Engineer Keller rocked by fraud at its Australian arm

KELLER saw its share price slump after uncovering a financial reporting scandal at its Australian business.

The FTSE 250 engineering contractor said an internal review discovered an ‘apparently deliberate and sophisticated financial reporting fraud’ at Austral.

The company – which specialises in bridge building and foundation drilling and has worked on London’s Olympic Stadium and parts of the HS2 high speed railway – immediately sacked two workers.

An investigation is under way and Keller has appointed an external adviser to conduct an independent probe into the incident. The company predicted the fraud overstated Austral’s performance from 2019 onwards, and as a result its profits for 2022 were expected to be ‘slightly below’ market expectations of £109m to £114m.

Keller shares dropped 12pc, or 101p, to 740p. Boss Michael Speakman said the firm responded ‘swiftly and decisively’ to the fraud. But he added it was ‘inappropriate to comment further’ until the investigation was complete and the consequences were ‘fully understood’.

Austral, which Keller bought for £20.5m in 2015, accounts for around 3pc of the firm’s annual revenues and has worked on projects with companies including mining groups Rio Tinto and BHP.

The fraud revelation overshadowed a mostly positive end to 2022 for Keller’s other divisions. The firm said its North American business had experienced a ‘high level of activity’ while inflation and supply chain pressures had eased. European trading had also been ‘robust’ despite disruption and ‘economic uncertainty’.