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Keller ups dividend payments after favourable US tax reform
Geotechnical solutions specialist Keller Group boosted pre-tax profit by 50%, as turnover grew to more than £2bn thanks to the firm's execution of more than 6,300 projects around the world.
Keller proposed a 20% increase in its full-year dividend for the twelve months ended 31 December to 34.2p, as underlying earnings per share picked up 35% to 102.2p after the December amendments to US tax laws, that were pegged to lead to a reduction in the firm's future effective tax rate, resulted in a one-off tax credit of £9.7m.
In 2016, the company paid out a dividend of 28.5p per share.
The London-based group saw its underlying operating margin decrease from 5.4% to 5.2%, principally due to lower margins in North America that offset improved profitability witnessed in Europe, the Middle East and Africa.
Underlying operating profit moved ahead 14% to £108.7m.
Keller's improved results were largely the result of two major projects, the Caspian project and Zayed City in Abu Dhabi, which between them accounted for around £100m of revenue and £30m of operating profit in 2017.
In the UK, Keller saw its order intake slow down in recent months and expects 2018 to be "a challenging year," but noted that with several major infrastructure projects, like the problematic HS2 project, set to come to fruition in the immediate future, the UK market for geotechnical work should pick up in 2019 and 2020.
Alain Michaelis, chief executive, said, "Overall Keller has had a positive year with good growth in group revenue and profits. The results were extremely strong in EMEA and solid in North America, but disappointing in APAC. Ongoing operational improvements, strengthened leadership and market recovery should lead to APAC returning to profitability in 2018. Our confidence in group fundamentals and the recent US tax changes have allowed us to significantly raise the dividend to shareholders."
Underlying earnings per share increased 35% to 102.2p, in part due to a one-off tax credit of £9.7m
As of 1200 GMT, shares had wound back 0.43% to 936.00p.