Keller FY underlying profits fall as margin contraction offsets revenue growth

Geotechnical solutions business Keller Group said on Tuesday that underlying profits had fallen in 2021 as tighter margins offset revenue growth throughout the period.

Keller stated underlying operating profits were down 16% at £92.8m and underlying pre-tax profits were 13% weaker at £83.9m, with a 110 basis point drop in its underlying operating profit margin to 4.2% negated an 8% increase in full-year revenues to £2.22bn.

Underlying diluted earnings per share also slipped, down 8% at 88.4p, but Keller still opted to declare a 35.9p full-year dividend per share, the same as it did in 2020.

The London-listed firm said it ended the period with a record order book of £1.3bn, leaving it well positioned for future growth.

Chief executive Michael Speakman said: "Keller proved its resilience in 2021, overcoming the many challenges posed by Covid-19 whilst further rationalising the business portfolio, completing a number of bolt-on acquisitions, delivering another strong set of results which are ahead of market expectations, and maintaining the dividend.

"Whilst we are mindful of the recently increased geopolitical and macroeconomic uncertainty and inflationary pressures, our expectations for 2022 are unchanged. Our £1.3bn record order book gives us good visibility in the near term. In addition, our strong balance sheet, a gradually improving market environment together with the positive momentum in the business, gives us confidence that 2022 will be a year of growth, with our usual second half bias."

As of 1005 GMT, Keller shares were up 3.26% at 729.0p.