Ground engineering specialist Keller (KLR) served up another mixed performance, with solid gains in the Middle East countered by weakness in the US. And while turnover reached a record high, after-tax earnings were boosted by a one-off tax credit without which EPS would have been broadly flat at 88.4p.
Trading in Europe, Middle East and Africa (EMEA) saw revenue up by a quarter and underlying operating profits up three-quarters. The gains were largely due to two large projects that accounted for over half of underlying profits. However, these were substantially completed by the year-end, and profits for the current year are expected to fall back.
Around half the group’s revenue is generated in North America, and profits and margins suffered because of disruption caused by freak weather. That said, a certain amount of catch-up means that the order book is up 5 per cent from a year earlier.
The Asia Pacific region was a little disappointing because even though revenue was up by 25 per cent, operating losses were only slightly improved. Adverse ground conditions and a contractual dispute disrupted two major contracts, but management changes and a 20 per cent jump in the order book are expected to reverse the trend in 2018.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to December 2018 of £95.2m and EPS of 93p (from £98.7m and 102p in 2017).
| KELLER (KLR) | ||||
| ORD PRICE: | 940p | MARKET VALUE: | £677m | |
| TOUCH: | 939-941p | 12-MONTH HIGH: | 1,072p | LOW: 790p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 651p* | NET DEBT: | 49% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.44 | 52.0 | 43.2 | 24 |
| 2014 | 1.60 | 28.2 | -4.2 | 25.2 |
| 2015 | 1.56 | 56.3 | 35.5 | 27.1 |
| 2016 | 1.78 | 73.9 | 65.7 | 28.5 |
| 2017 | 2.07 | 111 | 121 | 34.2 |
| % change | +16 | +50 | +84 | +20 |
| Ex-div: | 31 May | |||
| Payment: | 22 Jun | |||
| *Includes intangible assets of £171m, or 237p a share | ||||
