Keller performance ‘ahead of expectations’
Keller has revealed its performance up to the middle of June this year is ahead of expectations.
In a trading update released this morning, the UK-headquartered international geotechnical specialist said the impact of COVID-19 since the start of April had been “less significant on the group overall than first anticipated”.
Despite implementing cost-cutting measures, the company has decided it will pay a dividend for 2019 to its shareholders, having initially postponed a decision on the payout in April. It has reduced the dividend from 27.4p per share to 23.3p, which will see the company pay out almost £16.8m.
In North America, which is Keller’s largest market, the vast majority of its sites remained open, while the impact in Europe and the Middle East has been more significant. In the Asia-Pacific region, the picture was mixed with India and Singapore enforcing countrywide lockdowns while work in Australia has remained operational, it said.
Keller’s order book held steady at around £1bn, it claimed, but warned the outlook for the rest of the year was uncertain. An economic slowdown in the wake of the pandemic could hit construction markets and its order book, it said. In response to the pandemic, the company said it had introduced “enhanced” safety measures. It has also cancelled discretionary projects, reduced capital expenditure and cut operating costs to preserve cash.
At the end of May, the company had net debt of £195m, which was down from the £213m reported at the end of December. The company has the option to access a further £293m through its undrawn credit facilities.
As an extra precaution Keller has secured approval to issue up to £300m of debt to the Bank of England through its COVID Corporate Financing Facility. The company emphasised that it had not made use of the facility yet and does not expect that it will need to. It added that it would only expect to use if there was “an unexpected and significant deterioration in future market conditions and client payment behaviours”.