Kentz Share Discussion Threads

[hatter2] 20/10/2013 20:51

I doubt that Midas has the power to move the market valuation of a >600m cap company; yes a tiddler but this is no tiddler.

[penpont] 20/10/2013 18:21

Thanks rivaldo, maybe see 550 this week....

[rivaldo] 20/10/2013 11:22

KENZ should see a further uplift this week - tipped in today's Mail on Sunday:



"MIDAS SHARE TIPS UPDATE: Refinery engineer Kentz we tipped sees its stock gush by 34%
By Joanne Hart, Financial Mail On Sunday
PUBLISHED: 22:26, 19 October 2013 | UPDATED: 22:26, 19 October 2013

When Midas recommended engineering group Kentz Corporation last December, the shares were just 3933⁄4p. The firm was doing well but its peers were not and the stock was tarnished by association.

Since then, Kentz has seen off two suitors, the shares have risen 34 per cent to 5261⁄2p and chief executive Chris Brown is full of confidence.

Kentz builds oil refineries, gas plants and liquid gas facilities, constructing sites all over the world for major firms.

Over the summer, UK rival Amec and German consultancy M+W Group both decided Kentz looked appealing.

Amec put in a bid of 565p to 580p a share while the Germans offered a little less. Brown thought both bids were too low, big investors agreed and the offers were pulled in September.

Companies can often seem deflated when suitors walk away but Kentz is an exception. The group has had an extremely strong year, Brown believes next year will be even better and City analysts agree.

They expect profits to rise from $105million (£65million) in 2012 to $114million this year and $132 million next (the group reports in dollars because the oil sector transacts all its business in dollars).

Dividends are expected to rise from 9p last year to 11p for 2013 and 13p for 2014.

Kentz is doing well because it operates in major oil and gas hubs, including Australia, America and the Middle East, and provides services that few other engineers offer.

Midas verdict: Kentz shares hit 585p in August when bid fever was at its height. The stock has fallen since then but brokers believe it should rise to at least 600p over the next year. Investors should hold, while new ones could also see value at current levels."

[rivaldo] 18/10/2013 07:19

Also from yesterday - KENZ are UBS' top pick in the oil services sector:

"DJ European Oil Services See Ray of Light -- Market Talk

1435 GMT [Dow Jones] European oil services companies have seen a recovery in share prices as earnings downgrades in the sector begin to slow. Sure, earnings momentum continues to be negative, but UBS notes the sector actually saw some small upgrades over the last three months - and also expects a return to growth in 4Q13, as several companies have guided to a better quarter. Still, the bank says the ongoing uncertainty surrounding oil & gas capex budgets means there is more uncertainty around 4Q forecasts compared to previous years. Its top picks are Technip (TEC.FR), Petrofac (PFC.LN), Petroleum Geo-Services (PGS.OS) and Kentz (KENZ.LN). Least preferred are the tubular names Tenaris (TEN.MI) and Vallourec (VK.FR), where UBS sees structural overcapacity in the premium market."

[rivaldo] 17/10/2013 14:33

Nice bounce - and a little detail on the HSBC upgrade in today's Telegraph:



"Meanwhile, Kentz, which recently spurned two takeover approaches, should benefit as investors re-focus on the underlying business that has "one of the strongest growth stories in the sector", the HSBC analysts said, in a note that was released on Tuesday but filtered through to the shares today."

And in the FT:



"Kentz rallied 3.5 per cent to 535p on an upgrade from HSBC, which was part of a 204-page review of the oil services sector.

Amec's decision not to pursue a bid for Kentz gave investors a buy opportunity ahead of growth returning to historic levels, it said.

"Kentz's underlying story is accelerating and, now the M&A story is off the table, we think the market's focus should return to what we see as one of the strongest growth stories in the sector," said HSBC."

[mdara] 16/10/2013 12:22

"... If the talks had not leaked, Amec would probably have been able to reach a price acceptable for the company..."

Sunday Times 13 October 2013

[11023154] 16/10/2013 09:10

Strong here. Well in profits now.

[rivaldo] 16/10/2013 08:04

Exciting start :o))

And HSBC have upgraded this morning, so perhaps that's partly behind the buying:

hxxp://zolmax.com/kentz-co-limited-upgraded-to-overweight-at-hsbc-kenz/124034/

"Kentz Co. Limited Upgraded to Overweight at HSBC (KENZ)

Posted by Tammy Falkenburg on Oct 16th, 2013 // No Comments

Kentz Co. Limited (LON:KENZ) was upgraded by stock analysts at HSBC to an "overweight" rating in a report issued on Wednesday, Analyst Ratings Net reports. The firm currently has a GBX 615 ($9.82) price objective on the stock. HSBC's price target indicates a potential upside of 18.96% from the company's current price.

Shares of Kentz Co. Limited (LON:KENZ) opened at 517.00 on Wednesday. Kentz Co. Limited has a 52-week low of GBX 354.99 and a 52-week high of GBX 600.00. The stock's 50-day moving average is GBX 516.5 and its 200-day moving average is GBX 429.3. The company's market cap is £609.1 million.

Other equities research analysts have also recently issued reports about the stock. Analysts at Liberum Capital upgraded shares of Kentz Co. Limited to a "buy" rating in a research note to investors on Wednesday, October 9th. They now have a GBX 610 ($9.74) price target on the stock. Separately, analysts at Investec reiterated a "buy" rating on shares of Kentz Co. Limited in a research note to investors on Tuesday, September 17th. They now have a GBX 600 ($9.58) price target on the stock. One analyst has rated the stock with a hold rating and four have assigned a buy rating to the company's stock. Kentz Co. Limited has an average rating of "Buy" and an average price target of GBX 606.25 ($9.68)."

[2bluelynn] 15/10/2013 22:50

I don't Post often just sit back and wait, I posted the day before the offer if you look back . As you see from my last postvolume and the chart do non ordinary things, and sure enough we got A bid so I think the next move will be the gap fill so I bet on the chart if you look the gap gets filled pretty quick now.. as long as America stays solvent . Nice close on the chart for Kentz( if you look at the Daily chart that is)Non chartist look no further please .... ..... In the city we all use the old adage and use often on shares -forex ect " teeth are like gaps they get filled " and so often they do . I Look at many charts with gaps up and down . Then wait and watch .. Let's see If it pans out to £5.60 £5.70 ish for Kentz which I think it will Good luck all This is a good solid main holding forMe .

[bones] 15/10/2013 21:08

Encouraging pop in price.

[rivaldo] 15/10/2013 11:03

Cheers phoenix - worth noting the broker comments:

"The recent contract momentum saw brokerage Liberum Capital update last week that "recent contract awards, plus the normal growth in existing contracts, give good visibility for 2013 revenues, hold out the prospect of improved margins in 2014 (as a result of new technical support services work) and confirm the strength of customer relationships".

The broker also noted that it was bottom of the Bloomberg range for earnings per share in both 2014 ($cents69) and 2015 ($cents71) but that it still derived a 610p target price "based on a blend of our 630p DCF value and a target one-year ahead EV/EBITDA multiple of 7.4x" (noting other oil service shares typically stand on 6.5-7.5x). It added "our forecasts will be too conservative if Kentz can convert material components of its bidding pipeline into contract awards and almost any acquisition is likely to prove earnings accretive".

In this latter regard, analysts at UBS "estimate at end 2013 Kentz will have $100m of surplus cash (i.e ex customer and operating costs), alongside this we think the company could lever up to 1.5x EBITDA. Assuming the company levers up to 1-1.5x 2013 EBITDA we think this would add ~15% to Kentz's 2013 EPS. Assuming 11x P/E (still a discount to the European oilfield services sector) this would generate a valuation of 650p".

Management has said that if a suitable target is not found it will look to return cash to shareholders, though the organic underpinnings here were outlined by Oriel Securities in August;

"It shouldn't be a surprise that Kentz has become an attractive target; it offers high growth, a robust balance sheet, a good track-record for execution, and a long list of blue-chip clients. It prides itself on its ability to deliver complex projects in challenging environments, which often means there is a lack of competition for work."

There thus looks to continue to be much for shareholders here to be positive about. Buy."

[phoenix1234] 15/10/2013 07:56

Steve Moore Buy tip

www.shareprophets.advfn.com/views/1971/kentz-update-following-end-of-offer-period-recent-contract-awards-buy

[rivaldo] 14/10/2013 07:26

Remember that KENZ have a $180m cash pile against a £600m m/cap, and the cash should grow hugely over this more cash-generative H2.

We can expect significantly earnings-enhancing acquisitions soon imo given all the signals coming from the company, which could trigger an upwards re-rating.

Meanwhile, yet another Qatari contract win this morning:



"Kentz awarded EPCm contract with Qatar Shell GTL Ltd. in the Middle East

London, 14 October 2013 - Kentz Corporation Limited (LSE: KENZ), the holding company of the Kentz engineering and construction group, is pleased to announce the award by Qatar Shell GTL Ltd. for EPCm services on the GRVE Integrity Improvement Programme, at the Pearl Gas-to-Liquids (GTL) plant in Ras Laffan, Qatar.

The contract, building on Kentz's previous work on Pearl GTL will be executed by the EPC Business Unit and will run for the duration of three years until 2016. This enhancement programme consists of upgrades on both the Feed Gas Processing Unit (FGP): sour water service and the UTL: acid hydrochloride and hypochlorite system.

Pearl GTL, a partnership between Qatar Petroleum and Shell, is the world's largest GTL plant and one of the world's largest, most complex and challenging energy projects ever commissioned. It captures in one project an extended gas value chain starting from offshore subsurface development, through onshore gas processing to natural gas, to the conversion of natural gas to hydrocarbon liquids, to the refining to finished products and storage, and finally to the dispatching and worldwide marketing of unique GTL products.

Tush Doshi, Chief Operating Officer, EPC for Kentz commented: "Kentz was awarded its first contract on the Pearl GTL plant back in 2006 and we are delighted to continue our strong working relationship with Qatar Shell GTL Ltd. EPC process services are a key area of focus for Kentz's continued growth, and this award builds on recent demand in the Middle East and other regions for our engineering expertise.""

[cumnor] 13/10/2013 22:23

Agree, bones. If someone wants Kenz they know they will have to pay. What we have had were opportunistic bids in a nervous market but investors aren't letting go of quality companies cheaply. The business is growing and in a good place. Kenz can and will do a lot better. With tight shareholdings expect some disagreements over strategy for a while (and shuffling of bod) but all in all v positive. imo (Ps I expect more realistic, much higher agreed bid soon) dyor

[bones] 13/10/2013 22:10

Not necessarily a "bad thing" as some suggest. After a couple of bids, there is inevitably some talking to be done and most likely some shaking up to be done as strategy is revised to either defend against future bids (if KENZ wants to stay independent) or increase the value of the company for a later acceptable bid (if KENZ wants to maximise an exit price). Nothing in the article is a surprise to the markets IMO.

[2bluelynn] 13/10/2013 21:51

Not sure that sounds to positive ..I always think trouble at the top is trouble with the share price !!

[zoolook] 13/10/2013 20:59

It was low on quotes and talked about "sources close to the situation"

[pyemckay] 13/10/2013 19:48

the company have been instrumental in letting us know of the small contract wins recently. Larger contracts coming to an end really need to be replaced with the larger style contract imo.

watching with interest as board disharmony always leads to concerned shareholders and may affect price negatively.

watching brief here..

[shroder] 13/10/2013 17:46

Is anyone quoted from the company in that article?

[rmillaree] 13/10/2013 14:58

Hmmmmmmmmmm - i don't like the sound of that bit about large contracts nearing completion.

[zoolook] 13/10/2013 12:47

In Sunday Times today

Headline: "Kentz seeks new director amid signs of board split"

Talks about split between Chairman and CEO on selling Kentz to AMEC and that if the news not leaked then AMEC would probably have reached a price acceptable to the company. Says there is a formal search for a new director in aftermath of scuppered deal. Its not made clear exactly what the new Director's function would be but alluded to focus on future growth in face of current dependency on large contracts that are nearing completion.

[chickcrumbs] 10/10/2013 11:21

Oh well had hoped to get my second tranche at a bit lower than my first:-/.
Still happy to hold and see how things pan out.

[rivaldo] 10/10/2013 08:52

Above 500p now.

Cheers for the Oriel note revoman. With all the recent contract wins it's about time one or two brokers started to raise their estimates.

[revoman] 10/10/2013 08:22

Oriel Securities note yesterday:

§ Kentz this morning announced a new award from Qatargas for TSS services relating to the Qatargas Laffan Refinery Phase 2 Project.

§ This is repeat work from Qatargas, following an EPC infrastructure contract on Phase 1 in 2009, and the framework agreement signed at the end of 2011.

§ No value is given for the contract but we estimate it is worth in excess of US$50m. We are making no changes to our numbers at this stage, which are c5% ahead of consensus in 2013.

§ Kentz is currently trading on a 2013 EV/EBITDA of 5.0x versus the sector on 7.3x (2013 P/E of 10.9x