I don't think it's mischief makers, more like a thinly traded stock making big swings on volume.
Yesterday's largest trade was an after hours UT of about 19,300 shares and although listed as a sell made the highest price of the day. Something like 53p higher than the last buy price before 16:30.
Anyway, I'll hold onto my hat and continue to enjoy the ride.
"Kellers £50m benefits target is conservative, says Jefferies
Engineering company Keller (KLR) is targeting £50 million of gross benefits by 2020 but Jefferies believes this could be on the conservative side.
Analyst Anthony Codling retained his buy recommendation and target price of £13.80 after digesting a capital markets day handout from the company, which he said was worth the effort.
The group has put a lot of flesh on the bones of the previously announced targeted £50 million of annualised gross benefits by 2020, he said.
On reflection, we believe £50 million to be at the conservative end of the range of possible outcomes.
He added that Keller was a global leader in a growing market with a current addressable market worth $25 billion and the total global ground engineering market coming in at twice that.
Keller has yet to enter China, Korea, Japan, and Russia, but should it decide to its high-tech offering could be attractive set against the low-tech incumbents. There are clearly challenges between Keller and the attainment of their £50 million target, it is by no means a walk in the park, however, Keller is...aware of the pitfalls on the way.
Shares were trading 1.9%, or 15.6p, at 830.1p at the time of writing."
"Numis slashes Keller target price after profits plunge
Engineering company Keller (KLR) has issued its second profit warning in three months, as its Asia Pacific division continued to disappoint.
Numis analyst Christen Hjorth retained his hold recommendation and reduced the target price to 720p down from over £10.
Keller has issued an unscheduled trading update stating that 2016 results are now expected to be circa 15% below current market estimates, mainly due to continued underperformance in the Asia Pacific division.
We therefore reduce our 2016 earnings forecast by 15% and our 2017 forecast by 10%. The share price is currently down 24% and, based on this and our updated numbers, Keller now trades on 2016 price/earnings ratio of circa 9x and a dividend yield of circa 4%.
Although management has made positive statements regarding the outlook for the company, Hjorth said that it was understandable that investors could be sceptical of management guidance following Kellers second profit warning since August.
Now, after the bad news is out today, watch all the so-called experts put in a boot in Keller.
Here is from IC:
"Shares in Keller (KLR) slid 25 per cent after the ground engineering specialist warned that full-year results will be around 15 per cent lower than market estimates. While its core markets in the US and Europe (70 per cent of group turnover) remain robust, trading in Canada and sub-Saharan Africa has remained tough. Trading here incurred a third quarter loss, and will remain loss-making into the fourth quarter. Measures to downsize its operations here will result in exceptional costs of around £10m.
Analysts at Peel Hunt have downgraded their forecasts for the year to December 2016 from adjusted pre-tax profits of £102m and EPS of 96.1p to £86.5m and 77.8p respectively.
Having downgraded the shares from buy to hold on the back of weaker interim results, we downgrade the shares again to sell until some progress emerges on restructuring its loss making division."
If 77.8p EPS is achieved then shares are cheap IMHO.
"The Questor Column:
Keller order book should deliver:
Construction and ground work specialist Keller is enjoying steady trading in its U.S. business, but the downturn down under is hitting the Australian operations and leading to mixed results, sending shares 4.6% lower. The orders are still coming in and that left management confident of reaching targets for the full year. Keller generates the majority of its revenues from installing foundations and drilling pilings for buildings such as the Olympic Stadium, flood defences in the U.K. and major onshore oil and gas projects.
The biggest encouragement came from an acceleration of order intake, which left the order book 15% higher at the end of April when compared to a year earlier. We picked Keller as one of our tips of the year because the shares already priced in much of the bad news when they fell sharply from £11 last last year.
Now trading on around 10 times forecast earnings and offering a prospective dividend yield of 3% they look decent long-term value. Keller at 925p -45p. Questor says Buy."
Yes I agree good results, having sold a chunk of my holdings at £10, I'm now tempted to increase my weighting again.
Regarding the current share price, my guess is that the market views these results as the top of the cycle, and is expecting a downtrend, especially in emerging markets.
Due to the nature of the business (long term contracts), it can take a while for economic down turn to filter through Keller's results.
The other bad news was that the Canadian Piling business they bought has been badly impacted by the oil price (due to Oil Sands exposure I guess).
For me, now that the P/E is below 10 again, it looks like a buy and I think the share may rerate over the next few months as analysts update their forecasts.
Good results, strong order book going forward, analysts target prices mostly in the +£12 range and yet Keller share price stays subdued. And the stock is only sporadically discussed on this board. The company is in a stronger position that it was when it's share price was at £12 previously and yet the share price is down at £8.30ish. What am I missing???!
1.Forward P/E of just 8.5 to 2016, which is far lower than the sector average.
2.Forward EPS estimate for 2016 of 11.56% which i think is very conservative given that the US is recovering and I expect at least a figure of 15% or more.
3.PEG of 0.74 to 2016 which shows the company as still healthy growth.</b></i>
<b><u>Keller Group share price information</b></u>
Name Keller Group Epic KLR
Sector Construction & Materials ISIN GB0004866223
Activites Keller Group plc is an international ground engineering specialist. It is renowned for providing innovative and cost effective solutions. Keller has unrivalled coverage in Europe, North America and Australia, where its services are used in infrastructure, commercial, industrial and residential projects. Index FTSE 250
Latest share price (p) 828.75 Net gearing (%) 59.10
Market cap (£m) 586.40 Gross gearing (%) 67.20
Shares in issue (m) 71.77 Debt ratio 45.56
P/E ratio -194.52 Debt to equity ratio 0.41
Divs per share (p) 25.20 Assets / equity ratio 3.05
Dividend yield (%) 3.13 Price to book value 1.69
Dividend cover 2.01 ROCE 4.43
Earning per share (p) -4.20 EPS growth (%) -109.72
52-week high / low (p) 1,105.00 / 786.00 DPS growth (%) 5.00
<b><u>Keller Group broker views</b></u>
Date Broker Recommendation Price Old target price New target price Notes
16 Nov Investec Buy 828.75 1,420.00 1,420.00 Reiterates
16 Nov Peel Hunt Buy 828.75 1,340.00 1,340.00 Reiterates
04 Aug Numis Add 828.75 1,220.00 1,220.00 Reiterates
"The Questor Column:
Buy Keller as sell-off overdone:
It was steady as she goes at construction group Keller which said that there has been no real change to trading in the past three months and that it was still on target to hit full-year expectations.
Keller generates the majority of its revenues from installing foundations and drilling pilings for buildings such as the Olympic Stadium, flood defences in the U.K. and major onshore oil and gas projects. The companys largest market is in the U.S. and Canada, and steady growth in this region underpins the overall performance. North America is responsible for more than half of group revenues and three-quarters of profit.
Market consensus is for the strong U.S. trading to lift full-year revenue to £1.7 billion, giving pretax profits of £96.6 million, and 88p in earnings per share. Keller management are still confident they can hit those targets with six weeks left in the year. Shares in the FTSE 250 company have fallen sharply from highs of £11 reached in early June, despite little change to the trading performance. Kellers shares are trading on 9 times forecast adjusted earnings, falling to 8 times next year.
Keller at 810p +19.5p. Questor says Buy."
<b>Carillion plc Given Average Recommendation of Buy by Analysts (LON:CLLN)
Posted by Noah on Apr 6th, 2015 Updated Apr 9th, 2015</b>
Shares of Carillion plc (LON:CLLN) have received an average recommendation of Buy from the twelve ratings firms that are currently covering the company, American Banking News reports. One equities research analyst has rated the stock with a sell recommendation, three have given a hold recommendation and eight have given a buy recommendation to the company. The average 1-year target price among brokerages that have covered the stock in the last year is GBX 378.27 ($5.64).
Carillion plc (LON:CLLN) traded up 1.03% during mid-day trading on Tuesday, hitting GBX 325.00. 1,743,601 shares of the companys stock traded hands. Carillion plc has a 52-week low of GBX 294.02 and a 52-week high of GBX 386.60. The stock has a 50-day moving average of GBX 348. and a 200-day moving average of GBX 335.. The companys market cap is £1.40 billion.
Several analysts have recently commented on the stock. Analysts at HSBC reiterated a reduce rating and set a GBX 260 ($3.88) price target on shares of Carillion plc in a research note on Wednesday, April 1st. Analysts at RBC Capital lowered their price target on shares of Carillion plc from GBX 385 ($5.74) to GBX 375 ($5.59) and set an outperform rating on the stock in a research note on Friday, March 20th. Analysts at Liberum Capital reiterated a buy rating and set a GBX 440 ($6.56) price target on shares of Carillion plc in a research note on Thursday, March 19th. Finally, analysts at Berenberg Bank reiterated a hold rating and set a GBX 380 ($5.67) price target on shares of Carillion plc in a research note on Friday, March 13th.
Carillion plc is an integrated support services company. The Company has a portfolio of Public Private Partnership projects and delivers solutions. The Company operates in four business segments: Support services, Public Private Partnership projects, Middle East construction services and Construction services.
I've had a quick spin through the results, here are my comments.
EPS of 75.3p, which is slightly below Peel Hunt forecast of 77.2p. However net debt has reduced to 102.1m, significantly better than the broker forecast £121m. Which may explain the positive reaction. Cash movement for the year was a £33.9m increase.
Digging a little deeper, operating profits before exceptionals were £85m. The main exceptional item is a £54m hit for the settlement of the UK dispute announced last summer.
Markets may be relieved that this has been settled, although the final costs will not be known for another 2 years, as Keller have to carry out remedial works.
Profit after tax including exceptionals, was actually a small loss. This suggests to me that the £54m was not tax effective, which I find surprising. Even if it is not deductible from the current tax, I would expect they could recognise a deferred tax asset.
Two final thoughts on the settlement, firstly they mention that some of the cost may be mitigated by insurance, but they did not reveal how much this may cover. I hope they get asked about this by analysts. Secondly, the £54m is going to be a drag on cashflow over the next couple of years.
Moving forward, the outlook appears pretty positive. The Order book is up 7% vs Jan 2014. It seems the outlook for 2015 is growth in all regions except Australia, due to completion of the Wheatstone project. US should continue to be the outstanding performer, especially if exchange rates stay at the current level.
Ground engineering group Keller (KLR) will release its final numbers at the start of the week. Peel Hunt analysts say US trade, currently the key driver for the engineer, will be benefiting from improving markets as well as the exchange rate movement. Activity in Asia and Africa is also thought to be improving.
"The shares are trading on 10.6x price/earnings (P/E) for 2015E and c5.4x EV/EBITDA, small premiums to the long-run average; this is more than justified given the point of the cycle the business is in," says Clyde Lewis at Peel Hunt.
<b>The broker expects earnings per share (EPS) to come in at 77.2p and a 16% reduction in net debt to £121 million. It has a 'buy' reccomendation on the stock and a 1,330p target price.</b>
Is this update their view AFTER the statement yesterday about inevitable further multi-million liabilities on a UK warehouse project from 2008, now settled but added provisions to appear in next month's accounts??
"The share had a good price increase recently, but I see no reason to hold these shares anymore"
Depends what you mean by 'recently' In the last month maybe, but they have had a bad run since March, currently down 43% since their high then. I'm not holding these shares, but they are on my watch list and I feel there is more bad news to come. They should go quite bit lower yet. I wouldn't be interested above 700p.
I would not describe the statement as grim, perhaps disappointing though.
The negative points are the lower order book than this time last year (although apparently not much lower), and poor outlook in Canada and Europe (ex. UK and Poland). The outlook on Europe is not really surprising, everyone knows these economies are struggling and it should be priced into the share.
The good news is the biggest share of Keller's business (the US) is performing well, and this should allow the company to beat last year's results.
This is a cyclical business, its unlikely that all segments will perform well at the same time, but I like how Keller has good geographical diversification. I will continue to hold at these prices.
Due to current market conditions, however, margins in Canada remain under pressure. Since the half year, we have further reduced overhead costs at Keller Canada and successfully merged Geo-Foundations, a business based in Ontario acquired at the beginning of 2013, with Keller Canada's Toronto business.
Europe, Middle East and Africa (EMEA)
Conditions in our European construction markets remain challenging. Whilst there are signs of improvement in the construction markets in the UK and Poland, these are not replicated elsewhere. Overall, however, the results of our businesses in Europe remain ahead of last year, demonstrating the benefits of the Group's business improvement measures.
Franki Africa is performing in line with expectations and we see strong medium term prospects for the business. The Middle East has some good opportunities, but remains very competitive. We continue our prudent expansion in Latin America, with Brazil the key focus.
Our businesses in Asia are performing well. Trading in Singapore is on track whilst the recent acquisition of the Ansah business in Malaysia has offered a number of new opportunities. The trading environment remains challenging in India, but we have started to see some signs of improvement in both the construction market and our business.
The piling contract for the on-shore LNG processing plant at Wheatstone in Western Australia is now virtually complete. At around A$220m, the contract is Keller's largest ever and the excellent progress to date is testament to the Group's ability to harness its resources to undertake large and complex projects. The order intake in Australia has slowed significantly since July, as a result of which we have initiated a number of cost saving measures. Whilst we are now expecting a difficult first half in 2015, there remain a number of major prospects in the latter part of the year and into 2016.
Justin Atkinson, CEO of Keller, said, "We continue to expect the Group's results for the full year to be in line with current market expectations. Looking ahead, conditions in our largest market, the US, are encouraging and, across the Group, there are a number of exciting and large projects at various stages in the bidding process".
Keller will publish a pre-close full year statement on 19 December 2014 and announce its preliminary full year results on 2 March 2015.
The share had a good price increase recently, but I see no reason to hold these shares anymore.
i just backed up at 800 last week, and it then went down again to 750 but has passed en route up again - always a dizzy roller-coaster this share! Their dominant position in the worldwide ground engineering market makes them a beneficial bet in the construction field, whichever continent is booming (or busting!)
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