Keller secures £50m job on first phase of ‘mega-city’ build

Keller has been selected as part of a group of contractors who will help to build a new mega-city.

The ground-engineering specialist was named as one of the contractors on the NEOM Giga project, which will see the creation of a metropolis in the north west of Saudi Arabia.

Keller, which has also published a trading update, will start work on a portion of one of the 135 modules that are being built for the project, worth approximately £50m to the group.

The first phase of the scheme has been labelled “the line” and will see a number of buildings constructed, spanning 170 kilometres.

Keller has signed an umbrella framework agreement on the project and expects “further work orders” to be awarded “later in the year” on subsequent modules.

The contractor expects this first build to be completed “within 12 months”.

The group said: “We have a longstanding presence in Saudi Arabia and we are delighted to have been invited to participate in NEOM, a world-class construction project.

“Following the signing of the framework agreement, Keller is very well positioned to participate in the future geotechnical work, with the potential to generate contract revenues in the hundreds of millions [of] pounds in future years.”

In a trading update, also published this week, Keller revealed that it was “trading as anticipated” in the first half of the year, and expects to have a trading book of about £1.5bn “at the half year”.

Ahead of the announcement of its interim results for the half-year ending in June, the group said it was expecting growth, having achieved this by passing on “a significant portion of cost increases” to clients.

It said its involvement in the NEOM project, in addition to “a number of recent contract awards”, had added to an “encouraging” outlook.

Keller Group chief executive Michael Speakman said he was confident of delivering on expectations for the full year, with the group adding to its record order book.

He said: “Our involvement in the prestigious NEOM project, together with a number of recent infrastructure and liquefied natural gas (LNG) contract wins, evidences the diversity and inherent resilience of the group across the macroeconomic cycle.

“The underlying strength of the group’s performance provides confidence in our longer-term prospects, and is reflected in the board’s decision to recommence the progressive dividend policy with a 5 per cent increase in the interim dividend for the first half of 2022.”

Speakman said in March that the group was still looking to expand its UK business, but the aim for the year remained a “watching brief”.

In August, he told Construction News that acquisitions in the UK were a focus for 2022.

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