Keller Group Plc shares rally as trading beats expectations and dividend will be

It will go ahead with 2019’s final dividend, though the 2020 payments will remain under review until later this year.

Keller Group Plc (LON:KLR) has decided to retain its 27.4p per share final dividend following a review.

It means the full year dividend payments will total 35.9p.

In London, Keller shares rose by 67p or 10.6% to change hands at 697p each.

The geotechnical contractor, in a statement, said: “The board fully recognises the importance of dividends to shareholders and has now decided that it would be both prudent and appropriate to maintain the full year dividend at the prior year’s level, representing a full year total 2019 dividend of 35.9p.

“This reflects the continued financial strength of the group, its significant liquidity position, trading during the first half of the year and the longer-term confidence in the performance of the business.”

Keller, meanwhile, is holding off guidance for the 2020 interim dividend and said that it will review the dividend later in the year.

The dividend decision comes as Keller said its first quarter trading as better than internal expectations and materially better than the prior year. It added that trading in the second quarter to date has been resilient.

The impact of coronavirus (COVID-19) is described as being less significant on the group overall than first anticipated.

Keller gave an update on its guidance, stating: “Whilst the performance for the year to date has been ahead of our expectations and the current order book remains steady at c.£1bn, we are cognisant of the potential impact of an economic slowdown on construction markets as well as the volume and quality of our order book as we look ahead to the important fourth quarter and beyond.

“It therefore remains too early to provide earnings guidance for the current financial year. We will continue to monitor external events, manage the situation closely and update the market as appropriate.”

Stockbroker Peel Hunt, meanwhile, highlighted that the update is “a bit more positive than expected” so it is leaving its forecasts unchanged for now.

Analyst Clyde Lewis, in a note, said: “The North American operations have seen some lockdown impact but overall most sites have remained opened.

“EMEA has seen a lot of variation by country with the UK typically the most affected and in APAC, Australia has continued working throughout while Singapore and India have been hit.

“While the group has seen some decent contract wins in the period there has been an increase in contract deferrals as well as a bit of pricing competition. Management remains most conscious of the level of tendering activity.”

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