This article first appeared on GuruFocus .
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Revenue:Up 11% on a constant currency basis in H1 2026.
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Underlying Operating Profit:Increased 17.1% on a constant currency basis.
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Operating Margin:Improved to 7.3%.
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Underlying Earnings Per Share:Increased by 22%.
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Interim Dividend:Increased 57% to 0.287 per share.
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North America Revenue:Up 16.7% to 984.4 million at constant currency.
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North America Operating Profit:Up 17.7% to 93.8 million at constant currency, with margins steady at 9.5%.
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EMEA Revenue:Down 5.2% to 396.1 million at constant currency.
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EMEA Operating Profit:Up 28% to 19.2 million, with margin improved to 4.8% from 3.6%.
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APAC Revenue:Up 22.8% to 227.5 million.
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APAC Operating Profit:Broadly flat at 13.8 million.
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Net Finance Costs:Slightly reduced.
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Taxation:Effective rate of 23%, similar to last year.
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Free Cash Flow:Marginally increased, but conversion rate reduced due to increased working capital and CapEx.
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Net Debt:15.9 million on an IAS 17 covenant basis.
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Order Book:Up 20% overall, with North America up to 1,367.9 million, EMEA up 16.5% to 396.7 million, and APAC down 18.9% to 174.6 million.
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Data Center Revenue:Now represents 9% of group revenue, compared with 3% in 2025.
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Multifamily Residential Revenue:Declined by approximately a third, largely due to Miami.
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record financial performance with revenue up 11% and underlying operating profit up 17.1% on a constant currency basis, marking the fourth consecutive record year.
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Strong growth in North America and APAC, driven by data center and infrastructure projects, with North America revenue up 16.7% and APAC up 22.8%.
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Improved operating margin to 7.3%, reflecting portfolio resilience and disciplined execution despite market challenges.
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Order book up 20% to 1.9 billion, underpinned by major infrastructure awards like the I-40 project, providing strong visibility for future revenue.
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Robust balance sheet with net cash for most of H1, 655 million headroom, and increased interim dividend by 57%, reflecting confidence in cash generation.
Negative Points
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EMEA revenue declined 5.2% due to Q1 weather disruption, fewer large projects, and reduced Trojena revenue, with the UK market particularly challenging.
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South Florida residential market weakness, with major developments delayed and multifamily revenue down by approximately a third.
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Moretrench business underperformed due to the impact of the Iran War on input costs, limiting investment and reducing profitability.
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Keller Australia faced margin pressures from pricing competition and severe Queensland weather, leading to flat operating profit despite record revenues.
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Free cash flow conversion reduced due to increased working capital and CapEx, with no material claim settlements expected in H2.
Q & A Highlights
Q: Can you provide more color on the data center megatrend in the US, including its geographic spread and expected longevity? Also, what is the current status of cost inflation on materials like cement and steel, and is the step-up in EMEA margins a structural improvement or just a function of better project execution? A: James Wroath (CEO): Data centers are spread across the US, both rural and urban, and we are still relatively early in the cycle, with projections of $650 billion in spending. We prefer projects in challenging geological conditions as they require more of our expertise. David Burke (CFO): On cost inflation, we are a short-order business, so we can reprice, and we include escalation clauses on longer-term projects. The impact from the Iran war on fuel costs was not material. On EMEA margins, the improvement is a combination of the non-repeat of the zero-margin Trojena project, strong volumes in the UAE, and excellent execution across the rest of the business despite a sluggish market. There is likely more upside if the market turns.
Q: Can you give an update on the performance of the Canadian business, the status of the M&A pipeline, and why data centers are not a top-five subsector in Europe? A: David Burke (CFO): Canada has transformed its delivery and had a very good 2025, continuing that momentum with significant infrastructure work, including projects for the Toronto Metro. James Wroath (CEO): On M&A, we are being patient and focusing on organic growth, which is currently excellent. We have a pipeline and are actively looking, but we want to ensure any acquisition makes a real difference without disrupting momentum. On European data centers, we are not seeing the same level of opportunities as in the US or Australia, which may be due to fewer being built or our market positioning. We will provide more analysis at the Capital Markets Day.
Q: Regarding the record order book, is the extended duration solely due to the I-40 project, and what is the current visibility for growth into 2027? Also, are there any plans for further divestments to streamline the group? A: David Burke (CFO): The I-40 project is a significant factor, with its revenue spread evenly across 2026, 2027, and 2028. Excluding that, the order book profile is normal, with about two-thirds executed within six months. We see good tendering levels and no reason for a drop-off into 2027. James Wroath (CEO): On divestments, we are happy with our geographic portfolio. We have exited smaller areas like Mauritius and Seychelles, and there is nothing material left to divest. The model allows us to pivot to opportunities, like a recent job in Iceland, without needing a permanent presence.
Q: What are the key bottlenecks to growth, especially in North America, and how much of the record order book will be executed in the next six months versus beyond? A: James Wroath (CEO): The main bottleneck is people, particularly specialist rig operators and site supervisors. We are investing in talent planning to address this. Equipment is not an issue as we can rent. We want to grow cautiously with the available volume. On the order book, excluding I-40, we burn through about two-thirds in six months, with 35-40% in the first three months. Our average job size is between 0.5 million and 1 million, so the order book turns quickly. Historically, 10-15% of the order book extends beyond 12 months, and I-40 will skew that higher.
Q: What is the remaining spend on the ERP program, how should we think about working capital dynamics, and are there any material claim settlements expected in H2? Also, can the success of the US "One Keller" model be applied to Europe and Australia? A: David Burke (CFO): We didn't provide a specific number for ERP spend as we are finalizing the build and testing. The rollout cost will depend on whether we do simultaneous or sequential rollouts. On working capital, outflows are linked to business growth, with I-40 having a high material content that increased inventory. We don't expect any material claim settlements in H2. James Wroath (CEO): The One Keller program has been universally successful, including in Europe, where collaboration has improved. The US benefits from scale, which we would like in Europe. In Australia, Keller Australia and Austral are already working more closely on bids. The US business also has capability that can help other regions, and we've seen partnering on defense opportunities in APAC.
Q: What are the prospects for the UK market, given its challenges, and what are the economic characteristics of data center projects in terms of resources, timing, and bidding? Also, has the I-40 project opened up broader scope for major projects? A: James Wroath (CEO): The UK is a difficult market with high vertical integration, but it's important as our domicile. We see opportunities in ground improvement and believe the market will eventually turn with infrastructure investment. On data centers, the average job size has increased slightly to 1-1.5 million, but the key differentiator is geology, not the building type. Margins are driven by technique complexity and competition, not the subsector. Data centers are attractive because schedule is critical, often leading to higher margins. On I-40, it demonstrates our ability to handle large projects, which we couldn't have done pre-One Keller. It will enhance our reputation, but we don't want to become a major-project-only business, as smaller jobs drive utilization and efficiency.
Q: Can you elaborate on the performance of the North American division, particularly the drivers of growth and any challenges? A: David Burke (CFO): North America delivered record H1 results with revenue up 16.7% and operating profit up 17.7%. Growth was driven by data centers and infrastructure projects like I-40, Hudson River Tunnels, and Second Avenue Subway. However, the Miami residential market has weakened, with projects delayed due to interest rate concerns. Suncoast improved on a low base, while Moretrench faced challenges due to the Iran war impacting input costs. RECON performed well on an LNG project.
Q: How is the EMEA division performing despite the Middle East conflict and tough market conditions? A: James Wroath (CEO): EMEA revenue was down 5.2%, but operating profit was up 28% to 19.2 million, with margins improving to 4.8%. The Middle East, particularly the
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
