Gulf Marine Services Share Discussion Threads

[mintitan] 15/4/2014 17:02

GMS has held up pretty well in the last few days. Nice to see a blue share price when most companies are red. A good sign to me that the market recognises its value and doesn't throw it under water when overall most stocks are tanking. Currently under the radar I think; just the way I like it :)

[proj] 15/4/2014 11:02

well put, rivaldo. I'm out too, for pretty much the same reasons, gl all.

[shauney2] 11/4/2014 16:48

From an article in yesterdays Shares magazine.

"Downside protection is offered by Canaccord's 133p liquidation value which assumes no further contracts are won and the companys assets are sold individually on the market"

I'm hoping the price stays around this level until the update early May.Could be a good entry point if that is positive.

[sagarn] 09/4/2014 09:04

That's a shame rivaldo. Hope to see you back at some point.

Robow: 175p as a short term target will do me nicely thank you...!

[robow] 09/4/2014 08:25

as reported in the Evening Standard last evening:
Snap up Gulf, Canaccord recommends, as it initiates coverage in the oil services firm. The broker is impressed with its expansion plans since listing last month. Shares are 147p, the target is 175p

[modform] 08/4/2014 20:18

Your call Rivaldo and good luck, having said that, it's one of my best stock performer to day with no change.

[modform] 07/4/2014 19:17

You can buy it cheaper than naked trader, try hhr.

[rivaldo] 07/4/2014 15:15

:o)) Reciprocated...let's hope GMS is another successful one.

It's not often one can buy in cheaper than the Naked Trader!

[philo124] 07/4/2014 14:26

Hi riv, fancy seeing you here, happy days.

[rivaldo] 07/4/2014 14:18

I've bought in on the dip. Encouraging to see Gervais Williams in particular so keen on this one per the thread header post.

Canaccord had this to say today when they initiated coverage:

"Investment case

GMS is the largest independent provider of self-propelled, self-elevating support vessels (SESV) in the Persian Gulf and a leading supplier offshore NW Europe. It listed in March 2014, raising capital to fund an expansion program both in its existing markets where demand is strong, and into southeast Asia and west Africa. SESVs are used in well intervention and topsides maintenance & modifications, both markets that are primarily driven by ageing of the oil industry's infrastructure rather than development of new fields, and are therefore less sensitive to oil prices.

They are also used in wind farm installation, a market that looks set to perform well in the next two years with particularly strong growth in installations offshore Germany.

GMS benefits from having one of the youngest fleets in the industry, and an in-house shipyard for topside completion and maintenance of its vessels. It therefore has a capital cost advantage over many of its peers, and the flexibility to adapt to customer requirements. We believe it is currently trading at an attractive value, and that strong earnings growth over the next few years should see the stock perform well. Although the value is currently ahead of the NAV, we believe that as the company is able to grow over the next few years (from bringing new vessels to market, funded mostly by internal cash generation) the value will become more apparent.

Sector context
In a heterogeneous sector, GMS stands out as a leasing company with minimal execution risk on its contracts but very high operating leverage to charter rates. There are no direct peers listed in Europe, with most of its industrial peers privately held. We believe it is likely to trade primarily as an asset play.

Company fundamentals

We expect EPS to grow at close to 20% pa for the next three years, driven by the existing fleet expansion plan with no net pricing growth. The key drivers for earnings are charter rates, vessel utilisation, build costs & tax rates. On all of these metrics GMS is currently performing well.

Valuation

We base our target 175p on net asset value, on adjusted Quest™, and cross-check against resultant multiples. At our target the stock would trade at a 23% premium to NAV, and 10.0/8.3x 14/15E EV/EBIT and 9.9/8.1x 14/15E P/E.

Share performance catalyst

Given the lack of alternative sources for rates on its vessels, we expect the major catalysts to be results announcements (next one 1Q IMS) and large contract awards."

[philo124] 07/4/2014 13:54

In $. 30.3,36.0,42.9 fully diluted and adjusted. P/E 2014/2015- 9.9/8.1. They state.

[simon gordon] 07/4/2014 12:21

Phil,

Could you share the EPS forecasts for 14/15/16?

TIA

[philo124] 07/4/2014 11:52

Try digital look , it's on there.

[dunc8] 07/4/2014 11:31

Can anyone tell me why YAHOO FINANCE and following on from that my STOCKWATCH app for i phones - does not recognise GMS! - strange - its the only stock out of the 27 I hold that simply will not appear on the screen.

[philo124] 07/4/2014 09:10

Thanks for all your posts. Got a Canaccord Boker note this am so have just bought in. Looks very good value as posted above; EBITDA 125 (Actual as above),
Canaccord forecasts 149,182,218 (2014/15/16).
Good Luck all.

[cottoner] 05/4/2014 17:19

As per modform above - cheers.

Here's the data from th GMS website.


Financial Performance

In U.S.$m, except percentages

Year 2013 2012 2011

Revenue 184.3 142.6 106.9

Profit for the year 69.4 48.6 23.2

Adjusted EBITDA 124.7 94.6 69.5

Adjusted EBITDA margin (%) 68% 66% 65%

[simon gordon] 05/4/2014 17:17

Mod,

They did $69.4m PBT in 2013.

To do 19.2p in 2014 would equate to:

349.6m shares x 19.2p = £67.1m x $1.67 = $112m.

Will try to find the de facto forecast for 2014 next week, agree they are not expensive based off the 2013 figures.

GHF pointed out to me that they are a private equity spin out and the PI house have a 180 day lock-in, they still own 51% and could temper the price if they want to sell more. At this valuation it shouldn't be difficult to sell if the oil services cycle is still strong.

[modform] 05/4/2014 16:48

Have a look at their web site simon, it gives tabulated growth history, extremely cheap valuation I think.

[simon gordon] 05/4/2014 14:13

7x = 19.2p EPS at 135p.

It appears from the Admission Document that they did 11.8p in 2013.

Seems a hell of a jump from '13 to '14.

If they do 19.2p, and are expected to double the company by 2017/8, then a p/e of at least 13x seems very reasonable = 249p.

Still not come across any broker forecasts.

[modform] 05/4/2014 14:07

Nice write up mate.

[sagarn] 05/4/2014 10:00

Thanks cottoner!

[cottoner] 04/4/2014 23:56

Gervais Williams: The small cap stocks I'm buying and trimming

The Miton manager has recently bought Gulf Marine Services and 888 Holdings, but has reduced his exposure to food producer Greencore.

By Alex Paget, Reporter, FE Trustnet
Friday April 04, 2014

Gervais Williams is one of the most experienced UK small cap managers in the business, having run portfolios in the space since 1992.

He currently runs the top performing CF Miton UK Multi Cap Income fund, CF Miton UK Smaller Companies fund and Diverse Income trust, having previously managed open and closed-ended funds at Henderson and Gartmore.

According to FE Analytics, Williams has returned 353.1 per cent to his investors since the turn of the century, beating his peer group composite by more than 125 percentage points in the process.

Williams attributes those high returns to finding companies that can not only grow their business, but also their dividend, over the long term.

"We like companies with plenty of upside," Williams said. "We want income growth of course, but we are willing to be patient and buy companies that we think will be in a position to pay a decent yield a few years down the line."

However, the manager says valuation is a very important to his decision and as a result will look to sell if he thinks a company, even if he still likes the business itself, has become fully valued.

With that in mind for those who want to add risk to their portfolio with smaller companies, Williams tells FE Trustnet about an example of stocks he has bought but also those that he has been taking profits from as they are now fully valued.

Buy – Gulf Marine Services

Williams took part in the Gulf Marine Services IPO recently. However, unlike other companies that have recently come to the market, he says the oil services company has seeming gone under the radar of most investors.

"It only came to the market a few weeks ago and due to the amount of IPOs this year which has caused some investor fatigue, and because it is in oil, the stock hasn't gained much attention," Williams said.

Gulf Marine Services, according to Williams, provides services work for the major oil companies, particularly those with offshore wells.

"They do work-over on offshore wells. The cost of a rig for the oil companies tend to be very expensive, but Gulf Marine supplies jack-up platforms which can do the job for a third of the cost. There is demand there but it is still quite an immature area of the market, but they are attracting a lot of clients because their services are very efficient."

The company was listed on the 14th March and, according to FE Analytics, investors who bought the stock on its first day of trading would have seen a return of 13.55 per cent.

However, Williams says it is a good long term buy.

"It came to the market with a P/E of seven and at 135p; however its business should double over the next couple of years."

"The dividend yield is not big at the moment and they do have quite a lot of cash on the balance sheet, but they have been using the capital they have raised to invest for growth by increasing their fleet."

"However, I expect that dividend to increase steadily over the next two to three years."

[cottoner] 03/4/2014 20:41

Older but nevetheless perhaps useful info?

GMS builds on strong foundations in Abu Dhabi – New jackup design for worldwide operations unveiled at ADIPEC

17 Nov 2013

Gulf Marine Services (GMS), founded in Abu Dhabi in 1977, has built on its strong foundations in the UAE to become the largest builder and operator of self-propelled self-elevating accommodation jackup barges, not just in the Middle East, but also worldwide. The company announced today at ADIPEC a strategic new-build programme that includes the addition of a new design to its current fleet of nine jackups.

Four new vessels, capable of global operations in the oil, gas and renewable energy sectors, are planned and will be built at the company's yard in Mussafah; the first, GMS Enterprise, is already underway with the project set to bring up to 600 new jobs to Abu Dhabi.

The new S-Class jackup design will bridge the gap between GMS' existing seven K-Class assets currently operating in the Middle East in water depths of up to 45m and equipped with 36 and 45 ton crane options, and its two E-Class harsh weather dynamic positioning (DPII) vessels currently working in the North Sea and suitable for worldwide operations in water depths of up to 65m and with 230 ton and 300 ton cranes.

Duncan Anderson, chief executive officer at GMS, says: "We've seen a major increase in demand for our jackup barges over the last five years. As a result, we are currently building a third E-Class vessel in our yard in Abu Dhabi with this capable of working in even deeper water, up to 80m, and with a larger 400 ton crane; we also have an option to build another of these large units.

"In addition to this, we've identified a need for a jackup that falls mid-way between the two classes we already provide, and have produced a modified Gusto design called the S-Class. We will start building the first of three new S-Class barges this month (November), which will be ready for quarter two 2015."

The S-Class will have DPII and will operate in depths of up to 55m, however it will be a smaller and more utilitarian harsh weather barge than the E-Class. It will have 800 sq m of deck space, a 150 ton main crane, a 15 ton auxiliary crane, and will accommodate from 150 to 300 people.

The S-Class jackups will be used for well services in the oil and gas sector and for offshore wind farm maintenance, in northwest Europe, the Middle East, South East Asia and West Africa.

Through its new build and renewal programme, the company has ensured its fleet is the youngest and most sophisticated in the industry, currently with an average age of just nine years, compared to a global offshore average of 24.

Duncan Anderson, adds: "The fact that we can build our vessels here in Abu Dhabi is absolutely key as this allows us to produce these sophisticated assets at lower than market prices. The state-of-the-art design and operational efficiency of jackup barges like GMS Enterprise and the new S-Class means we can also offer cost-effective solutions to our clients. This, along with our excellent safety record, is what defines GMS."

[cottoner] 03/4/2014 20:33

Newly-listed self-propelled jackup vessel operator GMS sets its sights on Asia

27 Mar 2014

Gulf Marine Services (GMS), one of the largest providers of self-propelled self-elevating support vessels (SESVs) in the world, announced today at OTC Asia, Kuala Lumpur, that it will bring a fleet to South East Asia, with this a new offshore solution for the region.

GMS, which successfully had a premium listing on the London Stock Exchange earlier this month (March), recently established an office in Singapore as part of a strategic expansion plan, and has offices in the United Arab Emirates, Saudi Arabia and the United Kingdom.

The company operates a fleet of nine SESVs (also known as self-propelled jackup barges/rigs) which is technically advanced and amongst the youngest in the industry, with an average age of nine years compared to 16 years for its peers. GMS builds its vessels at its yard in Abu Dhabi and is building six more vessels over the next three years.

The SESVs have four legs, a design pioneered by GMS in 1982, a large deck space, crane capacity and accommodation facilities. They provide the stable platform for delivery of a wide range of services throughout the total lifecycle of offshore oil, gas and renewable energy activities for leading international blue chip clients. These services include enhanced oil recovery, platform refurbishment and maintenance, well intervention work and wind farm construction and maintenance.

GMS provides the vessels and the associated operational support, which includes the crew, accommodation and 'hotel' services for its clients. Since GMS is both builder and operator, it can tailor the self-propelled jackups to its clients' requirements, offering flexibility and the reliability of a company with a track record of 37 years of successful operations. This level of offshore support and operational capability is not currently available in South East Asia.

Duncan Anderson, chief executive officer at GMS, says: "The four-legged self-propelled offshore support vessel concept is not widely used in Asia; a floating barge, without propulsion, is more common. When the weather takes a turn for the worse, these vessels have to take cover, operations cease and the inevitable delays can be costly for the client. Our vessels, by contrast, can cope with very demanding conditions and since they don't require anchor handling or tug support they can be mobilised much faster than conventional jackups.

"The weather window for GMS' vessels to move-infield is around three hours; for a conventional non-propelled jackup or floating barge it is an average of three days. The company's E-Class and S-Class units also have dynamic positioning (DP2), affording efficient, high accuracy positioning alongside a platform. This provides huge advantages to our customers through a significant reduction in non-productive time. Our vessels also provide a stable platform for down hole well intervention activities using wireline and coil tubing."

Currently under construction is the company's third E-Class vessel, GMS Enterprise. This is capable of working in water depths of up to 80 meters, has a 400 tonne main crane, can travel at eight knots and accommodate 150 people (this can be increased to 300 depending on deck configuration). This vessel will be ready for new contracts in quarter three, 2014.

Work is also underway on a new addition to the GMS fleet, the S-Class, which is a smaller and more utilitarian harsh weather vessel than the E-Class. The first, GMS Shamal, will operate in depths of up to 55 meters, have a 150 tonne main crane, a speed of seven knots and accommodation for 150 people (which can be extended to 300). This vessel is scheduled for delivery in quarter two, 2015.

The company also operates a K-Class of SESVs. These operate in depths of up to 45 meters, have a 46 tonne main crane, can travel at four knots and accommodate 150 people (which can be extended to 300).

Mr Anderson adds: "All three classes of our multi-purpose harsh weather jackup vessels are suited for waters in South East Asia, with these offering our clients a new, flexible and cost-effective offshore solution.