In accordance with Listing Rule 9.6.1, copies of the following
documents have been submitted to the National Storage
Mechanism:
These documents will shortly be available for inspection at the
National Storage Mechanism at www.hemscott.com/nsm.do.
The Annual Report 2015 is also available on the Company’s
website at www.keller.co.uk. Hard copies of all the documents have
been sent to shareholders.
In accordance with DTR 6.3.5, this announcement contains
information in the attached Appendix of the principal risk factors,
the directors’ responsibility statement and a note to the accounts
on related party transactions. This information has
been extracted in full unedited text from the Annual Report
2015. References to page numbers and notes in the Appendix
refer to those in the Annual Report 2015. A condensed set of
financial statements was appended to Keller Group plc's preliminary
results announcement issued on 29 February
2016.
Risk |
Risk Description |
Potential Impact |
Mitigation |
Market risk
A rapid downturn in our markets |
Inability to maintain a sustainable level of financial performance
throughout the construction industry market cycle which grows more
than many other industries during periods of economic expansion and
falls harder than many other industries when the economy
contracts. |
Failure to continue in operation or to meet our liabilities. |
Diversification of our markets, both in terms of geography and
market segment.
Strong balance sheet.
Leveraging the global scale of our Group.
Having strong local businesses to address geographic markets. |
Strategic
risks
Failure to procure new contracts |
A failure to continue to win and retain contracts on satisfactory
terms and conditions in our existing and new target markets if
competition increases, customer requirements change or demand
reduces due to general adverse economic conditions. |
Failure to achieve targets for revenue, profit and earnings. |
Continually analysing our existing and target markets to ensure we
understand the opportunities that they offer.
Structured bid review processes in operation throughout the Group
with well-defined selectivity criteria that are designed to ensure
we take on contracts only where we understand and can manage the
risks involved. |
Losing our market share |
Inability to achieve sustainable
growth, whether through acquisition, new products, new geographies
or industry specific solutions. |
Failure to achieve targets for
revenue, profits and earnings. |
Continually seeking to
differentiate our offering through service quality, value for money
and innovation.
A Business Development function focusing on our customers’
requirements and understanding our competitors.
Minimising the risk of acquisitions, including getting to know a
target company in advance, often working in joint venture, to
understand the operational and cultural differences and potential
synergies, as well as undertaking these through thorough due
diligence and structured and carefully managed integration
plans.
Implementing annual efficiency and improvement programmes to help
us remain competitive. |
Non-compliance with our Code of
Business Conduct |
Not maintaining high standards of
ethics and compliance in conducting our business or failing to meet
legal or regulatory requirements. |
Losing the trust of our
customers, suppliers and other stakeholders with consequent adverse
effects on our ability to deliver against our strategy and business
objectives.
Substantial damage to Keller’s brand and/or large financial
penalties. |
Having clear policies
and procedures in respect of ethics, integrity, regulatory
requirements and contract management.
Maintaining training programmes to ensure our people fully
understand these policies and requirements.
Operating and encouraging the use of a ‘whistleblowing’
facility. |
Financial
risk
Inability to finance our business |
Losing access to the financing facilities necessary to fund the
business. |
Breach of banking covenants or failure to continue in business or
meet our liabilities. |
Procedures to monitor the effective management of cash and debt,
including weekly cash reports and regular cash forecasting. |
Operational
risks
Product and/or solution failure |
Failure of our product and/or solution to achieve the required
standard. |
Financial loss and consequent damage to our brand reputation. |
Continuing to enhance our technological and operational
capabilities through investment in our product teams, project
managers and our engineering capabilities. |
Ineffective management of our
contracts |
Failure to manage our contracts to
ensure that they are delivered on time and to budget. |
Failure to achieve the margins,
profits and cash flows we expect from contracts. |
Ensuring we understand
all of our risks through the bid appraisal process and applying
rigorous policies and processes to manage and monitor contract
performance.
Ensuring we have high-quality people delivering projects. |
Causing a serious injury or fatality
to an employee or member of the public |
Failure to maintain high standards
of Safety and Quality. |
Damage to employee morale leading to
an increase in employee turnover rates, loss of customer, supplier
and partner confidence and damage to our brand reputation in an
area that we regard as a top priority. |
A Board-led commitment
to achieve zero accidents.
Visible management commitment with Safety Tours, Safety Audits and
Safety Action Groups.
Implementing management systems that conform to Occupational Health
& Safety Assessment System 18001.
Extensive mandatory employee training programmes. |
Not having the right skills to
deliver |
Inability to attract and develop
excellent people to create a high-quality, vibrant, diverse and
flexible workforce. |
Failure to maintain
satisfactory performance in respect of our current
contracts and failure to deliver our strategy and business targets
for growth. |
Continuing to develop and implement
leadership, personal development and employee engagement programmes
that encourage and support all our people to achieve their full
potential. |
Responsibility statement of the
Directors in respect of the annual report and the financial
statements
-
the financial statements, prepared in accordance with the
applicable set
of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation as a
whole; and
-
the Directors’ report, including content contained by reference,
includes a fair review of the development and performance of the
business and the position and performance of the Company and the
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
The Board confirms that the Annual Report and Accounts, taken as
a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the performance,
strategy and business model of the Company.
25 Related party transactions
Transactions between the parent, its subsidiaries and joint
operations, which are related parties, have been eliminated on
consolidation.
The remuneration of the Directors, who are the key management
personnel and related parties of the Group, is set out in note 6
(extract below).