Keller has consistently and materially grown its dividend over the 25 years since first listing on the London Stock Exchange and the Board continues to recognise the importance of returns to shareholders. Keller has strong cash generation and a robust balance sheet, which together support their ability to continue to increase the dividend sustainably through market cycles. This strong cash flow has again been demonstrated by their deleveraging in the second half of 2019. Net debt/EBITDA came in within their target range of 1.0x-1.5x at 1.2x (on a bank covenant IAS 17 basis).
The Board is committed to maintaining an efficient balance sheet and regularly reviews the group's capital resources in light of the medium-term investment requirements of the business and will return excess capital to shareholders as and when appropriate. The Board announced in December that it intends to maintain the current progressive dividend policy and in addition to the normal 5% increase to the annual ordinary dividend of recent years, the Board intends to pay a non-recurring supplementary dividend of 2.3p per share for 2019 and of 4.4p per share for 2020. This brings the 2019 full year dividend to 40.0p per share for 2019 (2018: 35.9p), a year on year increase of 11%, and to 44.0p per share for 2020. Once approved, the recommended 2019 final dividend of 27.4p per share (2018: 23.9p per share) will be paid on 26 June 2020 to shareholders on the register as at the close of business on 5 June 2020.
Other financial highlights:
Results in line with expectations following a strong second half as anticipated
Revenue up 3% to £2,300.5m, with growth in North America and EMEA, and favourable currency offset by the planned reduction of activity in APAC
Underlying operating profit of £103.8m (IFRS 16 basis) and £101.8m (IAS 17 basis), an increase of 5% (IAS 17 basis), largely driven by the return to profit in APAC
Net debt (on a bank covenant IAS 17 basis) reduced by 26% to £213.1m, equating to net debt / EBITDA of 1.2x
Good progress continues in safety; 21% improvement in their overall Accident Frequency Rate
Revised strategy announced in late 2019 will lead to a more focused and higher quality business
The year has started well and the outlook remains cautiously optimistic. Another year of continued progress is expected, supported by their robust order book in excess of £1bn