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Share Price: 1,358.00

Bid: 1,356.00

Ask: 1,362.00

Change: -16.00 (-1.16%)

Spread: 6.00 (0.442%)

Open: 1,362.00

High: 1,370.00

Low: 1,330.00

Prev. Close: 1,374.00

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Keller profits take a hit from restructuring costs, APAC difficulties

Mon, 04th Mar 2019 09:56

(Sharecast News) - Keller posted a drop in full-year underlying profit on Monday due to restructuring costs, difficulties in its Asia Pacific division, and the end of two large EMEA projects.In the year to the end of December 2018, underlying pre-tax profit fell 18% to Â£80.5m while revenue rose 7% to Â£2.22bn. Revenue saw a 5% benefit from the acquisition of US geotechnical contractor Moretrench last year and a 6% benefit from organic growth.Underlying operating profit declined by 11% to Â£96.m, underlying diluted earnings per share fell 22% to 79.1p and the total dividend per share was lifted by 5% to 35.9p.The company said its Asia Pacific division was severely impacted by the previously announced challenges in its ASEAN and Waterway businesses.Keller incurred an exceptional group restructuring charge of Â£61.4m, in line with its previous guidance, as it took actions to address underperforming units. As a result, the statutory loss for the period was Â£13.8m versus a profit of Â£87.5m in 2017.Net debt was a bright spot in the results, coming at Â£286.2m and beating expectations by around Â£17m thanks to tighter working capital control and asset sales.Chief executive officer Alain Michaelis said: "2018 results were deeply unsatisfactory with an 11% profit decline, as a result of which we have acted firmly in restructuring four of our business units. In addition we have continued to build the capability of the group, with the successful acquisition and integration of Moretrench in the US a notable highlight."The internal improvement measures, coupled with a stable market outlook, a healthy order book and Keller's leading position in the industry, give us confidence in the outlook for 2019."At 0950 GMT, the shares were up 13.3% to 628.85pPeel Hunt said: "While 2019 is inevitably set to be mixed in terms of end markets, our overall forecasts are unlikely to change. The group has continued to make progress on harmonising operations, sharing best practices as well as centralising some functions."2019 we should see an improvement in the US results (slightly better mix, less one-off cost impacts and more integration benefits from the Moretrench acquisition). EMEA, which had a decent 2018, will probably see a slight drop in profits as the big contracts fully drop out. APAC is expected to move back into the black in H2 as the operational changes take effect and loss-making contracts complete. The group has also pointed to a tighter focus on debt, which should see leverage drop into a 1-1.5x band for the end of 2019."The shares have risen 12% year-to-date after a 49% drop in 2018. On current forecasts they are trading on a price-to-earnings of circa 6x with an EV/EBITDA of 3.5x and a free cash flow yield of circa 15%. While concerns remain, we think these ratings are too low and see the shares bouncing a bit today on the back of these more reassuring figures."

More News

29 Mar 2018 10:30

Keller Buys Geotechnical Contracting Firm Moretrench For USD90 Million

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14 Dec 2016 14:31

Keller Group appoints Venu Raju as executive director

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22 Nov 2016 07:57

Keller wins £40m South African contract

(ShareCast News) - FTSE 250 geotechnical contractor Keller has been awarded a ground improvement contract in Durban, South Africa, valued at more than £40m. Keller will design and construct the complete ground improvement solution for over 350,000 square metres of warehouses and ancillary offices as

31 Oct 2016 16:55

Britain's FTSE slips, though posts fifth straight month of gains

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31 Oct 2016 10:28

Britain's FTSE slips, though on track for fifth straight month of gains

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets) * FTSE 100 down 0.4 pct * Set for fifth month of straight gains * WPP jumps after update By Kit Rees LONDON, Oct 31 (

25 Oct 2016 15:12

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21 Oct 2016 09:35

Rise in British American Tobacco shares supports FTSE 100

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20 Oct 2016 16:05

LONDON MARKET CLOSE: Draghi Leaves Door Open To December QE Extension

20 Oct 2016 07:49

Keller tanks as it warns on profit due to APAC weakness

(ShareCast News) - Keller shares tanked on Thursday after the FTSE 250 ground engineering company cautioned that its full-year 2016 underlying results will be around 15% below current market expectations, mainly due to underperformance in the Asia Pacific division. In a trading update for the third

20 Oct 2016 07:23

LONDON BRIEFING: NCC, Keller And Senior Drop After Trading Updates

20 Oct 2016 07:22

European shares slip as profit warnings weigh on market

LONDON, Oct 20 (Reuters) - European shares slipped back on Thursday, as a clutch of profit warnings from companies throughout the region took their toll on the market. The pan-European STOXX 600 index was down by 0.1 percent, and is down by around 6 percent since the start of 2016. Sh

20 Oct 2016 06:28

Ground engineer Keller says will be hit by tough trading in Asia

LONDON, Oct 20 (Reuters) - British ground engineer Keller warned on profits on Thursday, saying very difficult trading conditions were persisting in Asia and operating losses in the region were mounting. The group said as a result its outcome for 2016 would be about 15 percent short of mar

11 Oct 2016 07:31

Keller wins contract in Port Said, Egypt

(ShareCast News) - Keller Group has been awarded a "major" contract in Port Said, Egypt, valued at around £60m. The FTSE 250 ground engineering specialist said the contract for ground improvement works forms part of the development by the Egyptian Government of the eastern shore of Port Said, along

11 Oct 2016 06:36

Keller Inks GBP60 Million Ground Improvement Contract In Egypt

23 Sep 2016 15:06

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