Keller has been successful in broadening its geographical presence, and was rewarded in the first half of the year with sharply higher turnover in Australia and a broadly flat performance from continental Europe, the Middle East and Asia (Cemea). But the world's largest ground engineering specialist remains heavily exposed to the weak US market which still accounts for 40 per cent of group revenues.
Construction spending in the US commercial sector fell by 36 per cent, following on a 26 per cent fall in 2009. And while there were some benefits from government measures to boost spending, state spending was significantly lower. Turnover in the US fell from £268m to £198m and the operation turned in a £1m loss, compared to an £18.6m profit in the first half last year. Margins have been under severe pressure and are not expected to improve near-term, although there are some encouraging signs, notably a 13 per cent rise in the US order book from a year earlier.
Turnover in Cemea held up reasonably well, but the impact of bad weather disrupting work in the first quarter and weak trading in Spain, France and Austria, meant profits more than halved to £9.3m. In contrast, market conditions in Australia remain strong, underpinned by ongoing infrastructure spend and Asian demand for commodities.
Numis Securities forecasts full-year pre-tax profits of £47.5m and EPS of 48.1p (from £74.7m and 78.8p in 2009).
| KELLER (KLR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 567p | MARKET VALUE: | £365m | |
| TOUCH: | 566-570p | 12-MONTH HIGH: | 793p | LOW: 516p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 461p* | NET DEBT: | 40% | |
| Half-year to 30 Jun | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2009 | 553 | 41.0 | 42.1 | 7.25 |
| 2010 | 497 | 11.3 | 12.5 | 7.60 |
| % change | -10 | -72 | -70 | +5 |
Ex-div:06 Oct Payment:01 Nov *Includes intangible assets of £128m, or 199p a share | ||||
