Headline half-year profits at ground engineering specialist Keller (KLR) were flattered by a £21m exceptional gain on the sale of the freehold on a processing and warehousing facility in Avonmouth. Even so, without this, operating profits still registered a useful gain from £35.6m a year earlier to £44m.
That gain would have been greater had it not been for an unexpected 24 per cent drop in underlying operating profit in North America. Most parts of the business performed well but two operating units – Case and HJ Foundation – both reported lower revenue following a reduction in construction activity, notably at the high end of residential apartments. Trading was also tough in Canada, where there was a small trading loss.
By contrast, underlying operating profit jumped by a half at the Europe, Middle East, Africa division, with solid trading in the UK, Germany, Poland and Austria – areas that account for half the division’s revenue. In the Asia Pacific region, trading remained tough, notably in Australia and Singapore, although underlying operating losses were trimmed from £9.6m to £3.8m.
There’s plenty of work in the pipeline, with the order book running at a record £1.1bn on a constant-currency basis.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to December 2017 of £106.5m and EPS of 89.1p (from £86.4m and 76.7p in 2016).
| KELLER (KLR) | ||||
| ORD PRICE: | 891p | MARKET VALUE: | £641m | |
| TOUCH: | 887-890p | 12-MONTH HIGH: | 1,001p | LOW: 643p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 613p* | NET DEBT: | 67% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 850 | 25.0 | 21.9 | 9.25 |
| 2017 | 991 | 55.2 | 57.0 | 9.7 |
| % change | +17 | +121 | +160 | +5 |
| Ex-div: | 10 Aug | |||
| Payment: | 05 Sep | |||
| *Includes intangible assets of £179m, or 248p a share | ||||
