Final Results

Keller Group PLC
07 March 2003


                                    Friday, 7 March 2003

                    Keller Group plc

 Preliminary Results for the year ended 31 December 2002

Keller  Group plc ('Keller' or 'the Group'),  the  global
construction  services group, is pleased to announce  its
preliminary results for the year ended 31 December  2002.
Highlights include:

> Sales break through £500m barrier
> Operating profit* up 35% to £34.3m; margins* up to
  6.7% (2001: 6.0%)
> Profit before tax* up 29% to £30.4m (2001: £23.6m)
> Earnings per share* increased 27% to 32.7p (2001:25.8p)
> Strong cash flow with EBITDA interest cover of 11 times
> Five acquisitions completed during the year
> 2003 prospects enhanced by recent acquisitions
> Recommended total dividend up 8% at 9.9p (2001: 9.2p)

* before goodwill amortisation of £3.1m

Commenting  on  the results, Tom Dobson, Keller's Chief
Executive said:

'These  excellent  results  demonstrate  our  ability  to
generate   sustained  organic  growth,  complemented   by
selective  value-creating acquisitions.  The  consistency
of  performance  across  the  Group,  with  significantly
improved  margins, reflects the strength of our  business
model  and  the  ability of our management  to  adapt  to
changing market conditions.'

'I  am pleased to be able to report that we go into  2003
with a total order book  representing four months' sales,
which gives a strong platform for the year ahead.'


Enquiries:
Keller Group plc                         www.keller.co.uk
Tom Dobson, Chief Executive     On the day: 020 7067 0700
Justin Atkinson, Chief Operating
Officer and Finance Director    Thereafter: 020 8341 6424


Weber Shandwick Square Mile                 020 7067 0700
Reg Hoare/ Josh Royston

A briefing for analysts will be held at 9.15 for 9.30am
on Friday, 7 March 2003 at the offices of Weber Shandwick
Square Mile, Fox Court, 14 Gray's Inn Road, London, WC1X 8WS.



Preliminary Announcement
Chairman's Statement


Results

I am pleased to report another outstanding set of results
for  the Group.  The 2002 financial year saw Group  sales
at £511.0m up 21% (2001: £422.2m), with profit before tax
and   goodwill  amortisation  up  29%  to  £30.4m  (2001:
£23.6m).   Of  the  profit  increase  roughly  half   was
generated  from organic growth and half from acquisitions
completed during 2001 and 2002. Earnings per share before
goodwill  amortisation increased by 27% to  32.7p  (2001:
25.8p).      These  excellent  results  demonstrate   our
ability    to   generate   sustained   organic    growth,
complemented by selective value-creating acquisitions.

The  consistency  of performance across the  Group,  with
significantly improved margins, reflects the strength  of
our  business model and the ability of our management  to
adapt to changing market conditions.

Within  Foundation Services, the US had  a  record  year,
whilst  Continental  Europe & Overseas  produced  another
excellent performance.   The UK and Australian foundation
businesses both returned results that were much  improved
on  the  previous  year.    Within  Specialist  Services,
Makers  started  to  see returns from its  investment  in
systems and processes, whilst Suncoast had a satisfactory
first full year of ownership by the Group.

Acquisitions

2002  was an active year for acquisitions reflecting good
opportunities which became available to us and which were
consistent  with  our  strategy.  In  December  2002,  in
Foundation  Services we acquired both a 51%  interest  in
the  new Spanish subsidiary, Keller-Terra, for £8.6m, and
McKinney  Drilling in the US for an initial consideration
of  £17.1m,  together with the acquisition of  Vibropile,
announced  at  the half year, for £1.0m.   In  Specialist
Services, we added Wannenwetsch in Germany and Accrete in
the  UK  for  a  combined investment of £6.8m.    We  are
encouraged by both the strategic benefit and the  initial
performance  of these businesses as part  of  the  Keller
Group  and we have made good progress in terms  of  their
integration.   As  the acquisitions of  Keller-Terra  and
McKinney were not completed until the end of 2002,  there
is no contribution from them in these results.

Financing

We  completed two share issues during the year: 3.0m  new
shares  were  issued on 9 December 2002 as  consideration
for our 51% share in Keller-Terra and on 20 December 2002
we  raised approximately £5.1m through a placing of  2.2m
shares  to  part  finance  the acquisition  of  McKinney.
With  EBITDA interest cover remaining strong at 11 times,
the  board is of the view that the Group continues to  be
efficiently, but conservatively, financed.

Dividends

In  light  of  this  strong  performance,  the  Board  is
recommending  an  increased final dividend  of  6.6p  per
share (2001: 6.05p), bringing the total dividend for  the
year  to  9.9p (2001: 9.2p), an increase of  7.6%.   This
increase  is  in line with our policy of reinvesting  our
strong  cash flow in the continued growth of  the  Group,
whilst  at  the same time maintaining a healthy  dividend
cover  and  seeking  to  reward shareholders  with  above
inflation increases. We have achieved this aim  for  each
year  since flotation in 1994, returning compound  annual
dividend growth of 9.5%.

Board

After twelve years with the Group, including three and  a
half years as finance director, Justin Atkinson (42)  has
been  appointed  chief operating officer  with  immediate
effect.   A search for a new finance director is  already
underway.    Building on the management changes announced
at  the  half year, Bob Rubright (51) and Rob Ewen  (43),
managing  directors of Foundation Services and Specialist
Services  respectively, join the board with  effect  from
today.   The  promotion of these three extremely  capable
individuals  combines continuity with a fresh perspective
and reinforces our management structure.

In  January 2003, we welcomed Pedro Lopez Jimenez to  the
Board  as a non-executive director.  Amongst his external
appointments, Mr Lopez Jimenez is chairman  of  Terratest
Tecnicas  Especiales S.A., a shareholder in Keller-Terra.
With first-hand knowledge of the construction sectors  in
Europe and South America, his appointment brings valuable
insight  and  extensive international experience  to  the
board.

People

In  the  last two years, we have increased Group turnover
from  £313m to £511m, much of which has come from organic
growth.   This has presented a considerable challenge  to
our  management  and staff.  Delivering  this  growth  in
turnover,  whilst  increasing margins and  maintaining  a
healthy  cash  flow,  is  a  tribute  to  the  skill  and
dedication of our employees.   I would like to extend the
Board's sincere thanks for their hard work in 2002, which
has been at the heart of our success.

Strategy

Our  performance  in 2002 continues our impressive  track
record,  reflecting the consistency of  our  strategy  to
further  consolidate our global leadership in  Foundation
Services  and to strengthen and broaden our  offering  of
technical  services  and  products  to  the  construction
industry.   In 2003, we will continue to invest wisely in
our    existing   businesses   to   exploit   fully   the
opportunities to grow their market share and extend their
geographic  presence.    We will also  continue  to  take
advantage  of  selective acquisition opportunities  where
they  arise  and  where they offer long term  growth  and
value enhancement.

Outlook

In  closing, I am pleased to be able to report that we go
into  2003,  with  a  total order book representing  four
months' sales, which gives a strong platform for the year
ahead.   We see potential for continued growth in Europe,
given  our  broad product range, leading market positions
and sector mix.   In the US, although weather has delayed
some  job  starts,  we continue to see  strength  in  the
infrastructure  and  housing  sectors.     Against   this
background,  and  with  the  benefit  of  a  full  year's
contribution from McKinney and Keller-Terra, the  present
indications  encourage us to believe that  2003  will  be
another good year for the Keller Group.

Operating Review

2002  was  another highly successful year for Keller,  in
which we significantly improved margins and continued our
strong   track  record  of  growth.    Whilst  we   faced
difficult conditions in some of our traditional  markets,
the  range and technical superiority of our products  and
the  diversity of markets we serve once again held us  in
good stead.

Conditions in our major markets

Despite  the general economic uncertainty in the US,  the
construction market has remained resilient.  Towards  the
end  of  2002, activity slowed in the commercial  sector,
whilst housing and public infrastructure continued to  be
strong.    The picture across Europe was mixed:   Germany
saw  construction output fall for the eighth  consecutive
year  and  Poland  and  Switzerland  both  experienced  a
construction   slowdown.   France  and  Sweden   remained
robust, whilst Italy showed signs of growth.  Housing and
infrastructure  were fairly strong in  the  UK,  but  the
ground  engineering sub-sector remained  flat.  Overseas,
the  Far  East  once  again offered  good  opportunities,
whilst  the  Middle  East continued  to  be  slow.     In
Australia, both the commercial and infrastructure sectors
saw recovery from a post-Olympic slump.

Strategic developments

Last  year, we made further significant progress  towards
our   strategic  objective  of  developing   our   global
leadership  in  our  core  foundations  business,  whilst
expanding  the range of specialist products and  services
we   offer  to  the  built  environment.   In  Foundation
Services,  the acquisition of Vibropile consolidates  our
number  one ranking in the Australian foundations sector;
our  51%  interest  in Keller-Terra  will  enable  us  to
penetrate  the  growing  and  attractive  Spanish  ground
engineering  market; whilst the acquisition  of  McKinney
reinforces  our  position  as  the  leading  provider  of
foundation services in the US.   In Specialist  Services,
we acquired an 84% interest in Wannenwetsch, the supplier
of   robotic   hydrodemolition  services  for   precision
concrete  removal,  to  complement the  services  already
offered  by Makers in the concrete refurbishment  market.
In  addition, the acquisition of Accrete is enhancing the
position  of Makers Infrastructure as a major  partnering
contractor  in the water sector.   We are confident  that
we have the experience, skills and resources to add value
to  these businesses and to manage their integration,  as
our past track record amply demonstrates.

Foundation Services

The  Foundation Services operations had another excellent
year in 2002, with sales 4% ahead of last year at £361.4m
(2001:  £347.8m) and operating profit before amortisation
of goodwill of £27.7m (2001: £23.6m), 17% better than the
previous  year's good performance.   This result reflects
improved  margins  from  6.8%  to  7.7%,  combined   with
continued good organic growth.

North America

Hayward    Baker   achieved   another   good,    balanced
performance, with steady margin growth in the established
business,  complemented  by  the  strong  performance  of
recent  acquisitions, further increasing Hayward  Baker's
market  penetration.   The business continued  to  extend
its geographic presence through the opening of new branch
offices in Boston and Houston.

Sales  were once again dominated by small to medium sized
jobs  across the United States, for which Hayward Baker's
highly  developed,  regional  structure  enables  it   to
compete  successfully and profitably.    Risk  management
continues to be a priority and Hayward Baker continues to
focus  on projects with acceptable margins and levels  of
risk.

The  successful $23m Wickiup Dam remediation  project,  a
superjet  grouting  and earthworks  project  for  the  US
Bureau of Reclamation, was an exception to the normal job
profile.     This  is  the  largest  single  jet-grouting
project  ever  performed in the US,  involving  two  rigs
working  two shifts a day from April through  to  October
2002,  creating  a total of over 200,000 cubic  yards  of
Soilcrete  within  the dam.   Other significant  projects
undertaken during the year included a groundwater control
and  excavation project using various grouting techniques
for  a new sewer tunnel in Los Angeles; and a soil mixing
scheme to improve the stability of a site for three  310-
foot diameter petroleum tanks in Louisiana.

Case Foundation and Case Atlantic had a record year, with
both  sales and operating profit significantly  ahead  of
the  previous year's very strong performance.   Following
its  opening in January 2002, the new office  in  Phoenix
performed  well, continuing the geographic  expansion  of
the   Case   operation.   Amongst  the  noteworthy   jobs
undertaken during the year were the foundation system for
the Hyatt Center in Chicago; the installation of caissons
to support highway and railway bridges over the Tennessee
River  in Northern Kentucky; and construction of concrete
diaphragm  walls  at the University of  Chicago  Graduate
School.    The  largest  single  job  in  Case's  50-year
history,  the  Cooper River Bridge in  Charleston,  South
Carolina, began in 2002 and was 60% complete at the  year
end.    The  project is being performed by Case  Atlantic
and   involves  the  construction  of  10-foot   diameter
caissons to a maximum depth of 230 feet.

At  the  end  of  2002, we completed our  acquisition  of
McKinney,  a  leading provider of drilled shaft  caissons
across   the   Eastern  US.    This  high-margin,   well-
established  business operates principally in  the  civil
(highways   and   bridges)   and   commercial    sectors.
Operating at the small to mid-diameter end of the caisson
market, the McKinney products complement those offered by
Case  and,  whilst McKinney will continue to  be  managed
separately,  there  are expected  to  be  some  synergies
between the two businesses.

Continental Europe & Overseas

Our  Continental  Europe  &  Overseas  business  reported
another  excellent performance.  Once  again,  the  broad
spread of markets we serve provided some insulation  from
the difficult economic conditions persisting in parts  of
Europe  and  the  Middle  East.  In  the  face  of   keen
competition,  the continuous development of  technologies
such  as  Vibro and Soilcrete has been key to maintaining
our market leading edge.

Against  a  general  downturn in the German  construction
market of around 9% last year, our German operation saw a
slight  reduction  in  sales,  but  improved  its  margin
significantly,  thereby increasing its contribution.   We
saw  an  increase  in sales in Austria,  despite  growing
competition, and in France, after extending the range  of
products on offer and our geographic reach.    In Sweden,
we  increased  sales  volume and  margins,  predominantly
using  the  lime column technology of our LCM  subsidiary
which  we  continue  to introduce to  other  territories.
After  a  difficult start to the year, our  operation  in
Poland saw a recovery in the second half, when it took on
a  significant amount of flood protection work.   With  a
steady performance in the Czech Republic and Slovakia and
an   established  presence  in  Croatia,  we   are   well
positioned  to take advantage of the growth opportunities
that  are  expected  to result from an enlarged  European
Union.

Within   the  Overseas  division,  the  Far  East  region
delivered  the lion's share of sales volume  and  profit.
In  Singapore,  two large sand compaction  contracts  for
land   reclamation  schemes  progressed  well.   A   good
performance  was  delivered on  the  Ipoh-Rawang  railway
project,  which  marked  the  introduction  of  the   LCM
technology  to  Malaysia.  Results for  the  Middle  East
region   were   in  line  with  our  expectations.    Our
geographic expansion continues with the establishment  of
a  new  branch in Morocco and subsidiaries in  India  and
Algeria.

UK

In  line  with the results for the half year, volumes  in
KGE, the UK foundation business, were some 6% down on the
previous  year,  whilst margins improved, justifying  our
concentration on value-added, higher margin products.

The range of solutions KGE can provide is a key factor in
winning  work and last year, as anticipated, KGE  stepped
up  its  offering of mixed-product packages.   An example
of  this  was  the  solution for  a  brownfield  site  in
Feltham,   Middlesex,  being  developed  by   a   leading
housebuilder.    A  combination of vibro  stone  columns,
driven cast in-situ piles, continuous flight auger  bored
piles  and  dynamic compaction provided a  cost-effective
and technically efficient means of stabilising the ground
and  supporting the proposed structures.   KGE's  package
offering  has  been enhanced by the development  of  soil
reinforcing  systems,  which provide  an  alternative  to
concrete,  steel  or brickwork retaining  walls,  with  a
particular  application in rail and  highway  improvement
schemes.

Throughout    2002,   KGE   developed   new    partnering
relationships  with a number of general  contractors  and
homebuilders,  resulting  in an increased  proportion  of
repeat  and negotiated work. Such a relationship  led  to
Keller's  involvement  in  the  high  profile  Blackheath
project,  where compaction grouting was used to stabilise
a  road  collapse on the main A2 route through  Greenwich
into central London.

The  single  biggest contract on which  KGE  was  engaged
during  the  year  was CTRL 310, where it  is  installing
large  diameter rotary bored pile foundations to  support
structures  for  the second phase of the  Channel  Tunnel
Rail Link.

Australia

2002  saw a very strong performance from Franki Australia
and  an  excellent  result by our mid  year  acquisition,
Vibropile.   Franki Indonesia also performed particularly
well, in the light of the continuing fragile economy  and
an almost total lack of foreign investment.

Major contracts in Australia during the year included the
foundations for the prestigious 88-storey 'Q1'  Tower  on
the Gold Coast and the Asset Development Project for BHP-
Billiton at Port Hedland in northern Western Australia, a
particularly  demanding  design  and  construct   package
requiring  very  close  co-operation  with  the   client.
Franki  also  successfully carried  out  jet-grouting  to
retain the basement boundaries on a refurbishment project
in  Manly,  Sydney with extremely restricted  access  and
used compaction grouting techniques for Port Waratah Coal
Services  to re-level a conveyor transfer house that  had
tilted at their Kooragang Terminal, near Newcastle.

The  acquisition  of Vibropile has strengthened  Keller's
position  as the leading specialist foundation contractor
in  Australia,  bringing expertise in  hard  rock  rotary
drilling,   deep  continuous  flight  auger  and   rotary
displacement  piles to complement our existing  range  of
products.

Specialist Services

The   results  for  the  Specialist  Services  operations
include,  for  the first time, a full year for  Suncoast.
With   sales  of  £149.6m  and  operating  profit  before
amortisation  of  goodwill of £8.8m, Specialist  Services
now  accounts  for  29%  of Group  turnover  and  26%  of
operating profit.

Makers

Last  year,  Makers started to reap the benefits  of  the
investment  in core business systems, which characterised
the  previous year and created the platform  for  growth.
The  business  is now clearly structured around  its  key
markets  - social housing, car parking and infrastructure
-  in  which Makers has established a growing  number  of
long-term partnering relationships.

In  social  housing, which accounts  for  around  50%  of
turnover,  Makers  worked  with  21  out  of  33   London
Boroughs,  together with a further 25  local  authorities
outside London.  Makers was pleased to secure first  time
contracts  with  the  London  Boroughs  of  Lambeth   and
Islington and Mercian Housing Association. The successful
track record with the City of Westminster, which has been
at  the  vanguard of partnering arrangements  for  social
housing  refurbishment, has resulted in  approaches  from
other authorities looking to adopt the Westminster model.
Makers  is  hopeful  of securing partner  status  with  a
number  of  these clients in 2003. During the  year,  the
business moved into reactive maintenance services through
its  joint  venture  company,  Makers  Haywards  Property
Service  (MHPS).    Supported  by  a  state  of  the  art
communication  and  job-processing  system,  MHPS  had  a
pleasing  first year, serving several housing  'villages'
within the City of Westminster.

Makers  Parking  completed  the  refurbishment  works  at
Heathrow's  Short  Stay Car Park 1 and  replaced  support
columns  at  Car Park 3 which had been unsettled  by  the
tunnelling  for  the  adjacent Heathrow  Express  railway
line.   In addition to working with BAA and other clients
on deteriorated car park structures, Makers completed its
first  new  build multi-storey car park during the  year.
The  innovative and practical design of this steel-framed
car  park  attracted significant interest and  Makers  is
about  to  embark on a similar project for  Norwich  City
Council.

Last   year,   Makers  restructured  its   former   civil
engineering  repair  division  into  dedicated  teams  of
industry   specialists  under   the   new   name   Makers
Infrastructure.    The infrastructure division  works  on
capital   refurbishment  projects,  either  as   a   main
contractor  or as a specialist supply chain  partner,  to
the   highway  authorities,  the  railway  industry   and
utilities.   Makers' position in the UK water market  was
strengthened through the acquisition of Accrete in August
2002.    Accrete  provides a wide range  of  maintenance,
refurbishment  and security services  to  the  water  and
waste-water  industry through framework  agreements  with
Scottish  Water, Yorkshire Water, South  West  Water  and
Vivendi.

Wannenwetsch

During the year we increased our stake in Wannenwetsch to
84%,  from our original 49% interest acquired in  January
2002.    Wannenwetsch  returned an  excellent  margin  on
sales  that were almost entirely domestically sourced  in
Germany.   With  a  new management  team  in  place,  the
business  will  now focus on growing  its  share  of  the
repair  and  maintenance market,  one  of  the  expanding
segments  of  the construction market in Central  Europe,
and taking its technology into new territories.

Suncoast

Suncoast  produced a satisfactory result  for  the  year,
albeit at the lower end of our original expectations. The
principal weakness was in high rise activity following 11
September,  on  which we reported at the  half  year  and
which  continued  into the second  half.    In  addition,
sales  in the slab-on-grade market were affected  in  the
last  few  months of the year by adverse weather  in  the
Texas area.

With  a strengthened management team and new control  and
information  systems  in place, Suncoast  is  now  better
placed  to  anticipate and mitigate the effects  of  such
external  factors on its business.   The growth prospects
of  the  business will be enhanced by further  geographic
diversification.     To  this  end,  new   offices   were
established in Las Vegas, Sacramento, Atlanta and Denver,
marking  the start of a rollout of the business into  new
markets  where competition is fragmented and  significant
opportunities exist for Suncoast to increase  its  market
share.    As the opening of new offices gathers momentum,
Suncoast's  heavy  reliance  on  the  Texas  area,  which
accounted for some 73% of sales in 2002, will be reduced.

Improved  management information is also enabling  us  to
improve  operational efficiency within  Suncoast.    Last
year  we reduced inventory levels by 13% through improved
controls,   whilst  the  investment  in   upgrading   the
production  facility in Houston is expected  to  generate
cost  savings  this  year.   In addition,  the  advantage
which  Suncoast has over its smaller competitors in terms
of  strand-buying is expected to strengthen  as  domestic
strand prices increase.

Financial review

Results

The  Group's operating profit before the amortisation  of
goodwill at £34.3m was 35% higher than in 2001.  Some  5%
or  £1.4m  of this increase arose as a result  of  profit
earned  on  the acquisitions made during  the  year.   In
addition, the Suncoast business acquired in October  2001
contributed  a  full year's profit against a  three-month
contribution last year.

Group  operating  margins  before  goodwill  amortisation
increased to 6.7% from the 6.0% margin reported in  2001,
reflecting the full year impact of the Suncoast  business
together  with  improved margins  across  all  our  major
Foundation Services business units.

The  average foreign currency exchange rates of the  Euro
and  Australian dollar against Sterling each strengthened
by  around 1% year on year but the US dollar weakened  by
some  4%  against  Sterling.  Cumulatively  this  had  an
adverse   effect  on  operating  profit  before  goodwill
amortisation of £0.8m.

Stripping  out the effects of acquisitions and  currency,
the  like for like growth in operating profit before  the
amortisation  of  goodwill was 14%  indicating  that  the
Group has continued to deliver strong organic growth.

Acquisitions

Several  acquisitions were made in the year for  a  total
investment  (including costs) of £34.4m, of which  £19.3m
was  in cash. In December, McKinney Drilling was acquired
for  an  initial  consideration of  £17.1m  funded  by  a
placing  of  new shares and an extension to  the  Group's
banking  facilities.  There is a  deferred  consideration
payable  in 2005 dependent on McKinney's results  in  the
two  years  to  December  2004.  The  directors'  current
estimate of such deferred consideration is £1.7m. Also in
December,  the Group created a new venture, Keller-Terra,
with  Terratest, one of Spain's leading ground engineers,
with an investment of £8.6m, representing 51% of the  new
venture. This was satisfied by the issue of 3m new Keller
shares   to   Terratest.   In  August,  Keller  Australia
purchased Vibropile for a cash consideration of £1.0m and
Makers  UK purchased Accrete for an initial consideration
of   £3.2m  with  a  deferred  consideration  which   the
directors  currently  estimate  at  £0.9m.  A  number  of
smaller  investments were made during the year  including
the  buy  out  of the remaining 15% minority interest  in
Keller   Australia   and   an  investment   of   84%   in
Wannenwetsch,  a  German concrete repair business.  Total
net  debt assumed on all of these acquisitions was  £0.8m
with net goodwill arising of £8.7m.

Capital and reserves

The net assets of the Group increased during the year  by
£26.8m  to stand at £100.1m at 31 December 2002. The  net
goodwill carried on the balance sheet increased by  £5.7m
to  £66.3m  and taking into account other intangibles  of
£0.4m  the  tangible net assets were £33.4m at  the  year
end,  an  increase of two and a half times the figure  at
the end of the prior year.

Of  the  increase in net assets, £13.6m net  of  expenses
arose  as  a  result of the two share issues  during  the
year:  3,029,000  shares at 277p for  the  investment  in
Keller-Terra and 2,215,000 shares at 240p for the partial
funding  of  McKinney.  Retained  earnings  increased  by
£10.1m  in  the year and minority interests increased  by
£3.2m reflecting the new 49% minority in Keller-Terra and
the  new 16% minority in Wannenwetsch, offset by the buy-
out of the 15% minority in Keller Australia.

Group insurances

In  line  with most other businesses in our industry  the
Group  has faced significant rises in its insurance costs
during the year.

As  a  result of this, and after taking advice  from  our
insurance   brokers   and  reviewing  several   available
options,  the  Group set up a captive  insurance  company
with effect from May 2002 to self insure a portion of the
general  third  party insurance exposure. The  provisions
for  reserves made by the captive together with net  cash
balances  retained  by the captive are consolidated  with
these financial statements.

Accounting standards

Although  the full implementation of FRS17 on  retirement
benefits  has  been  deferred  indefinitely,  under   its
transitional disclosures, the net deficit after  deferred
tax  relief  in the UK-based Keller Group Pension  Scheme
has increased to £4.6m. This increase has arisen not only
as  a  result of the recent deterioration in  the  equity
markets  but  also  as a result of  a  reduction  in  the
discount  rate used to value the liabilities. The  scheme
has  been closed to new employees since 1999 and all  new
contributions  into  the  scheme  are  going  into  fixed
interest securities, with the split between equities  and
bonds  being  60%  to 40% at the year end.  Contributions
into  the scheme have been increased. In addition to this
defined benefit scheme the Group retains funds within the
business  to provide for retirement obligations  for  the
German  and Austrian employees. Although these retirement
obligations  are  not fully funded the respective  assets
and liabilities are included within debtors and creditors
on  the Group balance sheet. All other pension provisions
in the Group are of a defined contribution nature.

UITF  Abstract 34 on pre contract costs which was  issued
in  May  2002 has had no adverse impact on the Group.  In
general the Group's contracts are of a relatively  short-
term  nature  and the Group has always had  a  policy  of
expensing all bid related costs as they are incurred.

Taxation

The Group's effective tax rate for the year at 39% is the
same   as   that  of  the  prior  year.  While  this   is
significantly higher than the standard UK corporation tax
rate of 30% it is a direct result of more than 60% of the
Group's  taxable  profit arising  in  the  US  where  the
effective  federal and state tax rate is nearly  40%  and
less than 5% of taxable profit arising in the UK .

Cash flow and net debt

The operating cash flow of the Group at £43.2m represents
126% of the operating profit before goodwill amortisation
in  the year compared to £32.2m and 127% respectively for
the  prior  year.  Cash conversion is one  of  the  great
strengths of this Group and is something that all of  our
key  employees  work  hard  to achieve.  Working  capital
controls  have remained good with an inflow from  working
capital of £0.5m in the year, despite sales increases  of
21%.  However, net capital expenditure has increased over
the prior year and at £12.7m, of which £1.8m was spent on
land  and  buildings, it was one and  a  half  times  the
depreciation charge.

Although  net  debt levels at the year end  increased  to
£68.0m  from £63.2m the previous year, the gearing  level
reduced from 86% to 68%. The majority of the Group's debt
is  denominated in US dollars reflecting its  profit  and
asset profile.

The  net  interest charge in the year of £3.9m more  than
doubled  compared  to  the previous year  reflecting  the
higher  debt  levels  taken on since the  acquisition  of
Suncoast in October 2001. The Group increased its banking
facilities  in  December 2002 to help fund  the  McKinney
acquisition,  when  the  revolving  credit  facility  was
increased from £40m to £53m and a new four year term loan
of  $18m  was  negotiated. Around 60% of the Group's  net
debt  is  subject  to floating interest  rates  with  40%
subject to fixed rates until September 2004.

The   Group  has  sufficient  headroom  in  its   banking
facilities   and  its  banking  covenants  to   give   it
flexibility in funding its existing operations and future
strategy. The Group's EBITDA interest cover for 2002  was
11.1 times (2001: full year pro forma of 7.8 times), well
within its banking covenant.

Earnings and dividends

After a minority interest charge of £0.2m, slightly below
the  prior year, and an increase in the weighted  average
number  of  shares in issue during the year of  3,109,000
reflecting  the  placing  of shares  which  was  made  in
December  2001,  earnings per share  for  the  year  were
27.5p,  an increase of 17% on 2001 reflecting an increase
in  the  goodwill  charge from £1.3m to  £3.1m  in  2002.
Earnings per share before goodwill amortisation of  32.7p
were 27% ahead of the prior year.

Following the recommendation of a final dividend of 6.6p,
the  total dividend for the year of 9.9p, an increase  of
8%  on  2001,  is covered 2.6 times by earnings  and  3.1
times by earnings before goodwill amortisation.

Consolidated Profit and Loss account
for the year ended 31 December 2002


                                                                   2002          2002          2001
                                                   2002      Continuing    Continuing    Continuing
                                   Note      Continuing      operations    operations    operations
                                             operations    Acquisitions         Total         Total
                                                   £000            £000          £000          £000
------------------------------------------------------------------------------------------------------
Turnover                             1          502,403           8,568       510,971       422,248
Operating costs                                (472,451)         (7,276)     (479,727)     (398,070)
------------------------------------------------------------------------------------------------------
Operating profit before
amortisation of goodwill                         32,955           1,389        34,344        25,429
Amortisation of goodwill                         (3,003)            (97)       (3,100)       (1,251)
------------------------------------------------------------------------------------------------------
Operating profit                                 29,952           1,292        31,244        24,178
Net interest payable                                                           (3,914)       (1,785)
------------------------------------------------------------------------------------------------------
Profit on ordinary activities
before taxation                                                                27,330        22,393
Taxation                             2                                        (10,684)       (8,684)
------------------------------------------------------------------------------------------------------
Profit on ordinary activities
after taxation                                                                 16,646        13,709
Equity minority interests                                                        (233)         (342)
------------------------------------------------------------------------------------------------------
Profit for the financial year                                                  16,413        13,367
Dividends paid and proposed          3                                         (6,284)       (5,401)
------------------------------------------------------------------------------------------------------
Retained profit for the financial year                                         10,129         7,966
======================================================================================================

Basic earnings per share             4                                          27.5p         23.6p
------------------------------------------------------------------------------------------------------
Earnings per share before
amortisation of goodwill             4                                          32.7p         25.8p
------------------------------------------------------------------------------------------------------
Diluted earnings per share           4                                          27.3p         23.4p
------------------------------------------------------------------------------------------------------
Diluted earnings per share before
amortisation of goodwill             4                                          32.5p         25.6p
------------------------------------------------------------------------------------------------------




Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2002

                                                                                  2002          2001
                                                                                  £000          £000
------------------------------------------------------------------------------------------------------
Profit for the financial year                                                   16,413        13,367
Currency translation differences on overseas investments                          (107)         (555)
Prior year adjustment in 2001                                                        -        (1,081)
------------------------------------------------------------------------------------------------------
Total recognised gains and losses relating to the year                          16,306        11,731
======================================================================================================



Consolidated Balance Sheet
As at 31 December 2002




                                                               2002                2001
                                                               £000                £000
------------------------------------------------------------------------------------------------
Fixed assets
Positive goodwill                                            68,529              60,752
Negative goodwill                                            (2,239)               (105)
------------------------------------------------------------------------------------------------
                                                             66,290              60,647

Other intangible assets                                         374                 372
------------------------------------------------------------------------------------------------
Intangible assets                                            66,664              61,019
Tangible assets                                              79,815              59,277
Investments                                                       -                   -
------------------------------------------------------------------------------------------------
                                                            146,479             120,296
------------------------------------------------------------------------------------------------
Current assets
Stocks                                                       15,147              12,466
Debtors                                                     143,897             120,318
Cash at bank and in hand                                     16,206              12,209
------------------------------------------------------------------------------------------------
                                                            175,250             144,993
Creditors: amounts falling due within one year             (141,404)           (129,143)
------------------------------------------------------------------------------------------------
Net current assets                                           33,846              15,850
------------------------------------------------------------------------------------------------
Total assets less current liabilities                       180,325             136,146
Creditors: amounts falling due after more than one year     (72,341)            (56,825)
Provision for liabilities and charges                        (7,840)             (6,046)
------------------------------------------------------------------------------------------------
Net assets                                                  100,144              73,275
================================================================================================

Capital and reserves
Called up share capital                                       6,498               5,968
Share premium account                                        35,293              22,202
Capital redemption reserve                                    7,629               7,629
Profit and loss account                                      46,494              36,472
------------------------------------------------------------------------------------------------
Equity shareholders' funds                                   95,914              72,271
Equity minority interests                                     4,230               1,004
------------------------------------------------------------------------------------------------
                                                            100,144              73,275
================================================================================================


Consolidated Cash Flow Statement
for the year ended 31 December 2002

                                                  2002          2002         2001         2001
                                                  £000          £000         £000         £000
------------------------------------------------------------------------------------------------
Net cash inflow from operating activities                     43,171                    32,187

Returns on investment and servicing of finance
Interest received                                  288                        482
Interest paid                                   (4,073)                    (1,951)
Interest element of finance lease rental
payments                                          (104)                       (71)
Finance costs of new bank loans                   (297)                    (1,646)
Payments to minority interests                    (172)                      (115)
------------------------------------------------------------------------------------------------
                                                              (4,358)                   (3,301)

Taxation
UK corporation tax paid                           (403)                      (505)
Overseas tax paid                               (8,572)                    (7,732)
------------------------------------------------------------------------------------------------
                                                              (8,975)                   (8,237)

Capital expenditure
Purchase of intangible fixed assets                (82)                       (72)
Purchase of tangible fixed assets              (16,868)                   (11,385)
Sale of tangible fixed assets                    4,250                      1,223
------------------------------------------------------------------------------------------------
                                                             (12,700)                  (10,234)

Acquisitions and disposals
Acquisition of subsidiary undertakings         (32,941)                   (67,343)
Net cash acquired with subsidiary undertakings     899                         13
------------------------------------------------------------------------------------------------
                                                             (32,042)                  (67,330)
Equity dividends paid                                         (5,609)                   (5,000)
------------------------------------------------------------------------------------------------
Net cash outflow before use of liquid
resources and financing                                      (20,513)                  (61,915)
Management of liquid resources
(Payments into)/repayments from short
term bank deposits                                               (61)                      947

Financing
Issue of new shares                             13,621                      7,944
New bank loans drawn                            72,555                     62,153
Repayment of bank loans and loan notes         (54,759)                   (18,407)
Sale and leaseback transactions                    739                        887
Capital element of finance lease rental payments  (902)                      (396)
------------------------------------------------------------------------------------------------
Net cash inflow from financing                                 31,254                    52,181
------------------------------------------------------------------------------------------------
Increase/(decrease) in cash in the year                        10,680                    (8,787)
================================================================================================


Notes to the accounts

1.Segmental analysis
  Turnover, operating profit and net assets may be analysed as follows:

------------------------------------------------------------------------------------------------
                                                                  2002        2002         2001
                                                  2002      Continuing  Continuing   Continuing
                                            Continuing      operations  operations   operations
                                            operations    Acquisitions       Total        Total
                                                  £000            £000        £000         £000
------------------------------------------------------------------------------------------------

Turnover
Class of business
Foundation services                            356,416           5,025     361,441      347,826
Specialist services                            145,987           3,543     149,530       74,422
------------------------------------------------------------------------------------------------
                                               502,403           8,568     510,971      422,248
================================================================================================

Geographical origin
United Kingdom                                 104,704           2,034     106,738      100,130
The Americas                                   242,567               -     242,567      188,761
Continental Europe and overseas                133,918           1,681     135,599      115,008
Australia                                       21,214           4,853      26,067       18,349
------------------------------------------------------------------------------------------------
                                               502,403           8,568     510,971      422,248
================================================================================================
Operating profit
Class of business
Foundation services                             26,625              761     27,386       23,216
Specialist services                              5,490              531      6,021        2,762
------------------------------------------------------------------------------------------------
                                                32,115            1,292     33,407       25,978
------------------------------------------------------------------------------------------------

Geographical origin
United Kingdom                                   3,830              117      3,947        3,167
The Americas                                    19,536                -     19,536       16,344
Continental Europe and overseas                  7,490              430      7,920        5,820
Australia                                        1,259              745      2,004          647
------------------------------------------------------------------------------------------------
                                                32,115            1,292     33,407       25,978
Unallocated central costs                                             -     (2,163)      (1,800)
------------------------------------------------------------------------------------------------
                                                                            31,244       24,178
------------------------------------------------------------------------------------------------
Net interest payable                                                        (3,914)      (1,785)
------------------------------------------------------------------------------------------------
Profit on ordinary activities before  taxation                              27,330       22,393
================================================================================================

The  amortisation  of  goodwill  has  been  analysed   by
geographic  segment as follows:  United Kingdom  £376,000
(2001:   £288,000),   The  Americas   £2,802,000   (2001:
£1,005,000),  Continental Europe  and  overseas  £122,000
(2001: £62,000) and Australia a credit of £200,000 (2001:
credit £104,000).
The amortisation of goodwill has been analysed by class of
business as follows:  Foundation services £292,000 (2001:
£336,000),   Specialist   services   £2,808,000    (2001:
£915,000).

1.   Segmental analysis continued


                                                         2002                  2001
Net assets                                               £000                  £000
Class of business
Foundation services                                    73,986                69,532
Specialist services                                    94,153                66,945
--------------------------------------------------------------------------------------
                                                      168,139               136,477
Net debt                                              (67,995)              (63,202)
--------------------------------------------------------------------------------------
                                                      100,144                73,275
--------------------------------------------------------------------------------------

Geographical origin
United Kingdom                                         22,839                 9,194
The Americas                                          115,507               109,862
Continental Europe and overseas                        26,251                15,468
Australia                                               3,542                 1,953
--------------------------------------------------------------------------------------
                                                      168,139               136,477
Net debt                                              (67,995)              (63,202)
--------------------------------------------------------------------------------------
                                                      100,144                73,275
======================================================================================

In the opinion of the directors:  (i) it is not deemed
appropriate to analyse net debt and net interest payable
thereon by geographic segment, and (ii) turnover by
destination is not materially different from turnover by
origin.


                                                         2002                  2001
2.  Taxation                                             £000                  £000
The taxation charge comprises:
--------------------------------------------------------------------------------------
Current tax
UK corporation tax on the profits of the period           342                   411
Overseas tax                                            9,555                 9,285
Adjustments in respect of previous periods             (1,030)                   37
--------------------------------------------------------------------------------------
                                                        8,867                 9,733
--------------------------------------------------------------------------------------
Deferred tax
Current year                                              359                (1,049)
Prior year                                              1,458                     -
--------------------------------------------------------------------------------------
                                                        1,817                (1,049)
--------------------------------------------------------------------------------------

======================================================================================
                                                       10,684                 8,684
======================================================================================


                                                         2002                  2001
3. Dividends paid and proposed                           £000                  £000
Ordinary dividends on equity shares
--------------------------------------------------------------------------------------
Interim paid                                            1,995                 1,790
Final proposed                                          4,289                 3,611
--------------------------------------------------------------------------------------
                                                        6,284                 5,401
======================================================================================

An interim ordinary dividend of 3.3p (2001: 3.15p) per
share was paid on 31 October 2002.  The final proposed
ordinary dividend of 6.6p (2001: 6.05p) per share will be
paid on 30 May 2003 to holders on the register at 2 May
2003.


4.Earnings per share
  Earnings per share is calculated as follows:
-------------------------------------------------------------------------------------------------------
                                                       2002           2002          2001           2001
                                                      Basic        Diluted         Basic        Diluted
-------------------------------------------------------------------------------------------------------

Profit after tax and minority interests         £16,413,000    £16,413,000   £13,367,000    £13,367,000
-------------------------------------------------------------------------------------------------------
                                                     No. of         No. of        No. of         No. of
                                                     shares         shares        shares         shares
-------------------------------------------------------------------------------------------------------
Weighted average of ordinary shares in
issue during the year                            59,749,130     59,749,130    56,640,447     56,640,447
-------------------------------------------------------------------------------------------------------
Add: Weighted average of shares under option
     during the year                                      -        993,116             -        168,862
-------------------------------------------------------------------------------------------------------
Add: Weighted average of own shares held                  -        218,625             -        318,000
-------------------------------------------------------------------------------------------------------
Subtract:  Number of shares assumed issued at
fair value during the year                                -       (827,442)            -        (79,362)
-------------------------------------------------------------------------------------------------------
Adjusted weighted average ordinary shares
in issue                                         59,749,130     60,133,429    56,640,447     57,047,947
-------------------------------------------------------------------------------------------------------
                                                      pence          Pence         pence          pence
-------------------------------------------------------------------------------------------------------
Earnings per share                                     27.5           27.3          23.6           23.4
=======================================================================================================

Earnings per share before amortisation of goodwill of
32.7p (2001: 25.8p) is calculated based on profit after
tax and minority interests before amortisation of
goodwill of £19,513,000 (2001: £14,618,000) and the
weighted average number of ordinary shares in issue
during the year of 59,749,130 (2001: 56,640,447).

Diluted earnings per share before amortisation of goodwill
of 32.5p (2001: 25.6p) is calculated based on profit
after tax and minority interests before amortisation of
goodwill of £19,513,000 (2001: £14,618,000) and the
adjusted weighted average number of ordinary shares in
issue during the year of 60,133,429 (2001: 57,047,947).

5. Foreign Currencies

Balance sheet items in foreign currencies are translated
into Sterling at closing rates of exchange at the balance
sheet date.  However, if amounts receivable and payable
in foreign currencies are covered by a forward contract,
the contract rate of exchange is used for translation.
Profit and loss accounts and cash flows of overseas
subsidiary undertakings are translated into Sterling at
average rates for the year.

Exchange differences arising from the retranslation of
opening net assets and profit and loss accounts at
closing rates of exchange are dealt with as movements on
reserves.  All other exchange differences are charged to
the profit and loss account.

The exchange rates used in respect of principal currencies are:

                                         2002        2001

US Dollar: average for year              1.50        1.44
US Dollar: year end                      1.60        1.45
Australian Dollar: average for year      2.77        2.79
Australian Dollar: year end              2.84        2.84
Euro: average for year                   1.59        1.61
Euro: year end                           1.53        1.64


6.Basis of preparation

The financial information set out above does not
constitute the Company's statutory accounts for the years
ended 31 December 2002 or 2001 but is derived from those
accounts.  Statutory accounts for 2001 have been
delivered to the Registrar of Companies and those for
2002 will be delivered following the Company's Annual
General Meeting.  The auditors have reported on those
accounts: their reports were unqualified and did not
contain statements under section 237 (2) or (3) of the
Companies Act 1985.

Accounts will be posted to shareholders by 10 April 2003.
The Annual General Meeting will be held on 13 May 2003.



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