Shares in Keller (KLR) fell by 11 per cent after the ground engineering specialist warned that full-year profits would be at the lower end of management expectations. The principle drag on profits in the first half came from a disappointing performance in the Asia-Pacific division, where tough trading conditions and project delays turned the previous half-year profit of £4.8m into a loss of £9.6m. Steps announced late last year to restructure this business segment have realised annualised cost savings of £3m, and a further £3m is expected to be saved from operational efficiencies over the next 12 months.
On a brighter note, trading in North America, which accounts for more than half of the top line, saw operating profits rise by 18 per cent to £33.6m, driving operating margins up from 6.8 per cent to 7.2 per cent. At the half-year end, the US order book was up 10 per cent from a year earlier, while an increase in housing starts helped to boost Suncoast, the residential construction arm. Keller Canada continued to struggle, though, with a $42m (£32m) subway contract due to start in April now not expected to commence until November.
Analysts at Peel Hunt have downgraded their estimates for the full year to December 2016, and now expect adjusted pre-tax profits of £102m and EPS of 96.1p (from £96.9m and 87.5p in 2015).
| KELLER (KLR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 936.5p | MARKET VALUE: | £672m | |
| TOUCH: | 930-937.5p | 12-MONTH HIGH: | 1,069p | LOW: 720p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 520p* | NET DEBT: | 90% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 756 | 31.6 | 27.9 | 8.8 |
| 2016 | 850 | 25.0 | 21.9 | 9.25 |
| % change | +12 | -21 | +11 | +5 |
Ex-div: 1 Sep Payment: 30 Sep *Includes intangible assets of £182m, or 253p a share | ||||
