Shares in Keller (KLR) surged after the group reported that its Asia Pacific wing had returned to profit, but analyst attention centres on ongoing changes to its business model. The geotechnical specialist began a comprehensive restructuring in 2019 and said in December that it would exit from the South American market, which chief executive Michael Speakman believes will be largely achieved by the half year.
Margins in North America, however, were flat, which Mr. Speakman attributed to less emergency work and higher-margin data centre work, as well as a slow start to the year in 2019. Sales in Europe, Middle East & Africa nudged up 2 per cent due to a drag from the completion of two large projects in the Caspian and Middle East. But the standout was a profitable Asia Pacific division, as it exited the ASEAN heavy foundations business and closed its Waterway operations. Analysts at Peel Hunt noted that the turnaround in the region was faster than anticipated and maintains that results are likely to improve as the group consolidates its operations.
Keller has recently changed management at the top, having announced in September that Alain Michaelis would step down as chief executive. Mr Speakman was appointed in December last year.
House broker Numis forecasts EPS of 85p and pre-tax profits of £85.5m in 2020, rising to 89p and £89.5m in the following year.
| KELLER (KLR) | ||||
| ORD PRICE: | 760p | MARKET VALUE: | £ 548m | |
| TOUCH: | 760-765p | 12-MONTH HIGH: | 898p | LOW: 506p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 544p | NET DEBT: | 73%* | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2018 | 2.22 | 8.4 | -20.6 | 35.9 |
| 2019 | 2.30 | 51.6 | 81.3 | 40.0 |
| % change | +4 | +514 | +495 | +11 |
| Ex-div: | 04 Jun | |||
| Payment: | 26 Jun | |||
| *Includes lease liabilities of £76.7m. NB: 2019 dividend includes a non-recurring supplementary dividend of 2.3p a share (4.4p per share earmarked for 2020). | ||||
