Keller Group (KLR)

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A geotechnical solutions specialist which connects global resources and local knowledge, and tackles the engineering challenges in over 40 countries.

22-Nov-2018 – 622p – £448.2m – PER 6.26

Trading Update – H2 continues in-line with the Board’s expectations – Re-iterates in 2019 contribution from major projects will be lower than this year.

First coverage for me and I have to say I am not exactly inspired – I will go Neutral and keep an eye out for actual results and perhaps some revised forecasts.

4-Mar-2019 – 555p – £400m – PER 5.9

Results For The 12 Months To End December 2018 – In-line with revised expectations (an 11% decline in Profit). 4 Business units being restructured, capacity added – There’s a healthy Order book and the outlook for 2019 is confident. There’s confidence in the Dividend too, it’s up 5%, it’s well covered and there’s a statement confirming intention to continue.

I have not looked into this in much detail. Growth is poor but the reasonably well covered Yield of 6%+ is not. The main issue is the Debt, it’s HUGE. At present I cannot possibly buy this share.

29-Jul-2019 – 623p – £472m – PER 6.8

Interim Results For The 6 Months To End June 2019 – “H1 in-line with expectations and full year guidance re-iterated”.

Looks reasonably valued based on the growth and yield (6% or so), if you can look past at least some of that mountain of Debt.

20-Sep-2019 – 662p – £477m – PER 7

Trading Update – Reiterates FY Revenue to be broadly flat compared to last year, improved margins should improve Profit, dependent on usual timing of large contracts.

Still remains unattractive to me especially when taking into account that Debt level and the “dependent on usual timing of large contracts”.

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