data to illustrate why this is the case and to be clear on our growth ambitions. We continue to make progress on all of our 2026 priorities. As David said, as an example, our new ERP will be ready for rollout at the start of 2027, beginning with Canada. And I've hired a new Chief People Officer, Matt Stripe, to bring real impetus to our talent agenda. But clearly, much more to follow in October. I hope to see you all there.

For the summary and our outlook, the record results, I think, largely speak for themselves. We've continued our focus on commercial discipline and operational execution and volumes clearly, particularly in the U.S., have been really strong. The H1 2026 results are a testament to this. We've got strong momentum entering H2 with performance as ever weighted to the second half. We remain confident in achieving our recently upgraded FY '26 market expectations. Data centers prove that the business can pivot to growth sectors, and we remain confident that this trend is going to continue for some time. But even more so, we remain confident in Keller's ability to pivot to whichever construction megatrends exist in our markets at any given time. Our balance sheet remains very strong with optionality to grow both organically and inorganically through bolt-on acquisitions. And I look forward to sharing much more of these plans with you in October at our Capital Markets Day.

And with that, I'll pass to a Q&A. Thank you.

Aynsley Lammin from Investec. I think I've got 3, please. I wonder if you could just give a bit more color on the kind of data center megatrends you talked about in terms of where is that kind of all across the U.S.? Are we at the very early stages of that? Do you expect that to get bigger and bigger over the next kind of 12, 18 months? And second question, maybe mainly on the U.S. as well. Just any comment around cost inflation, whether cement, steel, higher energy costs or whether anything has changed on energy cost? And then third question, just on the EME margin. Is that step-up more of a function of kind of better execution of some of those bigger projects? Or is that actually some structural improvement that we should expect to be sustained in that division?

Shall I take the first one, you take the second 2?

Yes. That's fine.

So data centers are pretty much all over the U.S. There doesn't seem to be a particular trend. And there doesn't seem to be a particular trend in terms of rural or urban either. They pop up everywhere. We like them when they're in challenging geological conditions because they require more of Keller's expertise to make them happen. And in terms of the cycle, I think we believe the projections, and I think the number that I've heard quoted is $650 billion to be spent on data centers. And I think we're still relatively early in that cycle. So all the noises at the moment coming out of the U.S. so the trend will continue.

Yes. In terms of cost inflation, I mean, as we've always said in the past, we are a short order business. So we get the opportunity to reprice if things do increase. And if we have longer-term projects, then we always insist on some form of protection, whether it is an escalation clause or we'll price escalation into the job as well. So actually, we're not seeing that much impact even with the fuel cost, we did a bit of an exercise in the early part of the year to understand what the impact from the Iran war was. Actually, it didn't turn out to be that material at all. So we feel reasonably comfortable with that.

EME margin, I think it's a combination of a few things. I think one aspect is the fact that the Trojena project, which we provided for fully in '24 came through as revenue in '25 with no margin. So that's not repeating in '26. So that gives the margin a bump. But also the fact that the UAE has had good volume through its business and at a reasonable margin rate, that has helped as well. And I think the other aspect with the rest of the business is even though the market is sluggish, they are executing very well. And you can see there's even a bump in profitability from the rest of the business despite that -- the fact that the market isn't great. So there probably is a bit more to go on EME margin, particularly if the market turns.

Clyde Lewis at Peel Hunt. I think I've got half a dozen, but I'll do half of them now and come back later. Canada, no mention at all on the North American slide. So it'd be interesting to get an uptake on an update on where you are there and how that business is performing. The second one on acquisitions. Is there anything in the pipeline at the moment? Are you getting close to anything? And has your, I suppose, geographical preferences changed at all? And the third one, I suppose going back to Aynsley's question on data centers. It's missing from that top 5 list in Europe. Is there nothing happening in European markets in terms of data centers? Or are you just not in that market at the moment?

I can do Canada. I'll take that.

Sorry?

I can do the Canada bit.

You want to do Canada? Yes.

Yes. I think Canada from a couple of years back has actually transformed its deliveries, had a very good year in '25 and it continues to be. That's why it doesn't feature in that bridge slide is because it's had 2 good half years in a row. So there is a lot of infrastructure work going on in Canada, and we actually visited some sites in Toronto when we were there a couple of weeks back, very solid performance in that business.

Yes. It was really inspiring. We -- I mean, we have lots of young talent all around the world, but Canada, in particular, we have some really talented engineers and they're working on big projects for the Toronto Metro. But good note, we'll bring out a bit more in the Capital Markets Day. From an M&A perspective, I think the first thing to say is -- and I can't keep saying I'm new, right? I think that's just about run out. But this has been my first 12 months with the business. And I think before doing any acquisitions, big or small, you want to take some time to just really understand where we're at. And also, as you've seen from the numbers, the organic growth is terrific. So I think we can afford to be patient with M&A.

I still believe -- and we'll talk about it more at the Capital Markets Day. I still believe that there are opportunities in certain geographies to accelerate our organic growth through using some bolt-on inorganic acquisitions. We do have a pipeline, and we are actively looking at things, but I want to make sure that they really do make a difference to the business and don't disrupt that -- the fantastic momentum that we've currently got.

Data centers, that's a very good challenge. And again, I think that's something that we can pick up in the Capital Markets. We just aren't seeing the same level of opportunities in Europe for Keller as we are in Australia or in the U.S. I honestly don't know to what degree that's to do with how many are being built versus Keller's market positioning. I suspect less are being built, but we'll pick that up and provide a bit more analysis at the Capital Markets Day.

Ben Varrow, RBC. First one, just on the order book. You've called out that the duration has extended. Is that just the I-40 piece or is there anything else to that? And can you also chat through the current visibility the group has?

Within that second question, early days, but thoughts on growth heading into '27. Is there any early indication there, particularly in North America? Third, just on the group as it stands today, I think the narrative has been that you're content with the areas that you are for now. But from a divestment perspective, is there anything that could be done there to further streamline the group?

Do you want me to do the order book?

Sure.

Yes. So I think we are at pains to say the I-40 project, whilst it will chew through a good piece of that $380 million of that signed up contract in '26, there's an equal spread into '27 and '28. And I think other than that, the nature of the order book remains pretty similar. In terms of visibility, we do tend to chew through 2/3 of the order book in 6 months and then the balance gets made up by stuff that comes in and goes out during that reporting period. We don't see any change in that. But from a momentum perspective, we are seeing good tendering levels that continues, and we have no reason to believe that things are going to drop off as we go into 2027.

And in terms of growth, I'm going to completely duck under that bouncer. We'll tell you that at the Capital Markets Day. We know how enthusiastically the market is waiting to hear some of those thoughts on growth. And from a group perspective, really happy with where we are. I mean, from a geographic perspective, David, alongside Mike have, in my view, done a terrific job of focusing us in on the markets where we can really make a difference, get paid, collect the cash and contract sensibly. I'm happy with our geographic split. And from a business perspective, I mean, yes, Moretrench, as an example, has had a bit of a difficult year because of the Middle East conflict, but it had an amazing 2025. And Austral goes from strength to strength and RECON is having a very good 2026. So I think there's enough diversity without it being too much, right, diversity in the portfolio. So I'm pretty happy with where we are.

Yes. And you'll see in EME where we drop out of Seychelles and Mauritius, we continue to look at areas like that. There's not too much left in terms of small areas to drop off. But yes, we continue to look at it, but I don't think there's anything material left.

And the model -- the way that the model has been set up, we're still able -- particularly in Europe, we're still able to pivot to countries where there are opportunities with customers that particularly want us to go there. So as an example, we've done a job recently in Iceland. We don't have a branch in Iceland. We don't have a team in Iceland, but it was a particular customer that wanted us to support them. So our Nordics team supporting in Iceland. So we can -- within the model we have, we can do that. But I don't think we need to go around putting any more flags in countries.

Jamie Murray from Bank of America. 2 questions from me. First one is what are the key bottlenecks that you're seeing, especially in North America where the opportunity is clearly vast and how are you managing that? And then secondly, just another stab at the order book. Clearly, GBP 1.9 billion is an unbelievable record that you guys achieved. How much of that is going to be executed in the next 6 months versus beyond?

So in terms of bottlenecks, look, it's always the same in this business. It's people. And it's -- to a degree, it's the operational executional people, depending on what the job is, sometimes the rig operators can be very specialists, and there's a pinch point there. Superintendents, the sort of site supervisors is always an area where there's quite a battle for talent in the industry. And then even though there's a good pipeline of engineers coming out of particularly U.S. universities, there's still quite some work to do to get those people in and to get them trained up and to get the right experience.

So when I referenced earlier about our new CPO, that's part of having a -- Keller does a good job at it at the moment, but I think we can do better in terms of planning that talent pipeline and planning those investments in people. So we'll be doing more of that. Kit's not a problem, particularly in the U.S. You can rent kit, you can rent equipment. So in terms of what we're doing about it, it is keeping up with that organic piece. This isn't a business where I could just go out and tell the team to recruit another 1,000 people so that we can do more work. But I'm not even sure we'd necessarily want to, right? We want to grow cautiously with the volume that's there.

And then in terms of the order book, as David said, we burn through -- you should sort of take I-40 out, which we've publicly disclosed what I-40 and the value of I-40 and then assume that the rest of it is relatively normal profile, which is that we burn through about 2/3 in the first 6 months. We actually burn through around 35% to 40% in the first 3 months, which I think one of the things when we talk in these results presentations, we like to talk a lot about the big jobs, right, because the big jobs are the exciting ones, they're the ones that sort of capture people's imagination. But the reality is that Keller's average size job is somewhere between GBP 0.5 million and GBP 1 million. So we are still -- as what I said in the presentation, the jobs I saw in Warsaw, they are very much the bread and butter of what Keller does. So 35%, 40% being burned inside the first 3 months shows you how quickly that order book turns.

And historically, we'd have somewhere between 10% and 20%, 10% and 15% maybe, that is more than 12 months. That's the bit that I-40 will skew. We'll have a bit more in that pot because it goes into '27 and even into 2028. So I would take off I-40 and then assume that our normal profile exists. Even with that Austral job that I mentioned a minute ago, that's a decent sized job, but that Austral already exists in those numbers I just quoted, and they do tend to have -- they're one of the ones that has a longer burn because they're bigger contracts with large organizations.

Second half...

Second half, part 2 is the tougher ones. Probably one for David. Did I miss the figure that you've got left to spend on the ERP program? Apologies if I did, but if not, could you let us know what that is? Second one around working capital. How should we think about the dynamics around inflows, outflows, probably outflows as the business grows going forward? So it would be useful to get an update on that. Have you got any material claims settlements to come in the second half of the year? So I suspect those are all yours, David.

And the final one is probably for James around the U.S. businesses, I mean we were talking about that sort of performing probably about as well as it's ever done. You've made it into a proper holistic unit. Is there anything you can take from that and apply it to Europe and Australia, in particular, I suppose I'm thinking about that, and you just haven't had a chance yet to do it.

Okay. Let me pick up. You didn't miss the number in terms of ERP because I didn't mention it. Yes. And I think, as I said, where we are with it is we're pretty close to the final build and doing extensive acceptance testing at this time, which will continue to run for the rest of the year. And then the plan is to launch in Canada now. And I think we've got to come to a choice as to how quickly we then roll it out. And I think that will drive a cost element. And I think we've got to make a choice around that because we could do simultaneous rollouts in different parts of the world or we could just sequentially do it, which would be a lower cost but longer time.

We do think there is significant benefit for us in terms of getting it in as quickly as possible. So I think the ultimate cost associated with the ERP is still something that we need to have that conversation about how we go about the final rollout and a lot of the work that we will do in Canada in the first 3 months in terms of testing that system and process will drive that decision.

Working capital, yes, I think you're absolutely right in terms of -- I would link it to the growth of the business. And you'll see that there has been an outflow in the first half compared to this time last year. I think the I-40 has a bit of an impact because there is inventory on that. There's quite a high material content, and that has bumped our inventory cost up. But yes, I use the normal metrics in terms of linking it to the growth of the business.

Material claims settlements in the second half, don't expect anything. I mean there is -- we do have a claims register. And frankly, nothing is in that register that will -- I don't think will lend from a material perspective in the second half. Never say never. And we've had situations where clients do go, okay, let's settle. But there's nothing in the forecast in that respect.

And then your question about U.S. performance is a great question. So I would say that One Keller, Mike and David's One Keller program has been pretty universally successful. So I think some of the history that existed in the U.S. also existed in Europe with different regions and countries not particularly working very well together, and that's not what I see now. There's a very collaborative approach. Of course, the one advantage that the U.S. has that I'd like Europe to have more of is scale. So we're massive in the U.S. and we have a good number of people. And therefore, I think that drives an overall higher capability. So some more scale in Europe would be good.

I think in Australia, yes, there are also opportunities, but we're already on the road with that because Keller Australia and Austral work a lot more together than I think they have done in the past. We've seen quite a lot of bids recently. So though Austral is more of a civils business, more of almost a general contractor, there are -- and they are experts in particularly in nearshore marine. There are elements where Keller Australia can come in and work with them. So we're seeing quite a bit more of that.

And then I think the final opportunity for us is really -- and this is mostly to do with how busy they are rather than how willing they are, but there is such capability in our U.S. business that I think they can help the other regions a bit more with some of the things we do. And in fact, we started a little bit of that in APAC where there have been some U.S. defense opportunities in certain parts of the world that are in that region. And we've seen more partnering up between the U.S. business and our other regions to drive opportunity.

Yes. And just to -- I think there is a bit of a difference, a structural difference between North America and Europe as well in terms of the regulatory environment. It's one regulatory environment in the U.S. So that's one factor, I think, because you have different regulations in France and Germany. You can't move a driller from France to Germany very easily. You've got to have German papers in order to do that. So that's one difference. And then I think the level of vertical integration as well is a bit of a factor in terms of pricing, not much vertical integration in the U.S. and a lot of it in Europe, which makes things very, very competitive.

We just got 3 questions that have come in on the webcast to finish off the Q&A. The first one is from Bruno Berry from West Yorkshire Pension Fund. And he's asked, the U.K. is a relatively small part within Keller. Any thoughts about the prospect for this market, level of competition or M&A opportunities? And then 2 final questions have come in from Rob Chantry at Berenberg. Could you give us some more color on the economic characteristics of data centers just in terms of resources needed, timings, length of bidding? And then the final question, having been involved in the I-40 project, has that opened up any broader scope for major projects, deals in terms of bidding capability, technical capability and just understanding of the process around major projects in the U.S.?

Yes. So I think if we start with the U.K., look, we're domiciled in the U.K., right? And it's a difficult market for everybody and the vertical integration that David has just described is probably the U.K. has got some of the most of it in the world. But it is an important market because of where we are and where we're domiciled. But I think we see there remain opportunities in the U.K. particularly at the more ground improvement end of things rather than the straight foundations. So we're committed to the market and we see those opportunities. And sooner or later, we believe that the U.K. market will turn and that there will be investments in infrastructure. So it's worth waiting for that.

In terms of the data centers, so we talked at full year about the number of jobs we've done and how much revenue, and it's quite easy to remember because it was basically 100 jobs for GBP 100 million of revenue. So even I can work out the math for what the average size of the job is. I think we've seen a slight uptick this year. I think the average size of the job has gone from GBP 1 million to sort of GBP 1.5 million. I think that's skewed by 1 or 2 projects where they've been a bit more complex. But in general, the thing to remember about what we do as a business is that what is being built is not the differentiating factor for the size of the job for us. The differentiating factor is the geology is what we're building or the ground that we are preparing. So a warehouse or a data center can have a completely different bill for ground improvement, ground engineering in one geography versus another geography. And that's got nothing to do with what's being built on them.

And the same applies -- just in case there's a follow-up question, which is around margin. Margins are not dictated by the subsector. Margins are much more about what technique are we applying to the job and how complex is it. And therefore, what is the range of competition that we would have for a particular job. But one thing I would say about data centers, which makes them particularly attractive for us, not universally, but in a lot of cases, schedule is incredibly important, right? Everybody is in a real hurry to get these data centers put up. And when schedule becomes the most important thing to a client, and we have to balance resources to meet that schedule, you do tend to find that margins are a little higher. So it's not universally the case with data centers, but I would say schedule being important is more prevalent in data centers than it is perhaps in other subsectors.

And then lastly, on I-40, look, we already do a lot with roads. That's why we've got that job because we have a lot of knowledge of it. I do think it demonstrates Keller's ability to do really big jobs. And I think that pre One Keller, Keller probably couldn't have done the I-40 job. It probably would have been too big. But now that we have an organization that has all the different branches and the different regions work very collaboratively with each other, we're able to share resources and meet the demands of a large project like that. That will definitely be useful for us in terms of referencing, I'm sure, because we'll get positive reputation from doing something like I-40.

Important to say, though, that that doesn't mean that we go to a strategy of wanting that bigger is better, right? Because as I said earlier, Keller's bread and butter is those smaller jobs and the smaller jobs drive the utilization of our people and the utilization of our kit. So whilst we want larger jobs, we wouldn't want to only be a large job business because that drives your productivity and your efficiency in too lumpy a way. So yes, great to have the reputation, great to have the opportunity to do more large projects, but definitely wouldn't want to just be a major project business. That wouldn't be a good route to go now.

Okay. Well, I'm conscious that this is a very busy week for reporting. So let you all go. Thank you very much for joining us today. We're obviously delighted with our excellent performance in the first half. Hopefully, it's come across how much we think it reflects the strength of our geographic diversification and just our sector agnostic Keller is supported, of course, by the brilliant people that we have out in the business. And as I've said a few times and ducked a few questions, we look forward to discussing our strategy in more detail at the Capital Markets Day in October on the afternoon of the 14th of October. In this very building. James, thank you very much. Thanks a lot.

Okay. Good morning, everybody, and thank you for coming. Welcome to the presentation of Keller's 2025 Full Year Results. For those of you who don't know, I'm James Wroath, and I was appointed Chief Executive last August.

Moving to the cautionary statements, which is a slide that I'm sure you're all very familiar with. Our agenda this morning, I'm going to take you through a brief snapshot of our results before handing over to David Burke, our CFO, who will take you through the financials in more detail. I'm then going to return to give you my initial reflections after 6 months in the business, followed by a summary and an outlook. And then finally, we'll finish with a Q&A.

So let's have a look at this results -- the results summary. The group has delivered an outstanding set of record financial results for 2025. This reflects operational and commercial improvements that are embedded across the business. Importantly, this has also been achieved despite a mixed market backdrop and a translational FX headwind.

I'm going to expand later upon the strength I believe Keller has in its business model, but geographic diversity, sector agility and resilience are definitely at the heart of the company's success.

Keller North America outperformed the wider U.S. construction market, growing revenues by 5% versus a 2% decline in the market. As expected, profitability in this division was lower versus an exceptional 2024, but nevertheless, this is a resilient result, particularly considering the softness of the U.S. residential market.

Again, as forecast, EME continues its outstanding turnaround. This was driven mainly by improvement in the performance of a previously challenging project in the Middle East in 2024 but was also supported by strong operational improvement across the businesses in Europe.

I'd just like to turn to the Middle East for a moment and acknowledge the current conflict within the region. Our priority, of course, remains the safety of our colleagues and their families, and we're in regular dialogue with our teams in the region. All our people are accounted for and are safe. Just to put the Middle East into context for the business, it's less than 5% in terms of our revenue and profit contribution within the group.

Finally, then moving to APAC. APAC has sustained its recent improvements with more revenue and profit growth, thanks to Austral and India in particular. The result of all this is an even stronger balance sheet with robust free cash flow generation, accelerating leverage reduction to a net cash position for the first time in 25 years.

These consistent returns lead us to be able to increase the dividend by 41.6% in 2025, continuing our track record of maintaining or growing the dividend since IPO. We're also able to supplement this return via the multiyear share buyback program launched last year. In 2025, we announced 2 tranches of GBP 25 million. And today, we've announced a further GBP 100 million.

I'm now going to hand over to David for a more comprehensive overview of our financial performance. David?

Thank you, James, and good morning, everybody. What can I say, another record year despite the market backdrop and the currency headwinds. In the financial results section, the key highlights that I'll bring out are the power of the portfolio, North America down as expected for market reasons, with Europe and Middle East and APAC more than making up for that. Another year of strong free cash flow generation. We are now net cash even after share buybacks. So I'll give guidance following our review of capital allocation.

Okay. Let's start with the P&L and look at underlying first. Looking at revenue, we have solid revenue growth of 5.9% on a constant currency basis against a market backdrop that hasn't been stable. You can see the breakdown by divisions with all increasing. I will talk more about divisions in future slides.

Our underlying operating profit increased by 6.5% on a constant currency basis. And we held margin rate at 7.1% despite a strong prior year. This is a very pleasing result for us and one that demonstrates the resilience of our portfolio with North America resi market challenged, the other divisions have more than made up the shortfall. I'll bridge that operating profit performance in the next slide.

Net finance costs are broadly flat and pretty much represent the outlay on the USPP fixed debt. Taxation at GBP 45.2 million is at an effective rate of 23%, similar to last year. And the underlying earnings per share has increased by 5.7% to 211.3p, driven by improved underlying profitability and the impact of the share buyback. The Board has proposed a final dividend of 52.1p, bringing the total dividend for the year to 70.4p, a 41.6% increase on 2024. I will talk more about the rationale for this when discussing capital allocation later.

We'll now move on to the operating profit's bridge slide. So moving from left to right, starting with 2024, underlying operating profit of GBP 212.6 million. There's an FX impact of GBP 7.8 million due to the dollar weakness against sterling compared to 2024.

So coming to North America first, which is down GBP 17.7 million versus last year. The reduction is driven by Suncoast, which is largely exposed to the residential market in the U.S. The price differential is predominantly driven by the great first half we had in 2024, not repeating in 2025. And the volume variance reflects the trough in resi in '25 versus '24 in the U.S.

Moving on to the block on foundations, down on last year given the strong year we had in 2024. However, I must say that, that differential is a lot less than what we envisaged at the outset of the year. The foundations business has proved itself to be quite resilient with margins holding up as the competitive environment has tightened.

The combined Moretrench RECON business has had an excellent year with favorable weather conditions ensuring more volume was worked through and with RECON undertaking a sizable LNG project in the Gulf Coast. The balancing order does include some legal settlements that came through better than our expectations in the year.

Now turning to Europe and Middle East, where operating profit was up GBP 30.7 million compared to 2024. 2024 was a low base for the division and -- but they have performed remarkably well in 2025. In Middle East, contract issues not repeating has helped along with the growth in the underlying business. All other businesses other than the U.K. have performed very well as evidenced by the green GBP 14.6 million block in what is still a tough market. The GBP 3.3 million relates to Mauritius and Seychelles, which we are winding out of from the beginning of this year.

The APAC division continues to perform solidly as evidenced by the consistent year-on-year performance from all the businesses. The Austral business continues to flourish and is building a sizable order book.

So moving to the next slide, I'll cover off non-underlying items. The analysis box shows the items that make up the GBP 10.9 million split between cash and noncash items. We continue to invest in the ERP program, and we are currently in the testing phase and expect to launch the pilot in the second half of 2026. The restructuring cost relates to the group's finance transformation program, which is now focused on North America following the setups in APAC and EME.

I'll now move on to talk about cash. The group continues to deliver very healthy free cash flow levels with GBP 175.9 million achieved in 2025. We continue to invest in CapEx, with gross CapEx levels continuing to hover around our depreciation level. Movement in working capital is predominantly driven by a higher level of advanced payments on a couple of contracts in 2024 compared to 2025.

Other call outs, cash tax payments have reduced given the change in tax treatment for R&D tax credits in the U.S., allowing a full in-year deduction. And you can see the impact of the share buyback in 2025 with the GBP 38.9 million of an outlay by the 31st of December. In the bottom right, we highlight the reconciliation to net cash on an IAS 17 covenant basis to GBP 59.7 million.

The cash generation from operations has driven the reduction to net cash on an IAS 17 basis despite the outlay on the share buybacks of GBP 38.9 million to the end of December. The improvement in December is predominantly driven by collections as the industry tends to pay up at year-end. Given this trend, we are well within our covenant limits. Our funding facilities are in a comfortable position from a quantum and tenor perspective.

We have headroom of circa GBP 730 million. This is a very resilient position and along with our cash generation capacity gives us the confidence as we look to the future at organic and inorganic opportunities. I'll talk more on capital allocation later. We are pleased with the level and quality of the order book. Whilst there is a reporting period drop, this has pretty much come back in the month of January as it always tends to do. I'll pick up on the divisional commentary in the following slides.

Coming to North America first. I've talked about the moving parts earlier. The team have done very well to grow the revenue given the residential decline outperformed the rest of the market. Looking at margin, the division has achieved a margin greater than 9% despite Suncoast's performance and the broader market backdrop. Looking at margin through the cycle, Keller North America is beginning to look comfortable at 9% -- at circa 9%. Even though the order book has reduced slightly, its quality and the visible pipeline gives us confidence for 2026. The team expects to continue to outperform the market and deliver resilient margins by focusing on key segments that support growth.

A fabulous year for Europe, Middle East with their margin gravitating to where we want them to be. The market does remain tough. The team have done a great job to grow the business, perform with excellence and deliver an impressive result. When the market turns, we are hopeful the division could deliver through-cycle margins between 5% and 6%. The order book has increased with some larger projects in the Nordics region. When the market turns, the team is very well placed to benefit with increased revenue and profit growth.

Another solid year for APAC. All businesses performing very well. The margin level achieved in 2025 is impressive given 2024 was helped by a profit on a property sale. Whilst the order book has reduced with some larger projects delivered in Austral and India, the pipeline looks good for all businesses with a bit of softness in Australia foundations. However, we do expect another solid year in 2026.

A couple of trend slides before I talk about capital allocation. Firstly, operating margin. This shows the improving profile over the last 7 years. 2025 wasn't the best market backdrop, but we still managed to achieve over 7%. This gives us confidence that the commercial mindset and contract discipline has really been embedded across the business. And this level of margin is sustainable through the cycle going forward as reflected in consensus.

Again, another trend slide, which reflects strong performance across our metrics. I showed this for the first time last year, demonstrating the step change over the last few years. This level has been sustained in 2025. These results and the movement to net cash has triggered a review of our capital allocation policy, a nice segue to the next slide.

Given the sustained financial and operational performance, the Board has reviewed our capital allocation and whilst not changing the framework, has made some changes in emphasis. Our leverage target is 0.5 to 1.5. We see no reason to change this. We have confidence in our cash generation and believe the [ range ] provides the right balance between capital efficiency, the capital requirements of the business and gives us significant financial flexibility and headroom.

Our primary capital allocation to the business, working capital and CapEx remain paramount. No change there. And in 2025, we spent gross CapEx of GBP 90.4 million. We are very proud of our dividend record. The group has a 31-year track record of maintaining or growing its dividend since listing in the stock market.

Reflecting on the evolving maturity of the business and the improved predictability of our cash flow, the Board has adopted an enhanced dividend policy, which will deliver a sustainable and progressively growing dividend, with a target cover range of 2.5x to 3.5. For 2025, we are at 3x covered compared to 4x in 2024, resulting in a dividend of 70.4p and a total cash cost of GBP 49 million.

We believe there is an opportunity to accelerate our strategic plans and enhance our market leadership positions through selective acquisitions. The value case for all potential acquisitions will be judged carefully based on clear financial and strategic criteria. We do have a pipeline, but no imminent purchase, which brings us to surplus capital and the opportunity to execute further share buybacks.

We launched 2 tranches of GBP 25 million in 2025 with the second tranche nearing completion. Today, we announced our intention to launch a further GBP 100 million buyback that we plan to undertake in 2026. The group's capital structure and the return of surplus capital will continue to be assessed on an ongoing basis, in line with the wider capital allocation framework.

That's it for me. Thank you for your attention. I'll now pass you back to James, who will take you through his reflections on the business.

Thanks, David. So I think the most important thing to say right at the start is I'm absolutely delighted to be here at Keller. And my #1 priority since joining the business has been to do nothing to disrupt the positive momentum that the business has delivered over the past few years, and as you've just seen from David's slides.

We deliver very locally, so I focused on seeing as much of the business as I can firsthand. I've learned what we do. I've understood the culture and formed a view on Keller's key strengths and the significant opportunity that we have ahead of us. This experience has been essential in preparing the ground for our strategy discussions.

So in APAC, I've been to Australia to see both of our businesses, Keller Australia and Austral as well as a trip to India. In Europe and Middle East, I visited both Dubai and Saudi Arabia in the Middle East. And I've spent time with operations teams in France. And as you can see from the fantastic photo, minus 15 in Sweden, the U.K. and Germany, and that has included our KGS manufacturing facility in Germany.

As our biggest market, I've also made a number of trips to North America, visiting sites in Canada, Texas, New York and Florida as well as our specific businesses of Moretrench, RECON and Suncoast. And if you pardon the pun, my key takeaway from all this travel is that this is a business with really strong foundations. It's built on highly engaged people with deep technical expertise and a genuine passion for adding value to projects, both big and small and across a diverse range of sectors.

Keller is really well positioned to take advantage of positive market developments and to capitalize on pretty much any construction megatrends. And finally, the strength of the balance sheet and our market-leading position in key geographies make Keller a compelling proposition for both investors, colleagues and customers.

So let's have a little look at how I see Keller's strategic process. I think this is a business where it's really important to understand history and the significant progress Keller has made over recent years because it very much informs where we are today and what our future strategic direction should look like.

At this point, I must also pay tribute to the work that Mike and David have done in the past few years to deliver a truly impressive improvement in performance. They've reset the business through a relentless focus on fundamentals. Various acquisitions over many years have been finally fully integrated and a culture is embedded that prioritizes margin delivery and execution within a clear geographic strategy. They've invested in systems and processes that will firmly embed these disciplines systemically across the group.

This means that Keller today is a disciplined organization, delivering consistent returns and a strong balance sheet. Our portfolio is diversified and sector agnostic with a commercially minded but risk-conscious culture of bidding and contracting. The 2025 results are absolutely testimony to this.

The group has demonstrated strong top and bottom line results delivery for a third year in succession as evidenced by David earlier. So going forward, underpinned by a clearly defined strategy, I see a lot of opportunity ahead. Without losing any focus on the fundamentals of margin, profit and cash delivery, I believe that Keller can evolve and continue to grow.

The Board and team completed a strategic review exercise before I joined, which identified the criticality of local market share as the key driver of earnings in our business units. Whilst we're the leader in a number of our markets across the globe, the exciting prospect for me as CEO is a significant white space for Keller to continue to grow and turn established regional market presence into new market leadership positions.

To achieve this, we must continue to invest to drive organic growth, particularly focusing on opportunities for deployment of our industry-leading portfolio of products and techniques. We can also further leverage the sector agnosticism of our offer by targeting customer segments where we are currently underrepresented, such as nearshore mining -- sorry, nearshore marine in India, mining in Canada or federal government work in the U.S.

Bolt-on M&A in certain markets can also be a key tool to further accelerate organic growth. This growth will be supported by process-driven operational excellence, harnessing the power of the global group and its strong culture of engineering innovation with the latest developments in technology and AI. And finally, as David has outlined, our capital allocation priorities underpin our growth strategy and our ability to generate returns for shareholders.

I want to pause for a moment to show you Keller's investment case. This is a slide that has been presented before. The significant strategic progress made over recent years, combined with our positioning for continued success, creates a compelling investment case for Keller. Although, as I say, this slide has been presented before, I wanted to repeat it because the essential elements remain true today. Keller does have a proven strategy that delivers resilient revenues, sustainable margins and strong cash generation. This is absolutely built on disciplined governance and sector agnosticism that means we can capitalize on favorable market trends around the world. As I look to develop this further over the coming months, we're going to focus on Keller's growth potential, underpinned by the engineering excellence inherent in our business model.

As I said previously, the central conclusion of the 2025 strategy work was the criticality of local market share. This slide illustrates our position across our areas of operation, but it also clearly shows the great work that's been achieved optimizing our geographic portfolio and making sure we are in the right places in the world. Keller has leading or established positions in our primary markets, but with room to grow either organically or inorganically or through a combination of both.

Our success today has been built on this strategy and the more recent disciplined integration of the group. We win with consistent high-quality delivery for customers in local markets, establishing Keller as a trusted partner and creating a virtuous circle that drives further market share over time.

So a little bit about how I see our strategy. Firstly, we anticipate holding a capital markets event in the second half of this year, where we will lay out our strategic plans in more detail. The focus of this is going to be on 3 strategic levers. Firstly, as you've just seen, Keller's portfolio of businesses and our branch network is a real strength. Geographically, we are well positioned to capitalize on favorable market trends, and we're in countries where we are confident that we can contract robustly and more importantly, collect the cash.

Our portfolio of products is also impressive. On our website, you can see 50 different techniques. Not every one of those 50 is appropriate everywhere, but the broad scope of capability is one of the key features that makes Keller a market leader. Furthermore, given we are the largest geotechnical provider, we can leverage our rig capacity to get work done quicker.

Secondly, performance is critical. The strategy work indicated that price and reputation are customers' 2 key buying priorities. We need to continue to be safe, efficient and innovative to deliver solutions that continue to generate significant value for our customers.

Finally, then we're going to focus on pipeline. This is where it all comes together. We have an optimal geographic footprint with the ability to deploy our portfolio of products globally. Growth in our pipeline will arise from more systematic and widespread deployment of techniques, allowing us to access new customer segments to drive market share.

I want to illustrate this through a couple of case studies. And one of the reasons I want to do that is because one of the main things I love about Keller is just how many inspiring projects we work on. And you can see as you go through this presentation, the number of photos from real-life projects, and I could talk for quite a long time about most of them. And I know listening from previous feedback that this is something that shareholders want to hear more about and this room wants to hear more about.

So the first one is a case study from Lulea in Sweden. It is where the lovely picture of me came from. This is an ongoing project. It's risen out of an investment that the business made before I joined in Northern Sweden. We opened a small office because we believe that there will be opportunities arising from an iron ore-rich area. This proved to be a really shrewd move as shortly after SSAB announced the construction of a new fossil-free steel mill in Sweden.

On receipt of some early requests for support, largely with the design for seeing concrete piles, our design team went to work and saw an opportunity to value engineer a much more cost-effective and lower carbon solution. The team brought together a range of Keller experts from around the world and deployed a wider range of techniques, including vibro compaction and vibro stone columns, dynamic compaction and wet soil mixing. In combination with the originally envisaged concrete piles for the heaviest load areas, this produced an optimal cost-effective design for the customer and was therefore chosen as the winning concept.

Furthermore, as we execute the project, Keller brings engineers from around the world into a relatively remote geography to ensure that we deliver on plan. Geotechnical engineering services are often bought from local contractors for local market delivery. However, this example illustrates perfectly how Keller can bring the strength of the group's collective expertise to win business and to deliver superior results for customers.

The second case study I'd like to talk to you about briefly is data centers, which is another area that we get a significant amount of questions on, has been a significant area of focus during investor meetings since I joined the business.

So following on from warehouses post-COVID and then EV gigafactories, the data centers are a great illustration of how our sector-agnostic business model can pivot to the latest growth opportunities within our industry. Growth in AI and demand for high-powered computing is clearly a global megatrend, and data centers present an attractive opportunity for Keller. We've got a strong pipeline of this work across the group, and we're well positioned to meet demand.

They're also, though, a good example of the importance to Keller of smaller jobs as well as our higher profile big contracts. In terms of contract scale, in 2025, around 90% of Keller's global contracts were less than GBP 1 million in value. And these projects amounted to around 30% of our revenue. A steady flow of smaller jobs is hugely important in our revenue mix and provide both a reliable revenue stream and the opportunity to maximize our resource utilization.

The Serverfarm development in Texas is one of the many data centers we've worked on in North America that fit this profile and had a revenue of less than GBP 0.5 million. It was a design and build project, where we redeveloped an existing site. And through our design solution and real-time adjustments, we completed the project in around 6 weeks, deploying 10 rigs and installing 1,475 piles. In 2025, we completed 120 data center projects in North America that contributed more than GBP 100 million of revenue to the group.

And finally, moving to a summary and outlook. Looking ahead, while we remain mindful of macroeconomic uncertainty, the group enters the new financial year with a high-quality order book, healthy tendering activity, a strong balance sheet and clear strategic direction. The actions taken by management that led to the operational and financial improvements achieved in recent years have continued to be embedded across the group, giving me confidence that our operational performance is sustainable over the medium term.

The majority of our markets are robust and bidding activity is at a healthy level. We're well placed to address the demand for our services being fueled by long-term structural growth drivers, including infrastructure investment, population growth, energy transition, climate resilience and the adoption of new technology. We have a clear growth strategy to enhance our position in the chosen markets -- in our chosen markets by continuing to offer solutions backed by our product and engineering capability and by focusing on higher-growth customer segments.

As we grow, we will not lose the exceptional culture of margin discipline that has become a critical part of Keller's DNA. And as I said previously, we plan to share with you in more detail our growth strategy plans at a Capital Markets Day in the second half. I am confident that the group is well placed to build further on its momentum and to deliver further progress in 2026 and in the years ahead.

Thank you very much. So as I said, we'll now move to Q&A, which I'll let David compare.

Rob Chantry at Berenberg. Three questions. So firstly, just a bit more color, I guess, on the North American and European M&A backdrop. Can you just give us some context around how many companies are out there? How many relevant? What are price expectations doing in both regions? Is there any kind of main reasons you've not executed any so far?

And secondly, Germany, can you just give us some more color on what you're seeing on the ground there with regards to infrastructure fiscal spend? We're hearing quite a lot, but clearly, it's quite early days. Is there any color you've got on key end markets or timing with that?

And then thirdly, Suncoast, clearly, the pricing dynamic was a huge factor in the '26 -- rather '25 results. Are there any remaining lags to consider going forward into '26, '27? Or would you consider full year '25 pricing normalized?

Thanks, Rob. So I'll leave Suncoast to you David. Maybe I'll have a go at the first 2 and then you can fill in any gaps. So firstly, M&A, look, I mean, even before I joined the business was doing a lot of scanning around M&A. It's fair to say that this is a very local business, as I said in the presentation, and that means it's highly fragmented, and that means there are a lot of potential M&A targets to look at. I think the strategy work identified a number of above 1,000 just in the U.S. alone.

You'll ask why haven't we done anything? I'll try not to say this too often, but I've only been here 6 months. So I do want to take time to understand where we might need organic help to accelerate -- inorganic help to accelerate organic growth. So I'm picking up the work that's been done, and we're looking at things in both Europe and North America.

In terms of price, a little difficult to say unless you get a lot further in terms of discussions. Clearly, David and Mike have talked in the past about there being a differential between the price in the U.S. and Europe. I would say that anecdotally, that's probably narrowed a little bit. I think maybe some of the very narrow businesses in the U.S. and the decline in the market and some of the markets that we're looking at means that some of the prices have perhaps cooled a little. I don't think that puts us off looking at acquisitions because for us, it's more about the revenue synergies we can generate from bringing our techniques to any particular acquisition. So we almost see that as an opportunity.

In terms of Germany -- sorry, David, is there anything you want to add on M&A?

No, no, that's fine.

In terms of Germany, I think we'd say at the moment, we haven't seen anything. I think we've heard the discussion that you've heard about potential future infrastructure spend. I mean the business has done some big jobs in Germany from infrastructure. You'll have heard about the Rauheberg Tunnel that was talked about in 2024. So we're well positioned for that. But at the moment, we're not seeing it. I don't think it's a great time to make big political comments, but I would assume that a lot of it is hanging on whatever happens in terms of the Ukraine conflict and where public spending across Europe has to be prioritized, but we're well positioned to capitalize.

Yes, yes. So on Suncoast, that red block that you saw in the waterfall diagram really is a representation of a pricing boom that was there in '24, and it was the first half of '24 that we benefited from that. That's pretty much been gone since the second half of '25 -- sorry, '24 and wasn't really there at all in '25. So from a look-forward perspective, we do think that pricing has normalized and really what will move the dial for us in terms of Suncoast will be volume going forward.

And in terms of our view of that in our forecasting for '26, we haven't put too much emphasis on that improving. I think it will really be dependent on rate cuts in the U.S. in respect of that moving. So I think it's in a trough at the moment, and it continues to be there. Hopefully, by the second half of the year, we should see it come out of there. But we're not building a whole lot of profitability into the forecast on that basis.

Aynsley Lammin from Investec. Just 2 for me, please. On the U.S., maybe just a bit more color kind of you said the order book is still good, good tendering, which end markets are kind of better, which are slower? And just kind of what are the people saying on the ground in terms of underlying trends of construction markets for this year?

And then secondly, I guess, just on the M&A, any indication in terms of size? What's the kind of level of market share that you'd like to get? I think you say 12% for the group, but when the margins really start to get supported in terms of a market share level?

Yes. So taking the first one, we obviously take a view on or look at the data around which major sectors we're seeing bidding activity. And for our business at the moment, there's quite an uptick in the U.S. around infrastructure and public spend. We've got a couple of quite big projects ongoing at the moment around the Hudson River, which I think there was a photo on the Hudson River in there and also on I-40, where there's a repair after one of the hurricanes. So we're seeing a bit of a skewing towards infrastructure and public and obviously, a bit of a downturn in terms of residential at the moment.

But again, David and I must have used the phrase 10 times in the presentation around sector agnosticism. That is the beauty of the Keller business model that we can pivot between the different opportunities that exist. From an M&A perspective, size, I don't want to put a specific number on it, but David has always talked about bolt-on, and I'm absolutely within that. I think you talked about less, that meaning sub GBP 100 million. I think it's probably a bit less than that, to be honest.

Our focus would be -- or my focus would be on opportunities that can drive either geographic revenue synergies, so filling in a bit of white space. It's not about going to different countries, it's just some country -- big countries, in particular, there will be certain areas where we could have more local presence. It might be about buying somebody where a technique, they were particularly strong in a technique that we'll obviously do because we have the 50 techniques around the world, but we're stronger in some places than others or it might be a customer subsector where we're not quite as strong. And I think the greatest value for accelerating organic growth through inorganic comes from acquiring something that helps us with 1 of those 3 things or preferably more than one of them, geography, the technique and the subsector.

In terms of market share, market shares are really interesting because it's such a local market, and I think David said this a number of times. When we think about markets, we don't think about the U.S. We don't even think about Florida. We think about Miami. We think about Tampa. So the 12% is interesting but sort of meaningless because it's more about what is our market share in Tampa, what is our market share in Florida. And the work that was done and the work that informs the globe that I showed earlier is done at a very, very local level. So that's where we'll absolutely be focusing.

Joe Brent from Panmure Liberum. Three questions from me as well, if I may. Firstly, can you give us some indication of the legal settlements that you talked about in the profit bridge?

Secondly, you talked about some of the faster growth areas you're focusing on. I would be interested to have a little bit more color on that. And probably related, you said that data centers has been a good market. Do you see that as continuing to grow from this increased level going forward?

Okay, I'll do legal settlement.

Yes. So you would have seen the block in the waterfall and the value that's on that. So these are legal settlements that happen quite often in the business, but I thought it was only right in the interest of transparency that we bring out the fact that in '25, we had some good ones that did just come through and they're embedded in that number. Sorry?

[ Is that the full GBP 7 million, I think ].

GBP 7 million is a net number in terms of other things. I think it's probably fair to say it's single-digit millions in terms of the overall impact.

And then on the other 2 faster growth areas, I would -- look first to say, it comes back a little bit to Aynsley's question, we're seeing infrastructure and public across the globe about 7 percentage points higher in our order -- forward order book than it was in 2025 actual. So that's certainly coming through for us. If you'll allow me, we'll talk a bit more about the sort of future faster growth areas when it comes to the Capital Markets Day because that's where I want to bring more focus to that.

But your third question, absolutely data centers. We gave some stats around North America in the presentation, but we're doing data centers around the world. They are very interesting, and there's a lot of them. I would just underscore that they are smaller jobs. So they're not likely in GBP 100 million in North America, they're not likely to make a massive movement in terms of our revenue numbers, but they are very good in terms of productivity and getting in and out. So they are pretty critical.

And they are also quite often, they are -- they play to Keller's expertise because they are technically reasonably difficult, right, because the data center has to be, as you'd expect, incredibly -- on incredibly solid foundation. So therefore, Keller's reputation, Keller's expertise plays into that. But as I say, on both those questions, we'll dive deeper, both from a geographical and from a segment perspective in the Capital Markets Day.

Ben Varrow from RBC. I'll do 3 as well, please. First one, just on the U.S. Obviously, you've outperformed last year. Can you shed some light on your expectations for market growth this year and whether you think you can maintain the same level of outperformance?

And then coming, sorry, back to growth as well, on a sort of 3- to 5-year view, just to get your initial sense of the relevance of M&A versus organic in that growth mix. And then within that, on organic growth, do you see many opportunities to accelerate organic growth without doing bolt-ons? Or are bolt-ons really the unlock to drive organic growth?

Yes. Would you mind saying the U.S. performance?

Yes. I think in terms of 2026, the order book, as James has mentioned, is strong, and we're quite pleased with the quality of that. Bidding levels are still -- the teams are as busy as ever in terms of bidding. And as we sit here today, we have no reason to believe that we shouldn't repeat what we've done in '25 and '26 in North America. There has been some weather issues in the early part of the year, but we don't see that as a challenge. We should be able to get that back as we go through the year.

And then if I could just take your other 2 questions together. I mean, firstly, they're really helpful questions in preparing for our Capital Markets Day. So thank you. And we'll bring out some more numbers as part of that process. Look, there are certain areas of the world that it's clear to me we don't need inorganic, right? There are some areas where we can make investments. Lulea is a great example, right? That's completely organic, setting up an office somewhere where Mike and David and our EME team suspected there might be an opportunity, turned out the opportunity was completely different from -- well, actually not completely different because obviously, a steel plant is connected to the iron ore area, but we actually thought there will be more work around the railways that are moving the iron ore around.

So we organically invested in an area and then a massive opportunity comes up and now our business in Keller Sweden has grown exponentially. So there are definitely those opportunities around the world. And in truth, Keller could choose to only grow organically, right? The reality is that's about investing in people and putting people into different geographies and different markets. In my view, though, some of that will be too slow, right? If you're trying to crack into a new subsector, let's give an example, federal in the U.S., right, where we do quite a lot of work for public authorities in the U.S., but not so much for the federal government. You'd have to hire people. We would have to hire people who are very experienced in federal bidding. But then beyond that, you have to have the reputation that goes with it and just hiring people doesn't bring Keller that reputation. So a 5-year plus organic time line could be much quicker to deliver within an inorganic time frame.

And then to your point about, well, where does that -- where is the proportion of growth between organic and inorganic? I think, as I say, we'll take that question and put it into our CMD preparation. But I think the reality is that what inorganic can provide is the spark for the organic growth. So in that example, if I were to buy a business that was selling 3, 4, 5 techniques into the federal government in the U.S. and I bring our other 20 that we're doing in the U.S. for different customers to that customer relationship, I drive a lot of revenue synergy in my view. So whether you then say that's organic or inorganic is kind of a moot point. The inorganic, organic debate for me is all about speed. And there are certain areas where I think we will want to grow with a pace and therefore, the smaller bolt-on inorganic acquisition will really help us to accelerate that growth journey. But yes, we want to take the right amount of time to be clear on where we really need to make that investment versus a Lulea-type opportunity where we can literally open an office with 3 or 4 people and organically grow.

Johnny Coubrough from Deutsche Numis. Firstly, in terms of capacity utilization, James, you mentioned that the smaller jobs are really important for, I think you said resource utilization. I'd be interested to hear where you think capacity utilization is across the North American foundations business. And related to that, I know David you're guiding to CapEx in line with depreciation, but presumably, you're still depreciating a lot of kit that was bought 7 years plus ago when -- since then, we've had a lot of increase in costs of machinery. So do you think you can maintain that through the cycle?

And then the last one would be going back to the portfolio and you had a slide in the presentation showing where you're market leader versus -- perhaps not market leader. I mean it looks like in Europe, I appreciate that's white space to grow into. But do you feel there are some markets where you'd rather not be in them?

Thanks. So if you can take the middle one, David.

Yes, yes.

So capacity, great question. And I'll be honest with you, I'm still trying to get my head around capacity utilization to a certain degree within Keller. It's quite easy to see with equipment. It's harder to see with people, not so much the people who are doing the physical work, but the management, the amount we can cope with from a bidding perspective is an interesting question. There are a couple of reasons why the smaller jobs are important. One, as I said in the presentation, because it's easier to move rigs from one job, particularly in very tight geographies where we have a lot of strong market share. It's easier to just move those rigs around rather than have them tied up for long periods of time.

The other thing that's important that we keep doing the smaller jobs is that I don't -- particularly in North America, I don't want Keller to become a very lumpy business just doing major projects, right? Because that may -- it becomes -- obviously, everything is binary, you win or you don't win. But if you're binary around just major projects, you can end up with space and time where you're waiting for the next job, and that's not good. So the combination of the 2 allows us to have much greater utilization.

I think one of the questions that -- one of the questions I want to be able to answer is how much is this business, particularly in North America, capable of from a revenue perspective. Now there's mix in there because you can distort that with 1 or 2 very big jobs. But understanding how much we're capable of and how much we need to grow the organization is one of the key questions before that CMD and understanding the growth plans.

If I just -- I'll take your third question and then hand over to David for depreciation. I'm really pretty happy with the geographic footprint that I inherit. I think as I say, I think Mike and David have done the hard yards in terms of getting us into the right places and out of the wrong ones. So I really see it all as opportunity. You're right to highlight Europe. All the markets are different in Keller, which makes it even more fascinating industry. But in Europe, obviously, we've got some very -- some of the very biggest almost global competitors there.

What I like about what's been done in the last few years, though, is we sort of have -- some people in my business don't me describing it this way, but sort of a hub-and-spoke management, right? So we will support other countries from bigger countries, a bit like we did with Sweden, actually. We didn't have a huge local presence in Sweden. We were supporting it from one of the other European regions. But then as it grew, we're able to then invest more resources and now Sweden is much more -- well, Sweden is stand-alone within that unit. So I think we have the right model with Europe. And I think as eventually Europe turns on its spend -- construction spend, I think we're really well positioned to capitalize on that, and I think we can grow share as that happens.

Yes. On CapEx and depreciation, I mean, you look at constraints in terms of growth. And I think James is absolutely right that we don't consider equipment to be a constraint. It is more around people. I think a couple of features of what we've done over the last couple of years in the CapEx space. One is we've got a discipline in around making decisions in respect of acquiring equipment. And there is a rental market for rigs, and we get people to go through the process of asking themselves whether we should be renting or whether we should be buying. I think as a result of that, I think we can -- with the rental market, we can ramp up as needs to be. And you've seen that with the Serverfarm example where we were able to put 6 rigs on a job in the space of 5, 6 weeks.

I think the other feature from the last couple of years is we have actually reduced the lifespan of our fleet of rigs over the last number of years. We're probably not 3 or 4 years off the lifespan in terms of churning the rigs across the business. And we are -- we do look a whole lot more at a global level in terms of rigs than what we used to. And -- but it's still very much managed locally.

And the one thing I always look out for as we start to churn through the rigs is when we do sell all rigs, are we making profit on sale of the rigs or are we making losses? Because if we're making losses, that means our depreciation charges aren't right. But actually, we've been consistently making minor profits in terms of any sales. So I'm very comfortable with the depreciation rate we've set in the business as well.

Clyde Lewis, Peel Hunt. I've got 3, if I may. You've not said much today on costs. Do we take from that, that everything is relatively under control and pretty benign? It would be useful to get an update on where you are there. And I suppose a corollary to that would be whether the sort of pricing and the bidding that you're out there for new work, whether that is covering any cost pressures that might be there. And the second, I suppose, third ones would be useful to get more of an update on Canada and India as to how the operations are going there currently.

You'll take the costs. Yes, I mean we are a relatively short form business. So we do get the opportunity to reprice. And where we don't, if we are entering into longer-term contracts, then we'll try to contractually protect ourselves. We'll either have price escalation embedded in the contract or we'll hand that risk over to the client, depending on what the client wants. So we are able to pass it on. I do think there is some investment which we are doing, and you can see there's an increase in the central costs. We have -- we are -- as the business is growing, we are bringing in the right functional level of expertise. We've got a new General Counsel, which is a new cost for us, and we've invested a bit in HR in terms of some of our processes and people as well. But I think that's all good stuff for us to be doing, and we are covering it in terms of the margin.

Yes, short order business, which means that, that link between pricing and cost is pretty well used muscle within the business, I would say, we're pretty reactive to it. Canada and India, so yes, really interesting markets. Canada was the first place I visited. So I know for those that are longer in the tooth with Keller, I think Canada has had a bit of a mixed reputation. I visited a business that's completely unified under one management and everybody has got very, very clear focus.

And a lot of really good young-ish talent actually, a lot of really strong engineering talent. And the 2 pieces of work that I visited were both to do with the Toronto Metro extension. So I think we're pretty optimistic about our market positioning in Canada, but also what opportunities there might be. And without too far into our sort of commercial plans, there are a few areas, one of which I did reference in the script around Canada, where we might be able to make some organic investments and see more opportunities.

India, yes, I -- it was my first ever trip to India. Actually, I've never run a part of a business that's had India in its portfolio. So it was a new experience for me, and the whole country is just full of entrepreneurial energy and investment. We are -- if anything, with India, it's more -- that we're cautious about those projects we do and don't work on within that market. And we're quite selective. We have a very impressively local management team. So I think not all but some global businesses perhaps bring quite a lot of people into markets like India. Ours is very much a local team, and they've grown up with the business and in my view, have the potential to continue growing with it.

The interesting -- or the most interesting parts for us are the things outside of the cities and marine is a particularly interesting one. So when I went, I visited an hour outside Chennai, which isn't very far, but an hour's drive outside Chennai and a port where they're sort of doubling capacity, and we're doing a lot of work in terms of preparing what was beach into capacity for more cranes. And just on that one specific, India is announcing more and more investments almost on a daily basis into their ports. So we see a lot of opportunities in India. We want to make sure that we capitalize on those, but we also want to make sure that we're sensible about the projects that we take on, but very, very exciting.

And it's one of the great things about Keller that yes, as I said in the presentation, there are some markets that are difficult, right, around the world. But the geographic diversity that we have means that if you're ever feeling depressed about a market, you can always spend half an hour thinking about another one where there's much more optimism and much more opportunity for growth. India is definitely my go-to if I'm ever feeling that.

Stephen Rawlinson from Applied Value. One of the things that you've not really talked about today is in and around your observations about Keller's involvement in early contractor involvement in projects, design work, which would be higher-margin business. It may be an agenda item for your Capital Markets Day later, but your observations on that. I mean, quite clear, there's a huge amount of expertise within the company. But if you talk to other contractors, they're always talking about much greater involvement in the earlier stages of a project in its design phase. You are obviously involved in the early stage of any project. But is there a scope? Do you see it now as an observation to get more involved in consultancy, design work, et cetera, rather than simply digging to other people's recipes?

So firstly, I'm sorry if I've underplayed it, right? The expertise within this business is enormous and profound, right? But very specialist and very much focused on our knitting, right? We know what we're good at. The level of education in the business through bachelors, masters and PhDs is really outstanding. And even when we're not paid for design, we're always pretty much -- as far as I can see, we're almost pretty much asked for our opinion on design.

And our engineers are -- first and foremost, they're passionate about being engineers, right? I mean they love working for Keller. Keller is seen as a market leader of us both as a business with customers, but also as an employee brand. But fundamentally, they're engineers and you can feel if you talk about a project, they light up around the details of it. And there's no way that I or David could say to them, don't share your opinion unless we're getting paid for it, right? It just -- it isn't how the business works.

But what I would say is yes, we always drive for higher margin, but the reality is where our margins are versus the wider construction sector shows you the value that we bring to projects. And yes, sometimes -- we're always better paid if it's design and build. I'd sort of characterize it as design and build, there's advice and build and then there's just build. But even the just build has a certain amount of advice in it. And yes, the margin will be higher at design and build level. But our margins are still pretty good at a build level as well.

So consultancy, consultants already exist in our space, to be honest. They phone quite a lot when they're doing their consultancy work. I'm not -- I haven't finally finished the thought on it, but I'm not convinced that's an avenue for us. I think the full service -- I think the integrated offer that we provide works pretty well. We just need to make sure that when we're giving that advice that we're getting our reward for it.

Take the project like Lulea, I mean, our team really didn't -- I don't think that was -- it wasn't design and build, right? That was a design done by the client, done by a consultant. Our team completely value engineered that design, brought the cost down significantly, lowered the carbon. And our reward for that was winning the project, right? Still a competitive market, very competitive market in some areas around execution. So sometimes we're trading that advice, we're trading that knowledge for making sure that we're the ones who win it and then we win the project at a decent executional margin. So -- but I take the feedback as well because if I've underplayed that, I don't want to, right? This is a business, where if you go and visit any of our sites and talk to any of our people on the ground who are delivering or the bid managers, it's just the level of expertise is just really incredible.

So I think that brings us to the end. Just one final thing I'd like to say before we finish because I know a number of you have been in and around Keller for a number of years. This is sadly, but maybe not for her, Caroline Crampton's last day with Keller. She stayed with us until today's results day. I have only obviously worked with Caroline for 6 months, but I wanted to publicly say she is an absolute outstanding IR professional. Keller has been very lucky to have her. We wish her all the best wishes for her trip to Vietnam. She's not leaving us because she doesn't like me, by the way. Maybe she is, I haven't asked her. But we wish her all the very best for her travels. Huge thank you, and yes, good luck.

Yes. Just to add to that in terms of the last 5 years, it's been a real pleasure. These days and the weeks that follow have been made a whole lot easier, and I'm sure the guys who have been interacting with you will also agree. So thank you very much for your time. We'll miss you desperately, but we've got Nicola to take us forward. But yes, it's real shame, but good luck, and thank you very much.

Thank you, Caroline. And thanks, everyone, for coming.