21.12.2007 05:00 Real Estate
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Shares in the ground engineering specialist had fallen by about 40 per cent since the middle of October, but they rose 20?p to 661p after Thursday's announcement.
"It really is business as usual," said Justin Atkinson, chief executive.
"We believe our strong order book across all geographic regions, our robust business model and broad geographic spread should reassure the market."
He added that 2007 would be "another excellent year" and that the group was well placed for 2008.
Keller has built up forward orders for the next six months compared with about five months last year.
The company generates about half its profits in the US. About 20 per cent of that is from the residential sector. The majority of its work in piling, ground improvement and post-tension concrete is for the commercial and industrial sectors.
David Philips, analyst at Altium Securities, said infrastructure investment would account for about 40 per cent of its US business.
Mr Atkinson said a one-off charge associated with the group's withdrawal from Makers, a concrete repair and social housing business, would be less that ?10m, as indicated at its interim results in August.
* After the precipitous fall since October, Thursday's upgrade was welcome. The building foundation specialist is, so it claims, not facing a remorselessly bleak future after all. Keller achieves more than twice the operating margin of its peers at about 10 per cent, but is currently trading on a discount with a price/earnings ratio of about 7 times estimated 2008 earnings, compared with about 9 times for the sector. Although Keller generates up to a fifth of its US business from US housing, its order book is still growing both there and the rest of the world. In six months, if the construction cycle has started to turn, trading may get much tougher but unlike residential housing, commercial and infrastructure work would slow rather than stop suddenly. The sell-off appears overdone.
