Keller’s (KLR) underlying operating profit climbed by a quarter in the first half, led by strong trading in North America and a return to profitability in the Asia Pacific region. The geotechnical specialist contractor was, however, affected by coronavirus, leading its top line to falter.
Its North American operations proved the most resilient, where revenue nudged up 2 per cent at constant currency. Indeed, management noted that the impact of coronavirus in the first half was less pronounced than first anticipated, as states implemented varying levels of restrictions.
The group hacked away at net debt in the period, cutting it by more than half. Its proportion of net debt to adjusted cash profits now sits at a multiple of 0.9, just beating its target range of 1.0 to 1.5.
Keller continued its withdrawal from the South American market, having disposed of its Brazilian business in the period. Its exit from the smaller operation in Chile has been delayed due to coronavirus, although chief executive Michael Speakman expects that it will complete by the end of the year.
The company has not committed to a half-year dividend, noting that payments will be considered later in the year.
Broker Peel Hunt forecasts adjusted pre-tax profits of £54.8m and EPS of 56.9p in the full year in 2020, rising to £85.1m and 83.4p in 2021.
| KELLER (KLR) | ||||
| ORD PRICE: | 574p | MARKET VALUE: | £414m | |
| TOUCH: | 573-579p | 12-MONTH HIGH: | 876p | LOW: 446p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 600p | NET DEBT: | 53% | |
| Half-year to 28 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 1.09 | 21.7 | 4.80 | 12.60 |
| 2020 | 1.04 | 20.8 | 13.9 | nil |
| % change | -5 | -4 | +190 | – |
| Ex-div: | na | |||
| Payment: | na |
