Keller's shares rose by more than 5 per cent after the ground engineering specialist more than doubled first-half operating profits to £13.3m and has increased its forward order book by 27 per cent year on year. What's more, chief executive Justin Atkinson confirmed that an accelerated ramp-up on several key projects in the second half will boost full-year earnings above the top end of current estimates. This prompted analysts at Investec to upgrade their pre-tax profits estimate by 17 per cent to £35m, which means the shares are now priced on a modest 12 times full-year adjusted EPS estimates of 38.1p (24.4p in 2011).
Most of the improvement came from a much stronger performance in the US, which accounted for nearly half of group turnover. Public sector work remained weak, but solid demand from the private commercial and residential construction sectors helped to lift operating profits to £7.6m, compared with a £1.8m loss in the first half of 2011. Other overseas markets were also strong; operating profits in Asia rose from £3.3m to £6.1m, while demand from a strong resources sector pushed profits ahead by 29 per cent in Australia, to £4.5m.
However, the stagnation of public works projects and lack of private sector work due to the economic uncertainty meant revenues declined 16 per cent in Europe, Middle East and Africa (Emea) and meant last year's £3.2m profit tuned into a loss of £2.8m.
| KELLER (KLR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 455p | MARKET VALUE: | £293m | |
| TOUCH: | 450-460p | 12-MONTH HIGH: | 467p | LOW: 233p |
| DIVIDEND YIELD: | 5.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 485p* | NET DEBT: | 37% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 546 | 3.4 | 4.6 | 7.60 |
| 2012 | 614 | 11.0 | 12.4 | 7.60 |
| % change | +12 | +224 | +170 | - |
Ex-div: 10 Oct Payment: 1 Nov *Includes intangible assets of £99m, or 154p a share | ||||
