Kentz Share Discussion Threads

[rivaldo] 20/11/2013 09:24

Note the visibility of income through to 2016. The City loves this kind of security going forward.

[kam5lc] 20/11/2013 09:21

Now we can see why the recent takeover was rejected. Much more value in the company than anticipated

[11023154] 20/11/2013 08:23

Wow, very impressive.

[apad] 20/11/2013 08:08

Rather underlines the statement Riv.
FWIW: out of AMEC yesterday. Staying with KENZ.
apad

[rivaldo] 20/11/2013 07:29

KENZ on a roll - another contract win announced today, and it's a biggie at $190m. The comments hint at more to come:



"Kentz awarded US$190 million contract with Qatar Petroleum

London, 20 November 2013 - Kentz Corporation Limited (LSE: KENZ), the holding company of the Kentz engineering and construction group, is pleased to announce the award by Qatar Petroleum (QP) for the engineering, procurement, installation and commissioning for wellhead industrial control systems, alongside corrosion protection, for approximately 775 wells across the Dukhan Oilfield, Qatar.

The contract, valued at US$190 million, builds on Kentz's previous working relationship with QP and will be executed by the Engineering, Procurement and Construction (EPC) Business Unit, running for the duration of three years through to 2016. The peak workforce will consist of 800 staff and field personnel.

Kentz will provide a dedicated Supervisory Control and Data Acquisition (SCADA) network infrastructure to monitor wellheads from designated stations; providing centralised real time and historical wellhead data directly into QP's IT network. Kentz's scope of work also includes the prevention of external corrosion damage to the well casings in the Dukhan field by installing an impressed current cathodic protection system.

Tush Doshi, Chief Operating Officer, EPC Business Unit for Kentz, commented:"Kentz was awarded its first project with QP in 1997 and since then has continued to execute numerous EPC projects, engineering and enhancing QP's assets. We take great pride in this significant award. The past year has seen a huge progression in our engineering offering as we implement our 2013 & Beyond strategy and we are confident of continued strong bidding in EPC." "

[steeplejack] 18/11/2013 15:10

With the oil sector and related stocks being dog-eared recently,i think Kentz are being somewhat held back by association. It occurred to me too,that Petrofac must be envious of Kentz.Afterall,Petrofac was the market darling in this area a couple of years back.
Also,think the dividend discussion is spot on and am sure that management will have similar thoughts.A progressive dividend policy will bolster defences.

[rivaldo] 18/11/2013 14:27

Exactly roddiemac.

Here's the text of Investec's Buy rec today:

"Kentz (KENZ.L)
Kentz (Buy - TP: 600p)
United Kingdom | Oil & Gas

A textbook IMS highlights very strong order intake

Few European oilfield services companies have emerged unscathed from the
raft of reduced guidance in 2013. Kentz stands in splendid isolation. This is
doubly impressive given the potential disruption from the bid approaches
over the summer. Order intake since end June is very strong and doubledigit
EPS growth for 2013 is reiterated. We retain our 600p target price and
Buy recommendation.

Strong order intake: This has increased from $1bn in H1-13 to $1.8bn by
end-October. Kentz has won new contracts in new markets, for new clients as
well as repeat business from existing clients. It also hints at "a number of
exciting awards before year-end". This could include further packages at
Ichthys LNG.

 Increased backlog. The backlog has further increased, from $2.8bn at June to
a record $3bn at end October, already achieving Kentz‟ year-end target. The
bid pipeline is also higher, from $15bn to $15.2bn over the same period.

 Earnings growth reiterated: Divisional commentary is as expected and
overall trading is in line with expectations. The high-margin TSS business
remains the star of the show (Canada, Middle East). Kentz reiterates it expects
to achieve double-digit earnings growth in 2013 (we forecast +13%).

 Cash and cash returns: Net cash is expected to increase from the £214m at
end June (of which „own‟ cash was $180m). Kentz is still considering
acquisitions but repeats its aim of returning some cash if none is forthcoming.

 Valuation: Kentz is one of the few OFS stocks in the sector likely to deliver
double-digit EPS growth not only in 2013E but also in 2014E as well. Its order
backlog (see above) is low risk and yet, even at our PER-based 600p TP, it
would still be trading on a 2014E P/E discount of 8% versus the sector on an
ex-cash basis (11x vs 12x sector average)."

[roddiemac2] 18/11/2013 12:10

rivaldo, I am up about 50% from my average buying price. Those that took a quick profit and then reinvested ,--well done : how many did that? Long term investors will be rewarded . The story here is very strong and that is what matters. The price will catch up at some point.

[haywards26] 18/11/2013 11:23

Petrofac also issued a trading update today, which has disappointed the market due to slowing growth in part from delayed projects. Thinking about it Kent would be a perfect acquisition for PFC!!

FYI - I bought into PFC today, so a holder of both companies.

[jeffian] 18/11/2013 11:03

Agree with you both and particularly about the divi, APAD. Last year's divi was covered 4x by earnings whereas most companies are happy with 2-2.5x. One shouldn't underestimate the power of dividends to support the share price - most institutions recognise that they underpin a fundamental proportion of their targeted annual returns and most private investors crave a decent return on their cash while interest rates are next to zero - and KENZ could certainly afford to be more generous as they are both ungeared and cash-generative.

[rivaldo] 18/11/2013 10:59

Cheers APAD. I'd rather KENZ used their cash pile for an acquisition, but certainly I agree that raising the divi by a decent amount is also within their compass.

Investec have today reiterated Buy with a 600p target:

"Kentz (Buy - TP: 600p)

A textbook IMS highlights very strong order intake - Buy

Few European oilfield services companies have emerged unscathed from the raft of reduced guidance in 2013. Kentz stands in splendid isolation. This is doubly impressive given the potential disruption from the bid approaches over the summer. Order intake since end June is very strong and double-digit EPS growth for 2013 is reiterated. We retain our 600p target price and Buy recommendation."

[apad] 18/11/2013 10:43

Agreed Riv (40% over the last 6 months and within 10% of bid price is very respectable).
Time for some serious divvy increases methinks.
KENZ looks respectable now - rather than a tiddler transferring markets, with something to prove.
Clarity on cash flow would be good.
AMEC tomorrow (I've been reducing my holdings recently, because of nuclear lead time).
Different animals I know, but same sector dependence.
apad

[rivaldo] 18/11/2013 10:25

KENZ is up around 40% on my average buying price, so I'm perfectly happy with KENZ' "predictable" share price reaction over the last few months. All those who were predicting gloom and doom following the lapsing of the bid have been proven totally wrong.

In addition, the share price is up 9p today in what is a pretty miserable market overall, with a number of companies announcing profit warnings or just downbeat narrative.

The share price is basically up to where it was for the bid. Give KENZ a couple of days with the market being positive, or one of those new contracts hinted at today - or possible American buying this afternoon following this IMS - and let's see where the share price ends up.

[nhp5] 18/11/2013 10:04

Superb IMS as always, and equally UN-impressive share price reaction as always, yet again... Such a shame but KENZ despite its brilliant business, prospects and results, without fail disappoints on the share price Not justified but unfortunately very predictable.

[steeplejack] 18/11/2013 07:41

Yes,it all looks excellent which is no guarantee that they'll mark the shares higher!

[bones] 18/11/2013 07:27

Can't ask for much more. Intriguing lack of comment about the recent bids by Amec and M&W. Sherlock Holmes might draw your attention to such a silence!

[rivaldo] 18/11/2013 07:16

Excellent trading statement today - really confident and positive.

The comment that KENZ has performed "very" strongly recently is interesting. The "very" suggests to me that for the year end we may well get a "beating expectations" trading statement.

And there are "in excess of 60% of orders for 2014 under contract", so next year is already looking good.

[dr_smith] 15/11/2013 20:52

Thank-you for your swift reply and link Hyden.
I did look at their website but was looking in the wrong place.
It can be hard to track each event date for portfolio, so tend to go for central diaries.
Checking 2 different diaries I'd have thought I'd cover any ommissions, but this proves that 'Investor relations' folks don't always relate to outside world. ;-)

Thank-you again, I now know to be sat here before 8am Monday to digest and cogitate..and have a coffee.

[hyden] 15/11/2013 20:32

DR, Most companies now declare the financial calendar on their websites:

hxxp://www.kentz.com/investor-relations/financial-calendar.aspx

KENZ Q3 IMS is indeed on Monday

[dr_smith] 15/11/2013 20:28

Hi Sheyac and Steeplejack.
Update on Monday?
Can't see that on my regular sources, Digital Look diary and LSE diary, so looked at co. website and can't spot.
Presumably it's a Q3 IMS.
May I have your diary link please, as my sources seem to be lacking.

[steeplejack] 15/11/2013 17:13

I presume someone thinks that the results and update won't be earth-shattering.Nowadays though,does it really matter.You can't run with the prop book,MM hounds and hope to win.You've got to play it long term as a private investor.Most of the books operating in the City nowadays who nip in and out for a few hours trading,if not minutes,could just as well be dealing in bananas.
Oh,if the results are unexpectedly poor,then even worse,we can presume that bad news has leaked and that's not very good either.

[sheyac] 15/11/2013 15:52

Is this a shake or are results expected to be bad on Monday?

[rivaldo] 12/11/2013 14:21

Here's KENZ' news release from yesterday - the Tengiz field is "vast", and a 5 year contract should provide large and secure work going forward:



"Kentz awarded five year construction contract in Kazakhstan

London, 11 November 2013 - Kentz Kazakhstan LLP, is pleased to announce the award of a five year multi-discipline contract for construction services by Tengizchevroil LLP (TCO) to support the continued development of the Tengiz oilfield in Kazakhstan.

Kentz will be providing structural, mechanical and piping (SMP) construction services, pipelines repair and construction services, and its expertise in electrical and instrumentation (E&I) construction. The contract will be executed through the Construction Business Unit.

The Tengizchevroil LLP joint-venture was formed in 1993 to develop the Tengiz and Korolev oilfields. Chevron has a 50 percent interest in Tengizchevroil. Other partners are KazMunaiGas, 20 percent; ExxonMobil Kazakhstan Ventures Inc., 25 percent; and LUKArco, 5 percent.

Eoin Hurley, Chief Operating Officer, Construction for Kentz commented: "Our team has been on the ground in Kazakhstan in order to build the presence required to successfully tender awards such as this and being selected to work with Tengizchevroil on the vast Tengiz oilfield project is a great achievement. There is no set value to this contract as its foundations are on the provision of construction services when required." "

[rivaldo] 12/11/2013 14:02

Interesting comment an hour ago - more business coming KENZ's way:

http ://www.proactiveinvestors.co.uk/columns/the-pay-zone/14619/the-pay-zoneoil-price-hunting-kentz-corp-gulf-keyston-and-finally-14619.html

"Kentz Corp (LON:KENZ)

Not normally a company to hide their light under a bushel, Kentz has released -but only to the trade- the award of a five year contract in Kazakhstan for construction services for the support of the continued development of the Tengiz oilfield.

The reason for not announcing is that as a framework agreement it technically carries no value and accordingly the company might be accused of announcing anything that comes in, I personally consider that value or none, this is another string to their bow and they should be congratulated accordingly.

Kentz has continued to recover from AmecGate and I remain very positive for the longer term, don't forget that if they don't make an acquisition themselves I expect a distribution to shareholders...................."

[steeplejack] 11/11/2013 16:43

Price now back to level immediately prior to the RNS signalling end of offer period made on a Sept 13th.