Interim Results

Keller Group PLC
24 August 2000

                        Keller Group - Interim Results                        

             KELLER ANNOUNCES INTERIM OPERATING PROFITS OF £6.5M              

Keller Group plc, ('Keller' / 'Group'), the global construction services
group, announces interim results for the half-year ended 30 June 2000.

Highlights:
                                                                             
* Operating profits maintained at £6.5m (1999: £6.5m) 
* Earnings per share up 4% to 7.2p (1999: 6.9p)
* Interim dividend up 10% to 2.85p (1999: 2.6p)
* Excellent performance in Continental Europe & Overseas
* UK margins less than expected; solid recovery anticipated in second half
* Positive contribution from Allied Mechanical Services, acquired in March
  2000
* Good US result nearly matching last year's exceptional performance
* Two recent US acquisitions will contribute to Group profits by the year-end
* Strong balance sheet with low gearing.

Keller Chairman, Dr J.M. West commented:

'Strong organic growth in Continental Europe, outside Germany, plus another
good performance from our US operations, where margins were maintained,
produced a good result for Keller in the first half of 2000.

'The Group has maintained its progressive dividend policy with the directors
declaring an interim dividend of 2.85p per share representing an increase of
10% over last year.  With earnings per share increasing to 7.2p, dividend
cover is a healthy 2.5 times.

'The Group order book is  in line with that at the same time last year.  Our
strong performance in Continental Europe, allied with an increase in activity
in the US and an improving performance in the UK, suggests that prospects for
the full year remain satisfactory.'


For more information:
Tom Dobson, Chief Executive            Keller Group       020 8341 6424
Justin Atkinson, Finance Director      Keller Group       020 8341 6424

Stephanie Highett/Nick Lambert        GCI Financial       020 7398 0800


Chairman's Statement

Financial Results
Keller Group produced a good result in the six months to 30 June 2000 with
operating profit maintained at £6.5m (1999: £6.5m), on sales of £147.1m (1999:
£151.2m). These results were achieved through strong organic growth in
Continental Europe, outside Germany, plus another good performance from our US
operations, where margins were maintained. The results do, however, also
reflect a downturn during this period in some of our markets, notably
Australia, and emphasise the exceptionally strong first half in our US
operations in 1999.  There is a marginal adverse effect from currency
movements in the results with the strength of the US Dollar largely offsetting
the weakness of the Euro.

The Group has maintained its progressive dividend policy with the directors
declaring an interim dividend of 2.85p per share (1999: 2.6p), representing an
increase of 10% over last year. This will be paid on 31 October 2000 to
shareholders on the register at close of business on 6 October 2000.  With
earnings per share increasing to 7.2p (1999: 6.9p), dividend cover is a
healthy 2.5 times.  Even after allowing for the effects of the acquisition of
two businesses in the period, gearing at 30 June 2000 was low at 11% (1999:
3%).  Gearing increased to 19% following the acquisition of TCDI in July 2000.

Market Leadership
Keller continues to develop a market leading position in a growing number of
Continental European markets.  During the first half, this was enhanced by a
strong performance from our operations in France, supplemented by the
successful entry into the Italian market, and also by the winning of further
work in Spain which will be completed in the second half of the year.  This
growth, along with progress in Poland, confirms our commitment to ensuring
that we maintain our position as the major foundation services group in
Continental Europe.  Our strong presence in the UK refurbishment market was
enhanced by the acquisition in March of Allied Mechanical Services (AMS),
which provides mechanical and electrical services in the Southeast of England
and which will complement the work of Makers in this growing market segment. 
In the US, our very strong national coverage was further enhanced when we
announced the purchase of two regional businesses, Foundation Services in
North Carolina, completed in June, and TCDI in Chicago, completed in July.
These acquisitions are in line with our strategy of buying local businesses
that either widen our geographical presence, thereby bringing us closer to our
clients, or offer complementary services to our existing operations.

The Americas
The results for North America in the period were again good but, owing to the
exceptionally strong performance in the first half of 1999, our results in the
US for 2000 have shown a marginal decline with the majority of the shortfall
arising in Hayward Baker.  While the overall market remains strong, the level
of competitive pressure has increased, particularly on large jobs, and it was
this sector that gave rise to the shortfall. Hayward Baker nevertheless
successfully completed a $6m project at Mount Storm in West Virginia and other
major projects include ground improvement for a major retail facility in
California and the commencement of a similar project for the new Orlando
Convention Centre in Florida.  Volumes in Case Foundation were generally in
line with last year and resulted in a good performance with significant
contracts completed in Chicago, Newark Airport, New Jersey and Long Park Dam
in Utah. Case Atlantic continues to benefit from opportunities arising from
the TEA 21 programme which provides funds for the upgrading of infrastructure.

Continental Europe and Overseas
The performance of our Continental Europe and Overseas Division was very good,
particularly given the widely acknowledged difficulties being experienced
industry-wide in the German domestic market.  Although our operations have
felt the impact of these conditions, it is pleasing to report that we still
managed to outperform the competition. Outside Germany, excellent results were
produced in Austria, France and Italy while good progress was made in
establishing our businesses in Poland and Spain. Our French company, through
its network of six regional offices, completed a large number of small to
medium sized contracts within France and in addition is undertaking the
prestigious piling contract for Expo 2002 in Switzerland.  In Italy, we
completed a major ground improvement contract for a new papermill near Turin
whilst, in Germany, emergency work relating to mining sinkholes at Bochum and
a fast track Soilcrete project for a microchip plant in Dresden produced
substantial volumes of work. Key projects undertaken by our Overseas Division
in the six months include a large stone column contract for a processing plant
in the Philippines and piling works for a major gas terminal in Port Said,
Egypt.

United Kingdom
As announced in last year's annual report, we have taken steps to reposition
our UK ground engineering and foundation business into areas of activity that
offer higher margins.  This reorganisation has produced the desired result
with this business producing profit in the first half. The business is now
well placed to participate in the work arising out of the government's
recently announced plans on infrastructure spending. Notable projects
performed in the period include a return visit to Caister for a further jet
grouting contract and a variety of medium sized ground improvement contracts
in Scotland.  In piling, we achieved a significant improvement in our margins
for work at Canary Wharf and also in our driven pile contracts at Belvedere
and Greenhithe.  In the concrete repair and refurbishment sector, sales
continued to grow and although margins in the first half were less than
expected, overall market conditions remain favourable and we anticipate a
solid recovery in margins during the second half.   Makers continue to work at
both Heathrow and Gatwick airports under the term contract with BAA while, in
the London Borough of Waltham Forest, we have been awarded the contract for
the refurbishment of two tower blocks.  AMS, acquired at the end of March, has
traded well in its three months within the Group and, following its
integration, will enhance our capability in the growing refurbishment market. 

Australia
The completion of the construction programme in the build-up to the Olympic
Games, coupled with the introduction of a new sales tax and interest rate
rises, has led to a slowdown across the sector, as construction projects
across Australia have been put on hold.  As a result, our Franki operations
showed a substantial reduction in volumes but nonetheless achieved a
break-even profit performance.  Costs have been cut and the business will now
be better placed to participate in the market up-turn that is expected after
the Olympic Games.

Prospects and Strategy
The Group order book is in line with that at the same time last year.  Our
strong performance in Continental Europe, allied with an anticipated increase
in activity in the US and an improving performance in the UK, suggests that
prospects for the full year remain satisfactory. In the year to date Keller
has completed three bolt-on acquisitions in line with our stated strategy and,
in addition to the pursuance of further such acquisitions, Keller continues to
seek opportunities to enhance the growth potential of the Group.




Consolidated profit and loss account
for the half year ended 30 June 2000 


                                 Continuing
                    Continuing   operations  Half year  Half year     Year to
                    operations acquisitions to 30 June to 30 June 31 December
                          2000         2000       2000       1999        1999
                Note     £'000        £'000      £'000      £'000       £'000
 
Turnover from 
continuing 
operations         3   145,285        1,817    147,102    151,150     314,899
Operating costs       (139,023)      (1,611)  (140,634)  (144,607)   (295,513)
Operating profit 
from continuing 
operations         3     6,262          206      6,468      6,543      19,386
Net interest payable                              (194)      (192)       (345)
Profit on ordinary 
activities before taxation                       6,274      6,351      19,041
Taxation           4                            (2,294)    (2,347)     (6,749)
Profit on ordinary 
activities after taxation                        3,980      4,004      12,292
Equity minority interests                           80        (68)       (112)
Profit for the period                            4,060      3,936      12,180
Dividends proposed  5                           (1,619)    (1,476)     (4,428)
Retained profit for the period                   2,441      2,460       7,752
Earnings per share  6                              7.2p       6.9p       21.5p
Diluted earnings 
per share           6                              7.1p       6.9p       21.4p
Dividend per share  5                             2.85p       2.6p        7.8p



Consolidated statement of total recognised gains and losses
for the half year ended 30 June 2000


                                 Half year to  Half year to           Year to
                                 30 June 2000  30 June 1999  31 December 1999
                                        £'000         £'000             £'000

Profit for the period                   4,060         3,936            12,180
Currency translation differences 
on overseas investments                 1,781          (153)           (1,039)
Tax effect of currency translation 
differences                               (46)            -               113
Total recognised gains and losses       5,795         3,783            11,254



Consolidated balance sheet
as at 30 June 2000

                                       As at         As at             As at
                                30 June 2000  30 June 1999  31 December 1999
                                       £'000         £'000             £'000

Fixed assets
Positive goodwill                      7,804         1,554             1,613
Negative goodwill                       (262)         (367)             (314)
                                       7,542         1,187             1,299
Other intangible assets                  295           300               305
Intangible assets                      7,837         1,487             1,604
Tangible assets                       48,553        43,913            43,688
Investments                                -           239                 -
                                      56,390        45,639            45,292
Current assets
Stocks                                 6,312         5,800             6,149
Debtors                               83,211        77,909            73,400
Cash at bank and in hand              15,065        14,113            16,965
                                     104,588        97,822            96,514
Creditors: amounts falling due 
within one year                      (77,871)      (77,110)          (72,668)
Net current assets                    26,717        20,712            23,846
Total assets less current 
liabilities                           83,107        66,351            69,138
Creditors: amounts falling due 
after more than one year             (20,997)      (13,169)          (11,451)
Provisions for liabilities 
and charges                           (6,233)       (5,750)           (5,744)
Net assets                            55,877        47,432            51,943

Capital and reserves
Called up share capital                5,681         5,676             5,677
Share premium account                 14,545        14,499            14,508
Capital redemption reserve             7,629         7,629             7,629
Profit and loss account               27,406        18,711            23,230
Equity shareholders' funds            55,261        46,515            51,044
Equity minority interests                616           917               899
                                      55,877        47,432            51,943



Consolidated cash flow statement
for the half year ended 30 June 2000



                                Half year to  Half year to           Year to
                                30 June 2000  30 June 1999  31 December 1999 
                                       £'000         £'000             £'000

Net cash inflow from 
operating activities                   7,079        11,005            27,402
Returns on investment and 
servicing of finance                    (475)         (352)             (723)
Taxation                              (2,101)       (2,845)           (7,152)
Capital expenditure                   (5,155)       (4,600)           (8,278)
Acquisition and disposals             (3,108)         (904)             (725)
Equity dividends paid                 (2,954)       (2,691)           (4,166)
Net cash (outflow)/inflow 
before use of liquid resources 
and financing                         (6,714)         (387)            6,358
Management of liquid resources         2,360         1,468               642
Financing                              4,534        (1,147)           (3,372)
Increase/(decrease) in cash in 
the period                               180           (66)            3,628

Exchange differences on cash balances    170             9              (579)
(Decrease) in short term deposits     (2,390)       (1,514)             (642)
(Increase)/decrease in bank loans     (5,412)          745             3,315
(Increase) in loan notes              (3,919)         (267)             (149)
Decrease in finance leases                45           152               339  
(Increase)/decrease in net 
(debt)/funds                         (11,326)         (941)            5,912
Opening net funds/(debt)               5,264          (648)             (648)
Closing net (debt)/funds              (6,062)       (1,589)            5,264

Analysis of closing net (debt)/funds
Cash in hand                          11,383         8,689            10,893
Bank overdrafts                         (384)       (1,668)             (244)
Net cash                              10,999         7,021            10,649
Short term bank deposits               3,682         5,424             6,072
Bank loans                           (11,831)       (8,180)           (6,419)
Loan notes                            (7,115)       (3,314)           (3,196)
Finance leases                        (1,797)       (2,540)           (1,842)
Closing net (debt)/funds              (6,062)       (1,589)            5,264



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 2000 and has been prepared following the accounting
policies set out in the Group's 1999 Annual Report and Accounts. The figures
for the year to 31 December 1999 have been extracted from the 1999 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 2000  30 June 1999  31 December 1999

Euro:             average for period      1.63          1.49              1.52
                          period end      1.58          1.54              1.61
US Dollar:        average for period      1.57          1.62              1.62
                          period end      1.51          1.58              1.61
Australian Dollar:average for period      2.57          2.51              2.51
                          period end      2.52          2.35              2.46


3.  Geographical analysis
Turnover and operating profit may be analysed as follows:

                                 Continuing
                    Continuing   operations  Half year  Half year     Year to
                    operations acquisitions to 30 June to 30 June 31 December
                          2000         2000       2000       1999        1999
                         £'000        £'000      £'000      £'000       £'000

Turnover from 
continuing operations
United Kingdom          43,612        1,817     45,429     42,472      82,301
The Americas            47,512            -     47,512     51,851     107,410
Continental Europe 
and overseas            47,163            -     47,163     47,698     104,382
Australia                6,998            -      6,998      9,129      20,806
                       145,285        1,817    147,102    151,150     314,899

Operating profit from 
continuing operations
United Kingdom           1,113          206     1,319       1,523      2,934
The Americas             3,150            -     3,150       3,477     12,042
Continental Europe 
and overseas             2,709            -     2,709       1,838      5,503
Australia                   16            -        16         359        705
Unallocated central costs (726)           -      (726)       (654)    (1,798)
                         6,262          206     6,468       6,543     19,386


4.  Taxation
Taxation based on the profit on ordinary activities is:

                                Half year to   Half year to           Year to
                                30 June 2000   30 June 1999  31 December 1999
                                       £'000          £'000             £'000
UK corporation tax at 30% 
(1999:30.25%)                            283            462               584
Overseas tax                           1,691          1,766             6,190
Deferred tax                             224            159               231
Under/(over) provisions in 
respect of prior periods                  96            (40)             (256)
                                       2,294          2,347             6,749

5.  Dividends proposed
Ordinary dividends on equity shares    1,619          1,476             4,428


The interim ordinary dividend of 2.85p per share (1999: 2.6p) will be paid on
31 October 2000 to shareholders on the register at close of business on 6
October 2000.


6.  Earnings per share
Earnings per share is calculated as follows:
                                          2000                   1999
                                    Basic    Diluted        Basic     Diluted
Profit after tax and 
minority interests             £4,060,000  £4,060,000  £3,936,000  £3,936,000

                                     No of shares           No of shares
Weighted average of ordinary 
shares in issue                56,561,720  56,561,720  56,662,569  56,662,569
Weighted average of ordinary 
shares under option                     -     196,873           -     337,431
Weighted average of own shares held     -     236,407           -           -
Number of shares assumed issued 
(at fair value)                         -     (86,631)          -    (122,833)
Adjusted weighted average of 
ordinary shares in issue       56,561,720  56,908,369  56,662,569  56,877,167

Earnings per share                    7.2p        7.1p        6.9p        6.9p


7.  Reconciliation of movement in shareholders' funds

                                       As at         As at             As at
                                30 June 2000  30 June 1999  31 December 1999
                                       £'000         £'000             £'000

Profit for the period                  4,060         3,936            12,180
Dividends                             (1,619)       (1,476)           (4,428)
Exchange differences net 
of taxation                            1,735          (153)             (926)
Issue of new shares*                      41           123               133
Net addition to shareholders' funds    4,217         2,430             6,959
Shareholders' funds at start 
of period                             51,044        44,085            44,085
Shareholders' funds at end 
of period                             55,261        46,515            51,044
* Shares include share premium



8.  Purchase of subsidiary undertakings and businesses
On 16 March 2000 the Group acquired 100% of the ordinary share capital of
Allied Mechanical Services Limited for a total maximum consideration,
including expenses, of £5,277,000, of which £967,000 was paid in cash,
£100,000 in 5% cumulative redeemable preference shares in an intermediate
holding company, £2,700,000 in loan notes with deferred purchase consideration
of up to £1,400,000 to be paid in the form of loan notes.  The fair value of
the assets acquired was £123,000, giving rise to goodwill of £5,154,000.

On 5 June 2000 the Group acquired substantially all of the assets of US based,
Foundation Services Inc., for a cash consideration of £2,381,000.  The
goodwill arising on this transaction amounted to £772,000.