Gulf Marine Services Share Discussion Threads

[hpcg] 12/6/2023 07:42

These contract extensions should keep the share price recovery on the move. No numbers as these will be confidential but this is encouraging "continued highly favourable market conditions".

[baddeal] 08/6/2023 10:28

Well we know from how they handled that situation that governance isn't his big thing!

[trident5] 08/6/2023 00:10

He's also the CEO - not a good look so soon after trashing the previous incumbents.

[baddeal] 07/6/2023 22:06

Well a real vote of confidence in the chairman!

[gen_romer] 17/5/2023 13:17

appears to be big seller at 5p whenever it reaches that level.this is worth few multiples of 5p!

[wigwammer] 11/5/2023 13:15

Worth bearing in mind also, that the consortium of lenders now also have a material interest in the shares, as warrant holders. Pretty sure the 30% holder wants to avoid any notion of compromising their interests. ATB

[wigwammer] 11/5/2023 09:25

And hallelujah if they go down 3-4%. But given they stay around where they are - a base case - then GMS is likely to progress very nicely... ATB

[gen_romer] 11/5/2023 07:33

Lord have mercy if rates go up anonter 3-4%!One of the directors representing the 25% owner just emptied his shares yesterday-that leaves just the chairman with a paltry number of shares.No other insiders own shares in the company.GTA

[wigwammer] 10/5/2023 16:26

I'm sure the equity story has benefited from the repayment of net debt, and I'm sure the 30% holder is pleased to see it. The reason the shares haven't rerated is because interest rates have risen, and the rate GMS pay is fixed to libor. Despite this, the company is generating high levels of free cash flow to continue repayment at a good pace... Of course, if you believe that rates will rise another 3-4% from here then your scepticism may have validity - is that what you're suggesting? .... Otherwise I anticipate over the next 2 years or so net debt will fall again, perceptions will change and the shares rerate. ATB

[gen_romer] 10/5/2023 09:11

The thesis that debt repayment changes perceptions was valid even 2 years ago.Yet equity value remains same despite debt repayment in 2 years.Hope the next 2 years is different,but i dont feel confident enough because the 30% holder tried to buy the entire biz,and they would want to do the same now,so not really incentivized to increase the value of the company for the 70%

[wigwammer] 08/5/2023 09:29

I think a 30% holder is probably quite incentivised to get the share price up. I also guess management have been buying shares because they think the shares will rise too. But if you prefer shares with obvious near term catalysts - usually priced in btw - then this probably isn't the share for you. I anticipate an attractive return as debt is repaid over the next 2-3 years, and perceptions move beyond GMS being overly indebted and hence uninvestible.

[gen_romer] 07/5/2023 08:45

It begs the question why the price is still low.Me thinks its a corporate governance issue with one shareholder able to control the company with a 30% stake.Minority investor makes money thru dividend or if acquired,with no short term visibility on either

[wigwammer] 06/5/2023 17:38

"Because despite the steep progress in two years,share price is in the gutter.." yes, despite steep progress the price is still low. Exactly why I've been buying.

[nchanning] 05/5/2023 16:20

New Broker note saying debt to ebitda will be under 3x by end of 2024

[gen_romer] 05/5/2023 15:46

Love the intense discussion here
Now that we have PE type debt multiples,and assume the 2 major investors are 'PE like' firms,what should be their value realization move at this point?
Because despite the steep progress in two years,share price is in the gutter

[baddeal] 04/5/2023 19:34

We're probably in agreement on this. My expectation is if this were pe backed leverage would be c 5x to drive equity returns

[wigwammer] 04/5/2023 15:18

Baddeal - I agree that those sorts of levels, 3.25-3.5x net debt:ebitda is usually appropriate. But remember - and apologies for repeating this - the tax GMS pay is very marginal, and they fully own a long duration asset/fleet so capex is low. So for each unit of EBITDA they generate, they achieve much higher levels of free cash flow than is typical with which to repay debt. This means that a materially higher than usual level of net debt:ebitda may be appropriate for them. While this may be anathema to the market right now, it may not be anathema to any corporation or private equity unit interested in the assets.

[baddeal] 04/5/2023 14:55

Thanks for the posts on value, my own view fwiw is probably 2025 is when we see a real uplift as net debt should be closer to 3.25 - 3.5x which is probably about right for this type of asset business. Assuming we see interest rates start to come down then fcf will facilitate divis and the equity should trade north of 15-20p. Guess that means I'm in for the long term!

[blusteradjuster] 04/5/2023 12:36

Net debt at year-end 2022 was $315.8m.

A leverage ratio of 4.0 on $75 - $83m would imply a net debt of $300 - $332m.

Assuming net debt comes down a reasonable chunk and EBITDA hits the middle of the guided range, the year-end 2023 leverage ratio should be comfortably below 4.0 times.

idk, it just seems a vague, not particularly challenging thing to state wrt leverage.


"The Group expects its financial performance to continue to improve and reiterates its EBITDA guidance of between US$ 75-US$ 83 million for 2023. Group anticipates net leverage ratio to be below 4.0 times before the end of 2023."

[nchanning] 04/5/2023 11:48

Or alternatively once we reach an acceptable level of debt like $250 million dollars , we start paying out a big portion of that 2.8p earnings as dividends and who cares what the stock market thinks then ....

[dexdringle] 04/5/2023 11:45

Bloody Wigwammer coming on here with his properly researched logic. Doesn't he realise this is the stock market and therefore what's good is bad, what's logical is illogical and what's true is false...?

[wigwammer] 04/5/2023 11:35

Ok. Using tangible NAV you get around 19p a share now, and approaching 25p when net debt hits $250m - not too far off 28p @ 10x....... So at the current 5p we are looking at a TNAV discount well beyond the norms of any sector, shipping or otherwise.

[hpcg] 04/5/2023 11:15

wigwammer - I agree on the latter, just shipping and related is usually priced off NAV as it is too cyclical for earnings based.

[wigwammer] 04/5/2023 10:59

Well let's see. If it becomes a structural growth play because the amount of offshore work continues to grow and diversify, and rig rates follow, then it may trade on more than 10x. The cash conversion is fantastic and it has a big moat around it - people aren't building $1bn+ transportable rig fleets in a hurry. But to each their own :)