Gulf Marine Services Share Discussion Threads

[davidosh] 13/6/2022 16:17

We have a great show lined up for tonight and Gulf Marine will feature in the BASH session... Https://melloevents.com/mellomonday-13th-june/ The full programme for the evening is here... Monday 13th June 2022, 5pm – 9pm Programme 5.00 pm Mello welcome and Company presentation by Impax AM with Ian Simm 5.30 pm Gervais Williams – Inflation changes everything – How the UK stock market could come to be the asset of choice for global investors 6.00 pm Nicky Foulston CEO at RBG Holdings shares her insights into the recent RNS concerning the share register 6.30 pm Paul de Gruchy presents – Alternative Funds: more than a safe port in a storm? 6.50 pm Company presentation by Hercules Site Services 7.30 pm Vector Vest 7.45 pm Specialist insight – Steve Clapham looks at The Wire Card Fraud 8.00 pm Mello BASH You are welcome to join and as this is no doubt important for you all to watch I am happy for shareholders to join for free using the code FREE1306 but please do not share elsewhere as this is a ticketed show and there will be hundreds of investors who have paid to join.

[hpcg] 13/6/2022 11:53

GMS doesn't provide drilling rigs it supplies support rigs. Work is tied to maintenance as much as anything.

[catsick] 13/6/2022 11:23

Pareto put out research which has good data on day rates for various rig types, all pretty bullish despite the market meltdown

[nchanning] 09/6/2022 15:24

Totally agree and it does take a while for higher oil prices to feed into more drilling activity . Do you have another source to track the day rates or you are just using info from RNS's ?

[catsick] 08/6/2022 13:56

There is a lot of upside here , the day rates last year were 25,700 a small increase on the previous year but already now 10% higher and heading up, they were 60,000 in the last drilling boom in 2015 so have a lot of upside and it all drops straight to the bottom line, my calculation is that these are worth 30p if day rates can get back to 35k which should be easy to reach in 2 years with oil companies flush with cash and heavily backlogged on maintenance alone...

[melloteam] 22/5/2022 13:32

Mello2022, the popular three-day Investor event takes place on 24TH-26TH MAY at the Clayton Hotel & Conference Centre, Chiswick, W4. The breakdown of the three days is as follows: Tuesday 24th May, 9am - 6pm - Mello Investment Trusts and Funds (WE ARE GIVING AWAY 20 FREE TICKETS TO THE TRUST AND FUNDS EVENT - THE FREE CODE IS FIRST20TF) Wednesday 25th & Thursday 26th May, 9am - 6pm - Smaller Growth and Mid-Cap Companies (Tickets for 1 day are £115 and tickets for 2 days are £189. To get 50% off, use code MMTADVFN50). Just to let shareholders and prospective investors know that GMS will be among the companies discussed on the BASH (Buy, Avoid, Sell, Hold) panel on Wednesday. There will also be keynote speakers such as Lord John Lee, Leon Boros, Andy Brough, Rosemary Banyard, Clarke Carlisle and Gervais Williams. For more information, please visit the event webpage: Https://melloevents.com/mello2022/

[loganair] 21/5/2022 20:08

I've been listening to a pod cast by Barry Norris of Argonaut Capital who said the best place to be for the next 10 years is oil services and oil refiners as adding more wind in useless and adds no economic value as weather is the constraining factor. When the wind blows, wind turbines that have to be replaced every 10 or so years, can produce 100% of our energy needs, however when the wind doesn't blow produces virtually none of our energy needs.

[hpcg] 13/5/2022 12:49

It shouldn't be tracking crude, it should be tracking the medium term undershoot in supply, which inevitably leads to oil field and wind field activity. Oil is where it is because Chinese demand is down 6% on its covid response, but one presumes that is a short term dip. Sure there will be an economic slow down too that hits demand but all that is doing is providing balance.

[blusteradjuster] 13/5/2022 11:17

With the share price moving in a channel the centre of which has risen 50% in 6 months, it could be argued that procrastination in that regard isn't a bad thing. Especially given the similar shape of the crude oil chart. EDIT: Tracking the price of crude (if that's what it's doing) is, I suppose, not unreasonable. However, it doesn't factor in any bonus of de-risking the enterprise via leverage reduction.

[hpcg] 13/5/2022 10:38

jailbird - they are contractually obliged to either raise $50m or issue the warrants. As the current market cap is just shy of $100m a 1 for 2 isn't quite enough, and there is always a question for small companies as to whether private investors will stump up for a rights issue. I prefer the rights because I'm just giving money to myself, but on the other hand I can cheaply buy in the dilution from the warrants. An RI is costly and even more so presuming it would be underwritten. Issuing the warrants now would ease uncertainty, which apparently is what investors hate, even though looking through it is a core part of the job. So I can see why it is a finely balanced choice for the board.

[blusteradjuster] 13/5/2022 10:17

Thanks jailbird and thanks to hpcg, it was he who convinced me to finally take a position in black gold. I'll deal with my internal ethics at a later date =O) EDIT: with respect to financing - it makes sense to back a winner. See previous ref to virtuous circles..

[jailbird] 13/5/2022 10:15

thanks Bluster

[blusteradjuster] 13/5/2022 10:14

The equity portion of EV would continue to rise as debt falls. Also, any risk-related discount on that EV falls away as the leverage ratio falls. It's a virtuous circle. -- Interest on bank borrowings reduced by 37% to US$ 17.5 million (2020: US$ 27.6 million) following refinancing of the Group's debt facility and reduction in LIBOR with both margin and average LIBOR decreasing to 3.0% and 0.2% (2020: 5.0% and 1.0%). -- Net bank debt [3] reduced to US$ 371.2 million (2020: US$ 406.3 million). Net leverage ratio [4] reduced to 5.8 times (2020: 8.0 times). Group anticipates net leverage ratio to be below 4.0 times by the end of 2022.

[jailbird] 13/5/2022 10:11

i think there will a fund raise later , but may require less the originally forecast

[hpcg] 13/5/2022 09:56

"Group anticipates net leverage ratio to be below 4.0 times by the end of 2022." Ideal to be paying down debt as interest rates rise. At 88% secured utilisation they'll have pretty solid forecast for anything but an extreme event. Not much room for upside but we've already been owners for just over a third of this year. Looking ahead a year with the reported firmer rates 2023 should be much better as low rate contracts roll off. It would be nice to have a broker forecast so the PI focused apps can have some numbers for screeners. Modelling should be pretty straight forward for the house broker. I think I would probably favour the warrant option and do it now. The alternative course of action would be the equity raise as a rights issue at the end of the autumn when there is seasonal equity market strength and a good view of 2023 to promote with. I bet that would cost a lot more though.

[catsick] 13/5/2022 08:08

Interesting that they seem to be happy not to raise the finance but to issue the warrants which are not a huge deal an fairly at the money, much better than a larger discounted placement....

[catsick] 13/5/2022 08:01

Results out all look decent , puts them on a pe of 2 and heading to a pe of 1

[baddeal] 11/5/2022 17:14

Yep it's all about ent value moving from debt to equity value so should have full year results soon which should point to improved cash generation and reduction in leverage.

[loglorry1] 08/5/2022 11:46

GMS will very likely extend their finance with banks without requiring a further equity raise or warrant exercise. Rig rates have risen and utilisation is up which has facilitated this. Cash generation is very strong and as debt is reduced value will flow to the equity and it will continue to rerate. 15p should be achieved soon.

[owenski] 08/5/2022 08:53

Are GMS doing another fund raise later this year?

[napoleon 14th] 07/5/2022 23:58

Hey! The less my shares move in this market, the happier I am! At least this is in oil, right place right time, and has recovery potential...

[blueball] 05/5/2022 15:43

Taking its time to move.

[pauliewonder] 29/4/2022 09:14

Yes, free cashflow should significantly dent the debt pile and massively de-risk GMS. Once we get to that point the valuation will look hideous. Furthermore, they may start returning money to shareholders

[catsick] 29/4/2022 09:04

And all at ever increasing rates while reducing loan balance