Gyg Share Discussion Threads

[jonwig] 21/11/2017 08:01

Zeus comment this morning:

GYG has given a trading update this morning, which has highlighted it has experienced several delays on the start dates of some of its refit contracts resulting from the two hurricanes that hit the US and Caribbean in Q3 (a large proportion of mega yachts go to St Barts and St Martin who were both hit extremely hard). This is a timing issue rather than contracts being lost or cancelled. In addition, a substantial contract scheduled to start in September has also been delayed due to the vessel not arriving in dock until the middle of November.

The contract delays occurred exclusively within the Refit division. The impact of the hurricanes has disrupted cruising patterns with owners extending their Mediterranean season while facilities were assessed in the Caribbean, hence decisions relating to refit programmes were delayed. The “substantial” contract was also a Refit contract, with the majority of revenue now not being recognised until December and into Q1 2018. Elsewhere, the New Build division has performed in line with expectations, which should be a useful pre-cursor for future market growth. The Technocraft division, which fits scaffolding on and around vessels has also performed with record Q4 revenue +66% YOY, reflecting the shift in contracted work into Q4 and early 2018. Savannah was not impacted by the hurricane activity.

We are downgrading our 2017E forecasts to reflect the timing of these Refit contracts, which generate gross margins in excess of 30% and therefore has a disproportionate impact on profitability. We are now assuming revenues of €61.0m (-8% vs. previous forecasts) with adjusted EBITDA of €7.1m (-12% vs. previous forecasts). We have also tweaked up our depreciation number by €0.2m to reflect the increased activity levels in Technocraft, which involves the hiring of equipment. The upshot is a 17% cut to 2017E EPS. We are maintaining our 2018E forecasts at this juncture, which should prove very conservative given this timing impact on Refit contracts.

While the downgrade to 2017E EPS is disappointing, we believe the Group is well positioned with superyacht numbers at their highest ever levels and growing, with the order book dynamics firmly intact. The dividend yield in excess of 5% from 2018E should also offer some support in our view.

[davr0s] 21/11/2017 07:33

No they never do.

[peter27] 21/11/2017 07:30

Given the weakness in the share price in the last few days this is no surprise. Will LSE investigate who knew??

[jonwig] 21/11/2017 07:16

Trading update:



Some contract delays moving revenue and profits into 2018. (None of them the fault of the company, it seems.) Otherwise positive order flow. The market may well take a dim view of this.

Prior expectations were Revenue €66m, adj EBITDA €8.1m. These are now €61m and €7.1m "at least".

[alter ego] 18/11/2017 16:34

That’s what I just did.

[its the oxman] 18/11/2017 16:15

Time to buy on the pull back perhaps.

[robinnicolson] 30/10/2017 09:52

From the recently published Credit Suisse Global Wealth Report 2017:

"Assuming no change in global wealth inequality, the global economy is projected to add another 719 billionaires in the next five years, meaning that their number will rise to nearly 3,000. Of these, 230 will be from North America and 205 from China. Of the additional 235 billionaires expected from Europe, 33 are likely to be from Russia."

[jonwig] 29/10/2017 10:46

The FT tells us:

"It has been a good week for billionaires. The UBS/PwC Billionaires Report 2017 claimed the combined wealth of the world’s 1,542 billionaires rose by almost a fifth last year to $6tn: more than double the UK’s gross domestic product."

[jonwig] 26/10/2017 11:31

Looking at Quotes, I'm seeing 139 - 143. Zero volume.

[mastermatto] 26/10/2017 11:20

Why are there no live prices for GYG. I am only being quoted an End of Day price.

[saucepan] 10/10/2017 09:15

Thanks, jonwig. Yes, I looked at that. Indeed, there is some good information there.

[jonwig] 10/10/2017 09:02

Hi, saucepan. If you haven't seen it already, the Equity Development note (free to register) is a good source.

[saucepan] 10/10/2017 08:35

Hi folks. I joined you here this morning. GYG looks an interesting play.

[irenekent] 09/10/2017 08:08

jonwig- if only!

robin - thanks for the links. In many instances painting is not treated with enough care as it is seen as 'icing on the cake'. Of course to an owner who may not know much about the ins and outs of boat care, but just pays the bills, paint jobs are easier to make a comment on as it is pretty obvious when things have gone wrong. Also re-doing such large and labour intensive jobs causes delay, cancelled charters and owners cruises not happening. With modern coating systems this is specialist work that should be done in carefully controlled conditions. This is where GYG comes in and I bet they charge a premium for this quality of service. I would imagine that even at this exalted level of the business the old boatyard more of 'no cash,no splash' may well prevail while matters are under discussion. Few boatyards like launching boats until all bills are paid.

[jonwig] 09/10/2017 06:55

robin - thanks for those links (will read later) and the warnings. I looked at the section of the prospectus detailing ongoing litigation issues (pp 110 - 111) and was reassured. (I assume it was a complete list of issues.)

Of course, you could also argue that the difficulties here are a considerable barrier to entry for new firms.

[robinnicolson] 08/10/2017 21:56

This presentation highlights the complexity of achieving a paint finish to superyachts. Definitely worth a read:

hxxp://www.materialsfinishing.org/attach/Superyacht%20Finishing%205-10-16.pdf

[jonwig] 07/10/2017 08:29

Nice post irene - you sound like the owner of one! They are, of course, already the market leader and could be looking for acquisitions.

[irenekent] 07/10/2017 07:44

Thanks for your comments jonwig. This company are into a good thing as they provide a recurring service which cannot be neglected. Many if not most superyachts are chartered to help pay for their maintenance. These yachts cannot be just left lying around doing nothing as they have to be kept crewed all year round, particularly when they are in the water. The chartering helps to keep crews up to speed and enables systems to be constantly monitored for efficiency. Berthing fees for large yachts are phenomenal and idle boats accumulate weed and in some cases corrosion. In order to monitor these potential problems most boats are hauled out of the water on an annual basis for anti-fouling and general maintenance which would also include repair of any damage to paint systems. Charterers would insist on high standards of appearance, hence the necessity of total refits every few years. All of this bodes well for GYG. I note the comparison with Watkin Jones who have paid a dividend from the beginning which certainly gives me confidence in a company's future. A steadily rising divi acts as a good barometer of progress.

[its the oxman] 02/10/2017 10:46

Should see a near term break through 150p

[jonwig] 01/10/2017 08:11

Quite influential, that site. Thanks!

[jonwig] 30/9/2017 17:41

I don't know how a major recession would affect the super-rich. Are they even a homogeneous group? I guess most regions would welcome the employment they generate and VAT they pay, though there will always be calls for them to pay 'proper taxes'.

Mind, I wouldn't want any of them as neighbours, but in my part of West Yorkshire I'm pretty safe!

[mrnumpty] 30/9/2017 16:06

jonwig , thanks for such a prompt and informative reply , in which you are more candid than I had expected by revealing your purchase price . As you write , there seems to be a good chance of further share price growth , and I have just read a report suggesting a valuation of £ 105m , about 1.6 times the current value . Nonetheless , we both know the mantra of " do your own research " . Although I read all of your comments on the Burford Capital ADFN bulletin board , I have rarely posted as I am somewhat in awe of your expertise . Anyway , many thanks again , and good LUCK ( I think my typo might have been Freudian ! ) to us all . Oh , finally , do you have any thoughts concerning how this stock would respond to a market downturn - on the one hand , one might think that the rich will always have money to pay for their yachts and yet , on the other hand even they might reduce their expenditure in a downturn . As I wrote before , any decisions and inferences which I make are my own responsibility , as we are all adults .