Kbc Adv.Tech. Share Discussion Threads

[picasso2] 02/6/2014 11:41

Great potential, no reason why the share price should not reach £2 by year end, in my opinion.

[leeson31] 02/6/2014 09:51

done my bit to help the cause: 20k shs at 138.5p via cnks. hence theyre on the bid now at 135p.

this breakout, and turnaround in the co.s fundamentals should imo get the share price short term to at least ~160p mid. plenty of cash for growth, good contracts, and a chart breakout, and a 1p divi too.

cheers

[sven2006] 01/6/2014 13:33

nice one - thanks

[apad] 31/5/2014 12:43

A slick fundraise
A software provider has pulled off a major fundraising and one worth noting
Investors have reacted positively to news of a major fundraising by KBC Advanced Technologies (KBC: 123p), a consultancy and software provider to the global hydrocarbon processing industry. In fact, with the company's share price trading up to 123p post the announcement, it looks like this year's sideways move is now over and an assault on the January high of 132p is imminent. Beyond that, my fair value target of 165p, which neatly coincides with a major high in August 2001, is a realistic target price.
The institutional placing of 20.8m shares raised £24m at 115p a share to account for just over 25 per cent of the enlarged capital and means that pro-forma net funds are around £31m, or 38p a share. The company's market capitalisation of £100m after the placing equates to 1.67 times book value, so it is not extended given that net cash accounts for half of net asset value and 30 per cent of the current share price.
More importantly, the new cash will enable the company to target larger, more capital-intensive, higher-margin projects; continue investment in sales and marketing with the aim of boosting revenue and earnings growth; expand KBC's technology offering to provide a more comprehensive software package across the full spectrum of wellhead, production, oil and gas processing, refining and petrochemicals; and selectively acquire niche software companies that sell into the upstream sector and whose software integrates effectively into KBC's Petro-SIM› platform.
In addition, KBC will deploy some of the new capital to invest in high-growth markets in China, the Middle East, Latin America, Asia and India over the next couple of years. In the Middle East, new world-scale refinery and petrochemical facilities are being built which will need a large number of skilled workforces, requiring services in organisational and skill enhancements suited to KBC's offerings. The company is also well positioned to support a major 10-year programme in place to upgrade refinery assets in the former Soviet Union.
In my opinion, the targeted move to higher-margin work and investment in new direct software sales will not only enhance KBC's software sales in the coming years, but should lead to a higher proportion of recurring revenues. The higher-margin technology business accounted for a quarter of the company's revenues of £65.1m in 2013, but it's worth pointing out that recurring revenues from the division jumped by 20 per cent in the same period to account for £7.6m of the division's £17.6m of revenues. This business enjoys operating margins of around 30 per cent, whereas KBC's consultancy division has margins of around 8 to 10 per cent.
It's also worth noting that recurring revenue is set to surge following a raft of contract wins in the past 12 months. These include a five-year agreement with a Japanese refiner worth £1.8m; a similar deal with a US refiner; and a £10m, seven-year contract for the provision of the company's Multiflash› software, maintenance and support services to a large oil and gas services company. KBC's Multiflash› software is being integrated within all of these client's production software applications, which are used by the majority of oil and gas companies worldwide.
Moreover, if KBC can boost the contribution from its software business, then there is a strong case to be made that the earnings multiple the shares trade on should be much higher than at present. That's because net of cash, the company's enterprise value of £68m equates to only 12 times last year's post-tax earnings, a massive 40 per cent discount to the average multiple enjoyed by Aim small-cap software companies with high recurring revenues. Admittedly, a multiple of around 12 times earnings for KBC's consultancy division looks about right but, given that the software business has grown revenues by 38 per cent in the past three years, then to value this higher-growth and higher-margin operation on the same multiple seems harsh to say the least.
Even taking a conservative approach and rating KBC's technology operation in line with the UK software and services sector average earnings multiple of 15 for sub-£100m market capitalised companies, KBC is still being undervalued by around 25 to 30 per cent.
Re-rating far from over So, although KBC's shares have moved up sharply since I first advised buying them at 69p ('Fuelled for growth', 5 May 2013), the re-rating is far from over in my view. In fact, even if the shares hit my target price of 165p to give the company a market value of £133m, then the enterprise value of £102m would still only equate to less than nine times this year's cash profit forecasts of £11.7m. Furthermore, that's not factoring in any upgrades for higher-margin contract wins. There is also a small dividend after the board declared a final dividend of 1p a share.
So, ahead of trading updates at the annual meeting on Wednesday 4 June, a pre-close update in July and the half-year results on Tuesday 23 September, I continue to see significant upside to KBC's shares. So do analysts at Cenkos Securities who "can envisage a scenario where the shares are worth in excess of 200p as the technology business becomes a significantly greater proportion of KBC's revenues". On a bid-offer spread of 121p to 123p, and offering 33 per cent potential upside to my target price of 165p on a six-month basis, KBC's shares rate a buy.

apad

[m1das_touch] 31/5/2014 11:37

Chart looking really good for a further push upwards next week.

[actybod] 31/5/2014 11:33

Sven - had a quick browse at shops but jist was recent placing to give them a platform for further growth. Chart suggests break out from here.

[sven2006] 31/5/2014 10:00

Acty, can you post it at all ?

[gswredland] 30/5/2014 16:46

Thanks acty

[actybod] 30/5/2014 14:03

Write up in shares mag and IC. 200 target. GLA

[ivyeileen] 29/5/2014 21:02

....... er, and what about the existing (non-institutional) shareholders ? The Company is proposing to disapply its pre-emption provisions so that us ordinary types will be excluded from the Placing. And why? Surely our support should be recognised by allowing us to participate, if we wish. The Placing can be underwritten easily, as it seems already to be pre-placed according to the Press Release. No doubt the Company would argue it is saving costs and shortening the timetable, but how valuable is shareholder loyalty against that?

Vote against the disapplication resolution.

[gargoyle2] 23/5/2014 12:37

Good to see Kestrel adding more here too, in addition to those it is subsribing for under the placing.

[protean] 23/5/2014 12:14

Just covered by ST in the IC.

[anumidium] 22/5/2014 20:59

Agreed with that Simon, such a small discount to the prevailing price suggests there is a lot of confidence in management.

[apad] 22/5/2014 09:33

It's a lot of cash - surely they must have their eye on buying a company?
apad

[dasv] 22/5/2014 09:05

Gargoyle2 - yep I noticed that re: share price It was locked at 118p as if the company had been suspended - rock solid - despite a mega sell-off in the AIM all share and the MCX (FTSE250).

[gargoyle2] 22/5/2014 08:47

Market seems to like the placing. Some chunky buys going through.

[gargoyle2] 22/5/2014 07:56

Thanks Simon. I was going to comment yesterday that the price seemed to be being well supported over the past week (lots of sells at 118, but the price not budging despite the general sell off of small caps). The placing must have been the reason. Good to see Kestrel stepping up again, as well as the new Norwegian shareholder -- that looks potentially interesting imo.

[simon gordon] 22/5/2014 07:23

22/5/14:

Placing of 20,869,565 Ordinary Shares at 115 pence per share to raise £24.0 million

KBC Advanced Technologies plc, a leading provider of consulting and software solutions to the hydrocarbon processing industry, is pleased to announce that it has raised £24.0 million via a placing of 20,869,565 Ordinary Shares at the Placing Price of 115 pence per share. The Placing Shares have been conditionally placed by Cenkos, as agent for the Company, with institutional and other investors.


Reason for Placing

As KBC set out in its most recent Full Year Results the demand for its services remains buoyant and its addressable market continues to grow.

KBC's long term strategy is to broaden its technology offering and expand its business further into the upstream sector in order to increase the proportion of technology revenues, both organically and inorganically.

The net proceeds of the Placing will be used to:

· allow the Group to target larger, more capital intensive, higher margin projects;

· continue investment in sales and marketing with the objective of further enhancing revenue and earnings growth;

· continue the Group's two year investment in high growth geomarkets, which commenced last year in China and Middle East and will include the former Soviet Union, Latin America, Northeast Asia and India in 2014 and 2015;

· expand the Group's technology offering to offer a more comprehensive software package across the full spectrum of wellhead, production, oil and gas processing, refining and petrochemicals; and

· continue the Board's strategy to selectively acquire niche software companies that sell into the upstream sector and whose software integrates effectively into KBC's Petro-SIM™ platform.


Summary of Placing

Conditional on Admission, the Company will issue 20,869,565 new Ordinary Shares which will raise £24.0 million, before expenses, and approximately £23.1 million, after the expenses of the Placing. The Placing Shares issued pursuant to the Placing will represent approximately 25.9 per cent. of the Enlarged Share Capital. Dealings are expected to commence on 10 June 2014.

As part of the Placing Kongsberg Gruppen ASA, an Oslo listed company, has agreed to subscribe for 4,032,000 Placing Shares and will have a beneficial interest in 5.0 per cent. of the Enlarged Share Capital following Admission. Kongsberg Gruppen ASA is an international, knowledge-based group that supplies high-technology systems and solutions to customers in the oil and gas industry, the merchant marine, and the defence and aerospace industries.

Ian Godden, Chairman of KBC, commented:

"KBC has made significant financial and strategic progress over recent periods and we see substantial opportunities in high growth markets.

"This Placing provides the funding that will allow the Group to take best advantage of those opportunities, through organic and inorganic investment in our technology offering, the further development of our market reach and an enhanced ability to undertake larger projects.

"We are delighted by the support we have received from current and new investors and in particular welcome Kongsberg Gruppen ASA as a shareholder. Their investment will further strengthen the relationship between KBC and Kongsberg Gruppen ASA with the aim of offering upstream, midstream and downstream customers improved solutions for process simulation."

[simon gordon] 29/4/2014 11:29

Good to see the BoD getting deeper:

29 April 2014

KBC Advanced Technologies plc

("KBC", the "Company" or the "Group")

Appointment of additional directors

KBC is pleased to announce the appointment of Andrew John Howell and Kevin Edward Smith as executive directors of the Company with effect from 28 April 2014.

Andrew (aged 46) manages the Technology side of KBC's business, including software development, customer support, marketing and strategy development. Prior to joining KBC in 2011 Andrew worked for Schlumberger Oilfield Services, holding senior management positions related to oil and gas development and production, and at Aspen Technology (Hyprotech) where he managed software development for the oil and gas industry. He started his process engineering career with BP Exploration and has a master's degree in Chemical Engineering from the University of Cambridge, England. Having been based in North America for many years, Andrew is currently relocating to the UK.

Kevin (aged 38) leads the Consulting Partner group within KBC which is responsible for overseeing KBC's consulting business, including all aspects of related business development, project execution and innovation. Prior to accepting this role in 2013, he was Executive Vice President, responsible for KBC's Organisational Consulting business which has grown substantially since its inception with the acquisition of TTS Performance Systems Inc where he was Vice President of Operations at the time of acquisition by KBC in 2006. He previously worked for EQE International Inc, an ABS Group Company, and Kimberly Clark Corp, with whom he holds five patents. He has a BS in Chemical Engineering from the University of Tennessee-Knoxville, USA.

Ian Godden, Chairman of KBC, commented: "I am pleased to welcome Andrew and Kevin to the Board of KBC. They will add senior executive experience to an already strong Board and will lay the leadership foundation for KBC's ambitious business development in consulting and technology for the next five years. Kevin and Andrew have worked very effectively as key members of KBC's Operating Executive team and I am sure they will become strong contributors to the Board also."

[apad] 25/4/2014 18:00

www.activeminds.ca/blog.php

www.linkedin.com/groups/PetroSIM-Users-6623470‎
Feb 13, 2014 - The group aims at sharing modeling experience among users of Petro-SIM. NOTE: This group is not owned or administrated by KBC.


apad

[apad] 25/4/2014 17:41

17 Vacancies supports the "strong start to 2014" quote.
apad

[jumbo66] 24/4/2014 20:38

tidy [hd] re jumbo

[cashstrapped] 09/4/2014 10:46

No can't see any news anywhere so just pulling back with everything else. Hopefully this should set it up for a run at 150 but heading into Summer weakness so that might not happen until sept/Oct time.