Chairman's statement

Our foundations businesses are consolidating their leading market positions, as their reputation for innovative solutions continues to grow and they expand their geographical coverage and market share. I am pleased to report a record set of results for 2001: Group sales at £422.2m were up 35% (2000: £313.0m), with profit before tax and goodwill amortisation up 49% to £23.6m (2000: £15.8m). Earnings per share before goodwill amortisation increased to 25.8p (2000: 17.9p), representing growth of 44%. This decisive recovery underlines the Group’s strong business fundamentals and is further evidence of the success of our growth strategy, outlined in my statement in last year’s Annual Report. The acquisition during the year of Suncoast represented a step change for the Group, increasing a full year contribution of our specialist services businesses from 15% of sales in 2000 to some 30%. We believe that, in the medium term, the balance of the Group will be optimised by further increasing the contribution of this sector of our business. We shall continue to look for acquisitions of niche businesses, principally in Europe, which provide value-added services to the construction industry. Our foundations businesses are consolidating their leading market positions, as their reputation for innovative solutions continues to grow and they expand their geographical coverage and market share. We shall support their ongoing development through investment in skills, plant and technology and, within the Group, will continue to facilitate co-operation, the exchange of ideas and the promotion of best practice. In light of this strong performance, the board is recommending an increased final dividend of 6.05p per share, bringing the total dividend for the year to 9.2p (2000: 8.5p). In reviewing the performance of the Group in 2001, I am struck by the resilience and resourcefulness of all parts of our business. Our North American operations have had an exceptional year, taking full advantage of a strong market. In the UK, the Makers business has made good progress in developing partnerships with both public and private sector clients, which will bear fruit in the future. We have seen a very good performance from Continental Europe and overseas, with particularly strong organic growth in France and the Far East. The Franki operations in Australia and Indonesia have shown an impressive turnaround, and look set to steer a steady course in 2002.

At the end of last year, we announced the retirement from the board of Mike Martin. Mike’s wise counsel and management experience will be missed and the board wishes him well in his retirement. In December, we welcomed Gerry Brown to the board as a non-executive director, followed by the appointment of Richard Scholes as a non-executive director in February of this year. With these new non-executive appointments secured, Dr Harald Peipers and Dr Kevin Bond have decided to stand down as non-executive directors at the forthcoming Annual General Meeting, having been with Keller since 1995 and 1999 respectively. We thank them both for their contributions to the development of the Group and wish them well for the future. Keller has experienced significant change during the past year: the integration of a major new business, changes in the structure of some of our marketplaces, general economic uncertainty and ever more stringent standards and regulations. Our people, on whom the performance of the Group rests, have once again responded extremely well to these challenges. I would like to thank them for their hard work in 2001. The board is committed to rewarding their loyalty with excellent training and development opportunities, in an environment where they can fulfil their potential and really make a difference. In closing, I am pleased to be able to report that 2002 has started well for the Group, with a total order book at the start of the year some 27% ahead of the previous year, on a like for like basis. This encouraging start, together with the on-target performance of Suncoast since its acquisition last October, lead me to anticipate a good performance for the group in 2002. Dr J M West Chairman 6 March 2002