Interim Results

KELLER GROUP PLC
24 August 1999

                               
              Keller Group - Interim Results
    
                      20% INCREASE IN PBT
        POSITIVE CONTRIBUTIONS FROM RECENT ACQUISITIONS
    
    
 Keller Group plc, the global ground engineering services company, 
 announces interim results for the half-year ended 30 June 1999.
    
 Highlights:
    
 - Pre-tax profits up 20% to £6.4m (1998: £5.3m) on turnover up 21% to 
   £151m (1998: £125m)
 - Earnings per share up 17% to 6.9p (1998: 5.9p)
 - Interim dividend up 11% to 2.6p (1998: 2.35p)
 - Gearing remains low at 3%
    
 - Very positive contribution from the three acquisitions made in 1998 
   (Franki, Genco and Denver Grouting)
 - Continued good performance from North America
 - Excellent results from Continental Europe and Overseas
 - Spanish and Italian markets offer good long-term prospects
 - Good result in the UK, which continues to benefit from major 
   refurbishment schemes - Makers in £1.3m repair contract on 
   Hammersmith Bridge
    
 Keller Chief Executive Tom Dobson commented:
    
 'I  am  very pleased to be able to report another  set  of
  excellent results for Keller. We continue to perform  well
  in  the United States, and the recovering European markets
  offer  opportunities  for  growth.  We  continue  to  seek
  complementary acquisitions to enhance our global  coverage
  and gain entry to new market sectors.'
    
  For more information:
  Tom Dobson, Chief Executive        Keller Group          0171 475 8602
  Rob Painting, Finance Director     Keller Group Tuesday  0171 475 8602
                                               Thereafter  0181 341 6424
  Belinda Keheyan                    GCI Focus             0171 600 1392
  Alastair Hetherington              GCI Focus             0171 475 8602


Chairman's statement

                       Financial results
Keller Group maintained its impressive record of growth in the
six  months  to 30 June 1999 with profit before tax increasing
20%  to  £6.4m  (1998: £5.3m) on turnover up from  £125.1m  to
£151.2m.  Earnings per share increased by 17% to  6.9p  (1998:
5.9p)  and  gearing remained low at 3%. These results  reflect
strong  organic  growth  in Continental  Europe  plus  a  full
contribution  from  the  businesses  acquired  last  year   in
America, Australia and Egypt. The Group's progressive dividend
policy  is  maintained  and  the directors  have  declared  an
interim  dividend  of  2.6p  per  share  (1998:  2.35p)  which
represents  an  increase of 11% over last  year.  The  interim
dividend  will  be paid on 29 October 1999 to shareholders  on
the register at close of business on 17 September 1999.

                       Market leadership
Keller  continued  to  develop  its  presence  in  Continental
Europe,  where  market leadership in Germany and  Austria  has
been  complemented  by  good progress in  France  and  Eastern
Europe.  In  addition, the Italian and Spanish  markets  offer
good  long  term opportunities for the Group. The acquisitions
of  Franki, Genco and Denver Grouting made last year have been
integrated successfully and we continue to seek businesses  to
strengthen  our leading position particularly  in  Europe  and
North  America. In the UK, Makers has made excellent  progress
in   establishing   itself  as  a  leader  in   the   building
refurbishment  and  concrete repair market,  and  this  sector
offers considerable opportunities for growth.

                         The Americas
Results  from  the  Group's  North  American  operations  were
slightly  ahead of the excellent first half achieved  in  1998
and were underpinned by a particularly strong performance from
Case  in the buoyant building and infrastructure sector. Major
projects   in  Boston  and  Chicago,  combined  with   several
substantial  contracts in Florida and Georgia, supported  this
result.  Hayward  Baker also performed well  with  significant
projects  in  New  York, New Jersey and  Los  Angeles.  Denver
Grouting,  acquired  late in 1998, has  been  integrated  into
Hayward Baker and is progressing well.

                Continental Europe and Overseas
Excellent results were achieved by the Continental Europe  and
Overseas division with good progress being made in France  and
Poland  while in Germany margins improved on sales  maintained
from  last  year.  We  continue to be successful  in  overseas
markets with good results in the Middle East and Egypt,  where
Genco,  acquired in the second half of 1998, made  a  valuable
contribution.   Key  projects  included   very   deep   ground
stabilisation  work  at  Lausitz,  Germany,  where   extensive
opencast   coal   workings  had  caused  major   environmental
degradation. Other important geotechnical work was carried out
for   the   European  high  speed  rail  network  in  Germany,
Switzerland   and   Spain,  which  will  continue   to   offer
opportunities for further work in the years to come.

                        United Kingdom
Good  results  were  achieved in the  UK,  where  Makers  made
excellent progress in the building refurbishment and  concrete
repair  markets with sales well ahead of the same period  last
year.  Significant  projects  undertaken  by  Makers  included
refurbishment  of  tower  blocks  in  London,  car  parks   in
Wolverhampton  and  renovation work at New Street  Station  in
Birmingham. The ground engineering and foundation  markets  in
the  UK remain very competitive and margins have suffered  due
particularly to a lack of substantial infrastructure projects.
The  period saw the construction of pile foundations  for  the
new  headquarters of HSBC at Canary Wharf and further work for
London Underground on upgrading of infrastructure.

                           Australia
Franki, acquired in May 1998, made a full contribution in  the
half year with sales and operating profit in line with budget.
Key  projects included piling work at Central Station,  Sydney
and for a medical centre in Southport, Queensland.

                     Changes to the board
As  previously  announced, Dr Kevin Bond, chief  executive  of
Yorkshire Water plc and Mr Keith Payne, currently chairman  of
Multi Equipment Rental plc and formerly executive director for
Finance, Planning & Development at BET plc, were appointed  to
the  board as non-executive directors with effect from 1  July
1999. Sir Thomas Macpherson resigned from the board at the end
of  July  following nine years with the Company, initially  as
non-executive  chairman following the management  buy-out  and
flotation,   and,  more  recently,  as  non-executive   deputy
chairman.  Sir Thomas has made an outstanding contribution  to
the  successful development of Keller Group and  we  wish  him
well in the future.

                           Year 2000
The  Group has identified the key business risks posed by  the
Year  2000 problem. The programmes which have been established
throughout  the  Group  to achieve Year  2000  compliance  are
expected  to  be completed by the Autumn and have resulted  in
the   upgrading   of  computer  hardware  and   software   and
replacement  of relevant systems. No assurance  can  be  given
that these programmes will be successful. Additional costs  of
ensuring  that  systems  are Year  2000  compliant  have  been
calculated but are not considered to be material.

                           Prospects
The Group order book has continued at the high levels recorded
at  the  end  of  1998. Our strong position in  the  resurgent
Continental European markets, combined with market  leadership
in North America and our skills and experience in dealing with
brownfield sites across the world, all indicate that prospects
for the full year are good.

Dr J M West, Chairman
23 August 1999

Consolidated profit and loss account
for the half year ended 30 June 1999


                                   Half year to   Half year to       Year to
                                        30 June        30 June   31 December
                                           1999           1998          1998
                            Note          £'000          £'000         £'000
Turnover from continuing                                  
operations                    3         151,150        125,075       266,854
Operating costs                        (144,607)      (119,545)     (249,811)
Operating profit from                                         
continuing operations         3           6,543          5,530        17,043
Net interest payable                       (192)          (232)         (341)
Profit on ordinary activities 
before taxation                           6,351          5,298        16,702
Taxation                      4          (2,347)        (1,900)       (5,870)
Profit on ordinary activities 
after taxation                            4,004          3,398        10,832
Equity minority interests                   (68)           (99)         (354)
Profit for the period                     3,936          3,299        10,478
Dividends proposed            5          (1,476)        (1,330)       (4,021)
Retained profit for the                                       
period                                    2,460          1,969         6,457
Earnings per share            6             6.9p           5.9p         18.6p 
Diluted earnings per share    6             6.9p           5.8p         18.5p
Dividend per share            5             2.6p          2.35p          7.1p




Consolidated statement of total recognised gains and losses
for the half year ended 30 June 1999


                                   Half year to   Half year to       Year to
                                        30 June        30 June   31 December
                                           1999           1998          1998
                                          £'000          £'000         £'000
Profit for the period                     3,936          3,299        10,478
Currency translation differences                              
on overseas investments net of                                
taxation                                   (153)          (496)        1,231
Total recognised gains and losses         3,783          2,803        11,709



Consolidated balance sheet
As at 30 June 1999
                                         As at       As at          As at
                                       30 June     30 June    31 December
                                          1999        1998           1998
                                         £'000       £'000          £'000
Fixed assets                                                  
Positive goodwill                        1,554           -          1,594
Negative goodwill                         (367)       (471)          (419)
                                         1,187        (471)         1,175     
             
Other intangible assets                    300           -            331
Intangible assets                        1,487        (471)         1,506
Tangible assets                         43,913      39,460         42,839
Investments                                239           -              -
                                        45,639      38,989         44,345
Current assets                                                
Stocks                                   5,800       5,835          5,929
Debtors                                 77,909      74,422         67,298
Cash at bank and in hand                14,113      12,053         14,131
                                        97,822      92,310         87,358
Creditors: amounts falling due                                
within one year                        (77,110)    (74,137)       (66,971)
Net current assets                      20,712      18,173         20,387
Total assets less current                                     
liabilities                             66,351      57,162         64,732
Creditors: amounts falling due                                
after more than one year               (13,169)    (12,654)       (13,740)
Provision for liabilities and                                 
charges                                 (5,750)     (6,133)        (5,958)
Net assets                              47,432      38,375         45,034
                                                              
Capital and reserves                                          
Called up share capital                  5,676       5,661          5,664
Share premium account                   14,499      14,357         14,388
Capital redemption reserve               7,629       7,629          7,629
Profit and loss account                 18,711      10,189         16,404
Equity shareholders' funds              46,515      37,836         44,085
Equity minority interests                  917         539            949
                                        47,432      38,375         45,034


Consolidated cash flow statement
For the half year ended 30 June 1999

                                 Half year to    Half year to      Year to
                                      30 June         30 June  31 December 
                                         1999            1998         1998
                                        £'000           £'000        £'000
Net cash inflow from operating                                
activities                             11,005           5,262       22,676
Returns on investment and                                     
servicing of finance                     (352)           (133)        (234)
Taxation                               (2,845)         (2,475)      (5,246)
Capital expenditure                    (4,600)         (2,227)      (5,562)
Acquisition and disposals                (904)         (3,311)      (6,158)
Equity dividends paid                  (2,691)         (2,436)      (3,767)
Net cash (outflow)/inflow before                              
use of liquid resources and         
financing                                (387)         (5,320)       1,709
Management of liquid resources          1,468          (1,976)      (1,428)
Financing                              (1,147)          4,326        4,068
(Decrease)/increase in cash in                                
the period                                (66)         (2,970)       4,349
                                                              
Exchange differences on cash                                  
balances                                    9            (152)         186
(Decrease)/increase in short                                  
term deposits                          (1,514)          1,979        1,603
Decrease/(increase) in bank                                   
loans                                     745          (3,634)      (3,744)
(Increase)/decrease in loan                                   
notes                                    (267)            502          756
Decrease/(increase) in finance                                
leases                                    152            (739)      (1,829)
(Increase)/decrease in net debt          (941)         (5,014)       1,321
Opening net debt                         (648)         (1,969)      (1,969)
Closing net debt                       (1,589)         (6,983)        (648)
                                                              
Analysis of closing net debt
Cash in hand                            8,689           4,739        7,193
Bank overdrafts                        (1,668)         (5,318)        (115)
Net cash                                7,021            (579)       7,078
Short term bank deposits                5,424           7,314        6,938
Bank loans                             (8,180)         (8,815)      (8,925)
Loan notes                             (3,314)         (3,301)      (3,047)
Finance leases                         (2,540)         (1,602)      (2,692)
Closing net debt                       (1,589)         (6,983)        (648)


Notes to the interim report:

1.   Basis of preparation

This interim report, which is unaudited, was approved by the board of
directors on 23 August 1999 and has been prepared following the
accounting policies set out in the Group's 1998 Annual Report and
Accounts. The figures for the year to 31 December 1998 have been
extracted from the 1998 Annual Report and Accounts which received
an unqualified auditors' report and which has been filed with the
Registrar of Companies.

2.   Exchange rates
The exchange rates used in respect of principal currencies are


                                    Half year to  Half year to      Year to
                                         30 June       30 June  31 December
                                            1999          1998         1998
Euro:            average for period         1.49          1.52         1.49
                 Period end                 1.54          1.54         1.42
US Dollar:       average for period         1.62          1.65         1.66
                 Period end                 1.58          1.66         1.66
Australian Dollar: average for                                
                 period                     2.51          2.66         2.71
                 Period end                 2.35          2.75         2.71
                                                              
                                                              
3.  Geographical analysis                                     
Turnover and operating profit                                 
may be analysed as follows:
                                 Half year to  Half year to        Year to
                                      30 June       30 June    31 December
                                         1999          1998           1998
                                        £'000         £'000          £'000
Turnover from continuing                                      
operations
United Kingdom                         42,472        34,284         67,674
North America                          51,851        47,456         98,563
Continental Europe and overseas        47,698        39,966         88,361
Australia                               9,129         3,369         12,256
                                      151,150       125,075        266,854
Operating profit from continuing                              
operations
United Kingdom                          1,523         1,407          3,492
North America                           3,477         3,290          9,716
Continental Europe and overseas         1,838         1,064          4,056
Australia                                 359           214            896
Unallocated central costs                (654)         (445)        (1,117)
                                        6,543         5,530         17,043
                                                              
                                                              
4.  Taxation                                                  
Taxation based on the profit on                               
ordinary activities is:
                                   Half year to  Half year to      Year to
                                        30 June       30 June  31 December
                                           1999          1998         1998
                                          £'000         £'000        £'000
UK corporation tax at 30.25%                                  
(1998:31%)                                  462           449        1,026
Overseas tax                              1,766         1,422        5,179
Deferred tax                                159            18         (675)
(Over)/under provisions in                                    
respect of prior periods                    (40)           11          340
                                          2,347         1,900        5,870
                                                              
                                                              
5.  Dividends proposed                                        
Ordinary dividends on equity shares       1,476         1,330        4,021


The interim ordinary dividend of 2.6p per share (1998: 2.35p) will be
paid on 29 October 1999 to shareholders on the register at close of
business on 17 September 1999.


6.  Earnings per share
The basic earnings per share of 6.9p (1998: 5.9p) is calculated on the
Group profit for the period after taxation and minority interests of
£3,936,000 (1998: £3,299,000) and a weighted average of 56,662,569
(1998: 56,076,737) ordinary shares in issue during the period.

The diluted earnings per share of 6.9p (1998: 5.8p) is calculated on
the Group profit for the period after taxation and minority interests
of £3,936,000 (1998: £3,299,000) and a weighted average of 56,877,167
(1998: 56,578,645) ordinary shares.  This weighted average is
calculated by taking the weighted average number of shares used in the
calculation of basic earnings per share and adding to it 337,431 (1998:
923,263) shares being the weighted average of shares under option in
the period and subtracting from it 122,833 (1998: 421,355) shares being
the number of shares assumed to have been issued at fair value during
the period.

7.  Reconciliation of movement                                
in shareholders' funds
                                       As at       As at         As at        
                                     30 June     30 June   31 December
                                        1999        1998          1998  
                                       £'000       £'000         £'000
Profit for the period                  3,936       3,299        10,478
Dividends                             (1,476)     (1,330)       (4,021)
Exchange differences net of                                   
taxation                                (153)       (496)        1,231
Issue of new shares*                     123         624           658
Net addition to shareholders'                                 
funds                                  2,430       2,097         8,346
Shareholders' funds at start of                               
period                                44,085      35,739        35,739
Shareholders' funds at end of                                 
period                                46,515      37,836        44,085
* Shares include share premium