Gulf Marine Services Share Discussion Threads

[hpcg] 15/12/2023 12:33

Today Simon Thompson writes up GMS in his Small Companies column in the Investors' Chronicle. It is the bumper new year / xmas edition. The headline is the 54% discount to 2024 NAV (@ 13.2p). I think a lot of investors have clocked off, despite a full week left, so whilst there will be some action today as a result I doubt too much. The holiday issue should see more eyes. Small Caps very likely to rebound in 2024 and that ought to mean money coming back to the market.

[jimbomorry] 15/12/2023 11:33

When will the auction take place?

[exbroker] 15/12/2023 10:32

Hello miti1000

I did not know that you held these.
The auction could be a bit of fun later lets see what the volume is I guess 8 to 10 million.
I still have all of mine from the rescue placing.

[miti 1000] 13/12/2023 12:06

Hard to be totally confident in the flows so have sold done most recently including today.

[jimbomorry] 02/12/2023 13:56

Thanks ExB. Very interesting.

[exbroker] 02/12/2023 13:23

It may do but the big driver of the price short term is that the trackers need to buy the shares to reflect their weighting in the small cap index.

[jimbomorry] 01/12/2023 20:39

Will the All Share and Small cap index`s increase market exposure? Forgive the naive question.

[jimbox1] 01/12/2023 09:22

Based on the information issued on 3rd January 2023, the warrants are exercisable by the lenders at any time until 30 June 2025. If fully exercised, the warrants would entitle the lenders to subscribe for 137,075,773 ordinary shares at a price of £0.0575 per share.

[exbroker] 30/11/2023 17:35

jimbox1

Can they do that or is it only at the end of the option term?

[jimbox1] 30/11/2023 13:40

It could also be a good moment for the option holders to exercise their options.

[exbroker] 30/11/2023 11:00

Hello xxx
Now my second biggest holding been a very happy journey so far and I am looking forward to more. A rough guess say 30M shares to be bought by the trackers at the close on the 15th, that could be fun to watch given the shareholders list!!

[xxx] 29/11/2023 22:07

Good spot Exbroker, still around from the raising, if I recall. Been a bit of a journey !

[exbroker] 29/11/2023 17:16

We are going into the All Share and Small cap index`s on 15th December. There should be some index buying before and on the day.

[hpcg] 29/11/2023 09:41

Back above 13. This is how it will be, a slow and bumpy grind higher as news is sold by those cashing in gains while longer term investors grind through the supply.

[hpcg] 11/11/2023 11:15

xxx - I've not seen the report directly so I don't know. I've corrected the link - the closing bracket had become integrated. As I said, as at June, and I presume later, Praetorian Capital has no GMS holding. I mention them because many investors are familiar with Kuppy and his approach, and he has be vocal about offshore oil services. Their big holding in the space is Valaris.

The GMS share price really took off after an offshore conference in Sweden where more or less all the operators said they were not going to build any more kit. What people not familiar with the industry might not know is that the cyclicality is not caused directly by the oil price, but as a derivative of the oil price cycle. After a few years of strong oil prices service providers will have rebuilt their balance sheets and oil companies will sign up long term lucrative contracts to secure the equipment they need. At that point service providers draw a straight line upward pointing line on demand and choose to massively expand their fleets using debt. This leads to an horrific and long lasting trough when oil prices turn over and oil companies draw in their budgets. If no one falls into this trap, or for that matter financiers just aren't interested then there is nicely balanced supply and demand which is resulting in stable cash flows with good visibility. Rates should keep up with inflation, margins should be maintained which leads to wads of free cash to pay down debt and in 2-3 years make returns to shareholders.

Of course there is some far out longevity in terms of servicing offshore wind farms, but market dynamics there do not allow for boom-bust cycles so fleet sizes should very much remain balanced.

[xxx] 10/11/2023 23:04

Hi hcpg, what utilisation rates did the Zeus cap report assume?
Also, cant get the Praetorian link to open. Is that co. a holder here ?

[hpcg] 10/11/2023 13:12

Simon Thompson in the Investors Chronicle now has it on his coverage list - looks like he started on their premium service in the middle of September and in the magazine today. This should help liquidity though possibly at the cost of volatility. That said the market cap is probably too large for him to make a meaningful difference. The share buyers I should imagine are predominantly US contrarian, deep value and situational funds; think like Kuppy's Praetorian Capital, though not literally in his case (June 13F filing ). There have been no holding RNS for 12 months.

He laid out NAV targets from Zeus Capital: 25.8p 2023, 29.1p in 2024 and 33p in 2025. I don't expect to see the NAV discount narrow too much in the next few months, but as the leverage ratio takes steps down the discount should (sensibly) close in lock step. If it doesn't then someone is going to make an offer. Any IT that has a company of this size in its remit should really be looking to deploy money here as the ratio of the certainty of profit to the magnitude of the profit is surely attractive. The slowish grind up will put off the more excitable investors.

The ideal scenario is decently profitable contracts for the sector, but not any thing close to bubbly that might tempt some moron to build new.

[bmw30csl] 09/11/2023 12:40

This really feels like it has crossed the hump in the road that is indebtedness endangering the equity value. Continued progress should see the transfer of value in the EV to equity

[catsick] 07/11/2023 11:09

Plowing higher now, although still makes no sense to be under nav , which is now probably 25p

[wigwammer] 06/11/2023 09:03

I get that there has to be some cyclicality priced in, but there is also a underlying growth story here relating the energy change and renewables. Given the debt has now materially fallen and the fleet is owned by GMS, the fixed costs that need to be borne in the event of downturn have also now reduced.

[hpcg] 06/11/2023 08:17

wigwammer - which is why the shares have further to rise.

[wigwammer] 06/11/2023 07:49

On the basis of next years numbers, GMs is currently trading on a 28.9% free cash yield.

[wigwammer] 06/11/2023 07:24

At the midranges, these forecasts suggest circa $276m net debt end this year, and $228m end next. Fantastic :)

[catsick] 06/11/2023 07:11

Nice update, those new contracts must have been at significantly higher day rates, interest bill will be now falling fast as the lower rates and lower det kick in so nav will grow faster... excellent all round

[hpcg] 01/11/2023 08:19

Should self propel (ho ho) the share price up again. Backlog was $300mn end June so that has been extended even while 4 months has been used up in the mean time.