Gyg Share Discussion Threads

[robinnicolson] 12/7/2018 13:20

Simon Thompson now has a sell recommendation.

[jonwig] 12/7/2018 10:12

Simon Thompson (IC) was very keen on this and described its business model as very simple. It looks as though the new-build work is proving to be anything but.

[its the oxman] 12/7/2018 08:19

Looks very hard hit today. Shame, just glad it was not a big position for me but still a nasty surprise. Will bob along under 100p now till things improve hopefully for those patient enough to wait.

[pireric] 12/7/2018 08:19

Classic Zeus float with a massive Divi yield to tempt where the equity story is weak

[eentweedrie] 12/7/2018 07:59

was previously tempted to buy in here - glad i didn't; very disappointing update

[jonwig] 12/7/2018 07:53

Trading update. Zeus Capital concludes:

While this is clearly a disappointing update, we believe the industry dynamics remain attractive. Despite the logistical challenges faced by the group in the year to date, we believe the group is well positioned with superyacht numbers continuing to grow. On our revised forecasts the company trades at 17.7x EBITDA in 2018E falling to 11.1x in 2019E, on a P/E basis the company trades at 34.5x in 2018E falling to 18.1x in 2019E.

Are they becoming a serial disappointer?

[mfhmfh] 02/5/2018 09:51

Ex-dividend date tomorrow

[its the oxman] 27/4/2018 11:15

Should of bought more of these 145p now.

[its the oxman] 27/4/2018 09:40

Not sure about 170p without newsflow or update but every chance of breaking 150p now.

[penpont] 26/4/2018 08:11

Simon Thompson of the IC updated his thoughts on GYG yesterday as follows:

Chief executive Remy Millott and finance director Gloria Fernandez of GYG (GYG:123p), the market leader in new-build and refit superyacht painting, were in upbeat mood during our results call.

The company listed its shares, at 100p, on Aim last summer when I suggested buying them (‘Floating a profitable passage’, 4 Jul 2017), attracted by the fact that the number of 40-metre-plus yachts has doubled to 2,000 in the past decade, and is predicted to grow by a further 14 per cent by 2020, according to industry analysts, buoyed by the steady growth in the number of billionaires. The boats are getting bigger too with the average GYG client owning a yacht 78m in length, and with an average painted surface of 3,500 sq metres.

That’s good news for the specialist companies catering for the maintenance of these huge ocean going vessels which require a major survey every five years to comply with certain class, maritime laws and insurance requirements. Indeed, GYG’s refit and new build revenues increased by 16 per cent to €53.7m (£47.1m) last year, and there was a useful contribution from its supply business which sold almost €9m worth of marine products and maintenance equipment through its retail and yacht supply divisions.

It hasn’t all been plain sailing though as last autumn’s unprecedented US hurricane season forced yacht owners to extend their Mediterranean sailing season before transferring their prized vessels to the Caribbean for the winter months which subdued business on the east Coast of the USA. However, no contracts were lost, one reason why I continued to rate the shares a buy at 123p at the time (‘Exploiting buying opportunities, 22 Nov 2017).

Importantly, the directors are comfortable with market expectations that GYG’s revenues can ramp up by 18 per cent to €74m this year to lift pre-tax profits by more than half to €8.6m and deliver EPS of 12.9p. These bullish forecasts seem justified as a record forward order book of €20.4m at the turn of the year has grown sharply since then, and is likely to continue to make waves buoyed by a pipeline of work now worth €375m and underpinned by GYG’s eye-catching historical conversion rate of 32 per cent.

Shareholders are being rewarded with a dividend per share of 3.2p, and analysts expect the payout to rise to 6.6p this year, covered almost two times by EPS estimates. Net debt of €6.7m is expected to be slashed by more than half in 2018, reflecting the fact that almost two thirds of forecast annual cash profits of £9.9m could be turned into free cash flow. Bolt-on acquisitions are being considered too.

Trading on 10 times forward earnings, and offering a 5 per cent plus prospective dividend yield, I maintain my 170p target price. Buy.

[alter ego] 18/4/2018 13:21

I already hold GYG but added more today after reading through the presentation highlighted by robinnicolson (post 86). Thanks for that Robin, very informative and encouraging regarding the size of the market and GYG's dominant position.

Demand looks set to keep growing with increasing numbers of very rich people. It seems unlikely that clients will be too bothered about paying for top quality given that charter rates for these yachts run from €150k pw for a small yacht to €750k pw for a large one. Getting the work done on time and avoiding rework is likely to be far more important to ensure the vessel is back on the water as soon as possible.

Competition for the largest work looks limited with the main competitor, Yachting Protection, a private company in Greece and most of the rest relative minnows. Some consolidation seems likely too.

With outlook positive and the dividend for a full year set to yield about 5.5%, I'm content to see how things progress in the months ahead.

[lovat scout] 18/4/2018 12:56

It looks positive - I wonder if that's all the financial deck clearing (no pun intended!)? It's good to see the market they can pitch for has increased by €100m - conversion rate obviously crucial. I wonder if GYG have ever any bad debt issues? I suppose not given yachts are good collateral!

[its the oxman] 18/4/2018 08:54

Can see this running back to 150p come next set of results, outlook all looks good , investor meetings should go well, and taps into the trend of the super rich getting richer which is only going to continue.

[robinnicolson] 18/4/2018 08:40

Zeus Capital:

"We are maintaining our forecast assumptions on the back of these results. We are encouraged by the growth in order book. GYG is well positioned for growth given its position on a number of fronts (refit new, supply etc).
Valuation – GYG plc trades on a 2018E P/E of 9.5x (falling to 7.7x in 2019E) and an EV/EBITDA of 5.9x (falling to 4.8x in 2018E), which we believe is compelling in the context of a >6% yield from 2018E. Our valuation is also supported by our DCF and intrinsic value analysis, which implies a valuation of €124.5m (£107.1m) if the strategy is executed successfully."

Incidentally there is an informative presentation on the company website:

hxxps://www.globalyachtinggroup.com/wp-content/uploads/GYG-Preliminary-Results-FY17-FINAL.pdf

[its the oxman] 18/4/2018 08:18

Debt reduced and a nice dividend, always nice to see. But look at the pipeline of business up c.100m from last year. Surely bodes well, any forecasts, targets or research info anyone?

[alter ego] 18/4/2018 08:13

final results announced today

[mrnumpty] 18/4/2018 07:55

Strange that both here and on the LSE site , shares are shown as up by 12p at 7.46am . Any comments ? All looks very positive .

[peter27] 05/4/2018 18:40

sorry. it wasn't FD it was 'Financial PR' look under comments on 3 April.

[mrnumpty] 05/4/2018 17:54

jonwig . Thanks for your comments and your diligence - I couldn't find any information on the Company's website regarding the increased holding by Woodford , but Interactive Investor shows that he has increased his holding from 18.20% to 19.34% .

[jonwig] 05/4/2018 11:44

Yes, seems bought ~532,000 yesterday. I doubt he will have had any inside information.

@ peter27 - can't find it, and the FD should not have told one person!

[mfhmfh] 05/4/2018 11:18

Woodford Investment Management Ltd above 19%