LSE:KLR

Stock Analysis Report

Executive Summary

Keller Group plc provides geotechnical solutions in North America, Europe, the Middle East, Africa, and the Asia-Pacific.

Rewards

Trading at 44.8% below its fair value

Earnings are forecast to grow 48.12% per year

Pays a reliable dividend of 4.53%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 4.53% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Average dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Keller Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KLR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.2%

KLR

0.7%

GB Construction

-1.1%

GB Market


1 Year Return

60.7%

KLR

-16.7%

GB Construction

11.8%

GB Market

Return vs Industry: KLR exceeded the UK Construction industry which returned -15.6% over the past year.

Return vs Market: KLR exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

KLRIndustryMarket
7 Day6.2%0.7%-1.1%
30 Day17.0%-12.6%-0.8%
90 Day64.4%3.9%5.2%
1 Year69.5%60.7%-1.9%-16.7%17.7%11.8%
3 Year19.1%5.5%-19.2%-40.1%21.3%5.8%
5 Year17.0%-1.9%-2.6%-37.8%40.0%7.7%

Price Volatility Vs. Market

How volatile is Keller Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Keller Group undervalued compared to its fair value and its price relative to the market?

40.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KLR (£7.93) is trading below our estimate of fair value (£14.37)

Significantly Below Fair Value: KLR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KLR is unprofitable, so we can't compare its PE Ratio to the Construction industry average.

PE vs Market: KLR is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate KLR's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: KLR is overvalued based on its PB Ratio (1.5x) compared to the GB Construction industry average (1.5x).


Next Steps

Future Growth

How is Keller Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

24.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KLR is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: KLR is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: KLR's is expected to become profitable in the next 3 years.

Revenue vs Market: KLR's revenue (1.9% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: KLR's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KLR's Return on Equity is forecast to be low in 3 years time (13.3%).


Next Steps

Past Performance

How has Keller Group performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KLR is currently unprofitable.

Growing Profit Margin: KLR is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: KLR is unprofitable, but has reduced losses over the past 5 years at a rate of 4.9% per year.

Accelerating Growth: Unable to compare KLR's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: KLR is unprofitable, making it difficult to compare its past year earnings growth to the Construction industry (-13.7%).


Return on Equity

High ROE: KLR has a negative Return on Equity (-8.14%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Keller Group's financial position?


Financial Position Analysis

Short Term Liabilities: KLR's short term assets (£841.4M) exceed its short term liabilities (£543.2M).

Long Term Liabilities: KLR's short term assets (£841.4M) exceed its long term liabilities (£549.9M).


Debt to Equity History and Analysis

Debt Level: KLR's debt to equity ratio (91.9%) is considered high.

Reducing Debt: KLR's debt to equity ratio has increased from 60.4% to 91.9% over the past 5 years.

Debt Coverage: KLR's debt is well covered by operating cash flow (36.8%).

Interest Coverage: KLR is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: KLR has a high level of physical assets or inventory.

Debt Coverage by Assets: KLR's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

What is Keller Group's current dividend yield, its reliability and sustainability?

4.10%

Current Dividend Yield


Dividend Yield vs Market

company4.1%marketbottom25%1.8%markettop25%5.0%industryaverage4.2%forecastin3Years4.9%

Current dividend yield vs market & industry

Notable Dividend: KLR's dividend (4.53%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: KLR's dividend (4.53%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: KLR's dividends per share have been stable in the past 10 years.

Growing Dividend: KLR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: KLR is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: KLR's dividends in 3 years are forecast to be well covered by earnings (42.2% payout ratio).


Next Steps

Management

What is the CEO of Keller Group's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Mike Speakman (55yo)

0.3yrs

Tenure

UK£448,800

Compensation

Mr. Michael J. Speakman, also known as Mike, is Chief Executive Officer at Keller Group plc since December 12, 2019. Mr. Speakman had been Interim Chief Executive Officer at Keller Group plc since October  ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD582.85K) is below average for companies of similar size in the UK market ($USD1.13M).

Compensation vs Earnings: Insufficient data to compare Mike's compensation with company performance.


Management Age and Tenure

1.6yrs

Average Tenure

51.5yo

Average Age

Experienced Management: KLR's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

3.3yrs

Average Tenure

58yo

Average Age

Experienced Board: KLR's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£114,00030 Sep 19
Venu Raju
EntityIndividual
Role
Member of the Board of Directors
Engineering & Operations Director and Executive Director
Shares20,000
Max PriceUK£5.70
BuyUK£102,42030 Sep 19
Peter Hill
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman of the Board
Shares18,000
Max PriceUK£5.69
BuyUK£114,00027 Sep 19
Michael Speakman
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares20,000
Max PriceUK£5.70

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • James W. Hind (54yo)

    President of North America & Executive Director

    • Tenure: 16.5yrs
    • Compensation: UK£565.00k
  • Mike Speakman (55yo)

    CEO & Director

    • Tenure: 0.3yrs
    • Compensation: UK£448.80k
  • Venu Raju (58yo)

    Engineering & Operations Director and Executive Director

    • Tenure: 3yrs
    • Compensation: UK£443.00k
  • Graeme Cook (49yo)

    Human Resources Director

    • Tenure: 3yrs
  • Kerry Porritt (48yo)

    Group Company Secretary & Legal Advisor

    • Thorsten Holl (49yo)

      President of Europe

      • Tenure: 4.2yrs
    • Peter Wyton

      President of APAC

      • Tenure: 1.8yrs
    • Katie Deeble

      Head of Communication

      • Caroline Crampton

        Interim Head of Investor Relations

        • Tenure: 1yrs
      • Mark Hooper

        Group Financial Controller & Interim CFO

        • Tenure: 0.3yrs

      Board Members

      • Eva Lindqvist (61yo)

        Independent Non-Executive Director

        • Tenure: 2.6yrs
      • Nancy R. Moore (70yo)

        Independent Non-Executive Director

        • Tenure: 5.6yrs
      • Peter Hill

        Non-Executive Chairman of the Board

        • Tenure: 3.5yrs
      • Paul Withers (62yo)

        Director

        • Tenure: 7.1yrs
      • James W. Hind (54yo)

        President of North America & Executive Director

        • Tenure: 16.5yrs
        • Compensation: UK£565.00k
      • Mike Speakman (55yo)

        CEO & Director

        • Tenure: 0.3yrs
        • Compensation: UK£448.80k
      • Paula Bell (52yo)

        Independent Non-Executive Director

        • Tenure: 1.3yrs
      • Venu Raju (58yo)

        Engineering & Operations Director and Executive Director

        • Tenure: 3yrs
        • Compensation: UK£443.00k
      • Kate Rock

        Senior Independent Director

        Company Information

        Keller Group plc's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Keller Group plc
        • Ticker: KLR
        • Exchange: LSE
        • Founded: 1860
        • Industry: Construction and Engineering
        • Sector: Capital Goods
        • Market Cap: UK£631.336m
        • Shares outstanding: 72.07m
        • Website: https://www.keller.com

        Number of Employees


        Location

        • Keller Group plc
        • 1 Sheldon Square
        • 5th Floor
        • London
        • Greater London
        • W2 6TT
        • United Kingdom

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        KLRG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 1994
        KLRLSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 1994
        01KDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 1994
        KLRLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 1994

        Biography

        Keller Group plc provides geotechnical solutions in North America, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers ground improvement services to prepare the ground for new construction projects and to reduce the risk of liquefaction in the areas of seismic activity; and grouting services, which enhance target areas in the ground, and controls ground water flow through rocks and soils by reducing their permeability. It also provides heavy foundation solutions, including bored, CFA, driven piling, marine, and near shore structures, as well as underpin solutions; and earth retention systems that are used to solve a range of geotechnical solutions comprising slope stabilization and excavation support. In addition, the company offers post-tension cable systems, which are used to reinforce concrete foundations and structural spans; and instrumentation and monitoring solutions for various applications. It provides its services to the construction sector in infrastructure, industrial, commercial residential, and environmental projects. The company was founded in 1860 and is headquartered in London, United Kingdom. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/24 20:43
        End of Day Share Price2020/01/24 00:00
        Earnings2019/06/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.