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Paul’s Section:
Gulf Marine Services (GMS) - Paul holds
15.4p (pre-market) £164m - Debt Refinance Completed - Paul - GREEN
Gulf Marine Services (GMS), a leading provider of self-propelled, self-elevating support vessels for the offshore energy sector…
There wasn’t really any doubt over this, but it reassures me that the refinancing is now completed -
“...is pleased to announce that it successfully completed the refinance of its debt, on December 30th 2024, as detailed in the Company's previous announcement on August 1st, 2024.
Alex Aclimandos, GMS Chief Financial Officer, commented:
"As described earlier, we are very happy to have secured this deal as it lowers our costs of borrowing and gives us more flexibility on capital allocation, reflecting the trust of the lenders."
Mansour Al Alami, GMS Executive Chairman, added:
"This new deal will allow us to proceed with our deleveraging plans and to continue to move value from lenders to shareholders."
Paul’s opinion - that last sentence sums up the investment case. As each month goes by, GMS is paying down its debt from prodigious cashflows, so all shareholders need to do is wait, and the company’s finances get stronger.
This has not been fully reflected in the share price yet, because there’s a seemingly endless flow of selling from the Seafox overhang.
Other bearish points might be that the low oil price could see M.Eastern demand reduce perhaps? Although the order book currently gives very good visibility.
I like the fact that GMS has diversified into offshore wind, where its vessels could be redeployed for only modest conversion cost (mgt told me on a call last year). One ship is already in Europe doing that.
Last year saw a series of encouraging trading updates, and broker upgrades. Some forecast data seems to show reducing forecasts, this looks like a data anomaly to me, as I’ve been following the detailed updates from Zeus (many thanks) available on Research Tree, and these have not been falling. It’s not always clear what other data goes into consensus numbers, and they can be unreliable for smaller caps if some out-of-date forecasts get jumbled up in the calculations.
Hopefully the new bank facilities should allow GMS to start paying divis. I think that’s important, and I would prefer some income from this share, and not hopefully management buying more ships and running up more debt, as this stuff can be horribly cyclical.
The last 9 months share price moves have been frustrating for shareholders, but zoom out and the bigger picture remains very positive - |
Share Tip: ‘the man who bought London’ has increased his stake in this ‘in demand’ Abu Dhabi-based offshore energy services supplier
The former Prime Minister of Qatar, Hamad bin Jassim bin Jaber Al Thani, is believed to have increased his stake in Gulf Marine Services (LON:GMS), one of our 2025 selections.
‘HBJ’ who is believed to own over 3% of Deutsche Bank, has been referred to as ‘the man who bought London’ following the Sovereign Wealth Fund in Qatar that he was running having bought Harrods, the Shard, and amongst many other UK investments also being a partner in the development of One Hyde Park.
Known to be one of the wealthiest men in Qatar, HBJ is the owner of the widely circulated newspaper al-... |
zho, apologies I did not scroll all the way down, thanks for correcting me. That means Imperial took the entirety of the distribution noted by Seafox on 31 December, so that distribution is happening in a bit of a strange way. But whatever, by definition Seafox will at some point cease to distribute, either because it reaches a long term holding or because it reaches nil. |
By my calcs only about 1.4% of Seafox species remains going on the RNS 19th Dec. Is that correct? |
hpcg
If you scroll down the RNS it says:
"Imperial Financial Holdings Ltd has acquired on 24th December 2024 15224754 shares from Seafox International Ltd as part of a share distribution, as announced by Gulf Marine Services Plc on 19th December 2024" |
I don't necessarily think that jump can just be Seafox distribution, but without knowing the mechanics it is possible. Either way it is nice to see a counter argument to the proposition that those shareholders were only sellers. |
That holding announcement is just recording the shares received in specie from Seafox. Suggests that they are retaining what they are receiving, which is something I guess |
A little bump up there (late reporting though) from that rns with Imperial Financial Holdings Limited c/o Mr. Fady Bakhos, Al-MIRQab increasing.
More of that kind of buying and 16p will be under threat for the breakout. Some decent exchanges today, but not enough.
This wants to breakout and go higher. We all know it is being held back.
Show us some bangers to smash the sellers to allow that breakout.
Bangers and Smash!
All imo
DYOR |
On 17th December they announced:
"The company now anticipates its 2024 adjusted EBITDA guidance to be at the upper end of previous guidance of USD 98-100 million for 2024."
On 28th October they reported Q3 (end Sept 2024):
"The Group's continuous focus on deleveraging has resulted in net bank debt reduced by US$ 46.1 million to US$ 221.2 million"
Which suggests leverage will drop below 2x EBITDA during January 2025. |
Roland Head (Stockopedia):"I estimate the new package could result in a c.0.6% reduction in the interest rate being paid by GMS today, with a further reduction when leverage drops below 2x EBITDA. That could save c.$1.3m per year in debt costs, based on the last reported net debt of $234m. That's a useful saving for a company expected to report a net profit of c.$48m in 2025" |
Gulf Marine Services (GMS), a leading provider of self-propelled, self-elevating support vessels for the offshore energy sector, is pleased to announce that it successfully completed the refinance of its debt, on December 30th 2024, as detailed in the Company's previous announcement on August 1st, 2024. |
Agree hpcg
Patient here too |
I do not want there to be buy backs (or dividends) until all the warrants have converted or expired. The warrant prospectus, available on the website, explains that warrant holders are kept whole by either of those distribution methods. I do accept that a share bought back at 16p made whole, is better than a share bought back at 18p, but as buybacks would raise the share price that outcome in pence per share diverges. This is but a 6 month wait, and I am patient :). |
I don't find it tedious. I find it wonderful. I wouldn't be able to buy at this level otherwise |
It depresses the price, but not the value.
The company should start to hoover them up and slow down debt repayment imv. The debt is cheap, the forward rev profile and therefore earnings are solid. |
The relentless in specie transfers by Seafox to their shareholders and presumably subsequent sell down my them is tedious. |
Some debt deal this is that takes more than 5 months to 'finalize' after agreeing on the initial terms.... |
Bearing in mind the current stock price and the ebitda earnings, the company is on a strong traectory.
The shares are lowly valued at ~x 4 ebitda: ev. why?
The overhang of shares and warrants detailed in various annoucements.
The company has a stated intention of reducing gearing to x1.5 nett leverage ratio before considering what to do with the funds.
Consider this. New boats will not earn 25% pa and the future of the lift boat segment is unclear, so new/2ndhand vessels should be off the table.
At this rating and with ~3 years of revenue assured it seems only sensible to reduce the share count. The management are scared by the last cycle and want to contiue to delever as a priority.
For shareholders, slowing down repayments on the the ~8.5% loan and using those funds to buyback and cancel stock would add very significant value to the equity.
If you can see the logic, write to Mansour and express you view. Though conservative, both he and Alex are persuadable. |
This is from email with Mansour before Xmas.
Yes we do expect the Refi will be concluded by year end or soon after. We are closing few items to complete the docs. |
Hopefully not too long to wait then !! |
They indicated a few months back that the new banking facilities were commercially agreed and would be finalised before year end.
Not long left now, and in my view its a bit careless to leave it hanging like this. |
Blue zone formation developing |
Nice close |
Be nice to get a divi and see 30p next year ! Leasing new rigs seems a better option than taking on huge debt again ! |
bbg2 - When they released 1H results,management did state they would update 2025 guidance towards the end of the year.So this disclosure is simply that
On equity issuance,buying new vessels at the expense of dividends is debatable.Should they opt to buy vessels,there is enough internal equity/cash generation and debt capacity to invest $75-100m |
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