3rd Mar 2014 08:41
LONDON (Alliance News) - Keller Group PLC Monday reported a 70% increase in profit for the recent full year, boosted by acquisitions and improved operating margins across its four geographical divisions.
The FTSE 250 engineering contractor posted pretax profit of GBP74.1 million for 2013, up from GBP43.5 million, as revenue rose 1.0% to a record GBP1.45 billion from GBP1.32 billion a year earlier. Operating margin widened to 5.4% across the group from 3.7% in 2012.
As a result, the company increased its final dividend to 16.0 pence per share from 15.2 pence, bringing a total dividend of 24.0 pence from 22.8 pence in 2012.
Keller said its biggest division, North America, performed particularly strongly throughout the year with revenue rising to GBP699.4 million, from GBP581.9 million, driven by Hayward Baker, its construction engineering solutions business which won contracts worth GBP34 million.
The firm also during 2013 acquired Geo-Foundations Contractors, a business based in Toronto, Canada for GBP5.7 million. Keller said its presence in Canada has increased as a result of the deal.
Overall operating margin for the North America division, which represents almost 50% of group revenue, increased to 7.4% from 5.5%.
In Europe, Middle East and Africa, revenue rose to GBP399.2 million from GBP358.6 million, as operating margin rose to 1.7% from 0.6%. Keller said the division was helped by good contributions from a number of large projects several of which have recently completed or neared completion.
This include the GBP30million contract to construct ramps and a tunnel boring machine in Gdansk, Poland.
During the period the company acquired Franki Africa, a large ground engineering business in South Africa in a deal worth GBP31 million.
Keller said its believes the deal will accelerate its entry into selected Sub-Saharan construction markets, where around half of Franki Africa's revenue has been earned in recent years and where significant growth is expected over the medium to long term, fuelled by major infrastructure and resources-related projects.
The Asia and Australia businesses did not fare as well, with both reporting a fall in revenue but improved operating margind. Keller blamed the fall in Asia on the absence of a major project in Malaysia to replace its GBP30 million Vale project.
In 2012 the group was awarded a contract by Brazilian mining company Vale SA to build the foundations for a major iron-ore distribution facility in Lumut, Malaysia.
On the other hand, Keller said the resources sector of Australia's construction market has been less buoyant than in recent years, and the commercial and infrastructure segments remains subdued.
Financially, the firm said net finance costs before expectational items decreased to GBP3.7 million from GBP4.8 million, reflecting higher non-cash income from financial assets.
Looking ahead, Keller said it expects to see a continuation of the gradual improvement in certain of our markets, notably in the US. However, most of its European markets are expected to remain subdued and it anticipates that the current uncertain market conditions in Australia will continue for some time.
However, Keller said contract awards remain at a "healthy level" with the value of the like-for-like order book at the end of January 2014, for work to be executed over the following 12 months, 6% higher than in the corresponding period.
In early trading Monday, Keller shares were off 1.5% at 1,251.48 pence.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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