Kentz Share Discussion Threads

[dr_smith] 25/3/2014 17:18

For your beliefs Simon (16/5/14):
hxxp://www.kentz.com/investor-relations/financial-calendar.aspx

[simon42] 25/3/2014 16:46

Next interim statement early May I believe.

[painter] 25/3/2014 15:47

Thanks for the insight bones hope you're right.
GLA

[bones] 25/3/2014 12:09

painter, usually when a set of new institutions want to get in, the price is "worked" down to facilitate a good price.

APAD, you clearly have a better working knowledge of these things and I am not about to argue. I based my comments pretty much on what Kentz told us at the time of the acquisition. Sneaky of them, eh?

[painter] 25/3/2014 11:55

Strange that the share price has not pushed on today after the 8% plus intra yesterday, it finished up only up 2.9% albeit a down day and today it's off 2%.
Great story here but why has the reward disappeared, especially when the market is up today?

Please don't tell me to be patient (I will be). I can't see too much profit taking and I don't think that all the good news is priced in. The fracking element provided by the Valerus acquisition is going well and will spill over into many other countries where Kentz operate, giving Kentz a competitive advantage.

Any Ideas what's holding it back?

[rivaldo] 25/3/2014 11:46

Canaccord have today increased their target price to 850p.

HSBC have increased to 832p.

And UBS have increased to 820p:

[rivaldo] 25/3/2014 10:18

Good write-up in the Times, though with forecasts increasing to around 61p EPS they're a little behind the "times" as the current year P/E is only 12 now:



"Kentz has added a billion dollars' worth of work since the start of the year, which suggests that the difficulties in the oil and gas sector are not weighing too heavily on the company. It also means that about 85 per cent of this year's workload is, potentially, already booked.

The company is enjoying the fruits of earlier bids on big projects such as the Ichthys liquefied natural gas project in Australia feeding through into workload, with the backlog now standing at $4.1 billion. This may sound a lot, but it is estimated that the oil and gas industry lays out about $700 billion on capital spending each year. The amount of potential work out there not yet signed up rose by 23 per cent in 2013 to $16.3 billion.

These numbers, rather than last year's trading, are behind the 21½p jump in the Kentz share price to 754½p. Revenues last year, though up 6 per cent, actually undershot expectations because of delays in awarding contracts by an unnamed client in oil and gas in East Africa.

Pre-tax profits came in 12.6 per cent higher at $118 million. The company is raising the dividend by a hefty 21 per cent, a final of 10.9 cents making a total of 17½ cents.

The market is being guided to raise its expectations of earnings for the current year by 5 per cent. Kentz is confident that it can raise revenues in key areas such as the Middle East and Australia by a third this year as that extra workload comes through.

In all this, the purchase of the process engineer Valerus Field Solutions in January looks well-timed. This takes Kentz further into the American market, it allows that business to be introduced to its existing clients and it broadens the range of services that the expanded group can offer.

The $435 million purchase price was raised entirely from debt, with no recourse to shareholders, an indication of how much easier it is to get funds from banks for the right deal. The shares have advanced by about a pound since I suggested in December that they should be bought on the back of the purchase.

Kentz has enough cash in the bank for its immediate needs. The risk in such businesses is always that one or more projects may go horribly wrong, but its record is a strong one.

The company is spread across 30 countries and gets its clients from across the oil and gas industry. The shares sell on almost 13 times' earnings and do not look quite as cheap now, but at the very least they warrant a strong hold."

[apad] 25/3/2014 09:04

bones,
Couldn't disagree more.
V is half of a US company started by a couple of engineers who sold out to a very big investment company who populated it with suits that now need to be weeded out and replaced by an engineering engineering culture, rather than a buy companies sell companies culture.
See my earlier posts at the time of the takeover, including comments by people working for V.
K is not a holding company, like ITRK/JDG, that run standalone operations.
apad

[bones] 25/3/2014 08:44

APAD, my understanding of the Valerus acquisition, broadly, was that it hardly needs to be integrated because it is so "stand-alone" in business and location. It won't impact on non-North American activities that form the bulk of the rest of KENZ's business. So, I am not to concerned about the integration element.

Yet it provides a store room of expertise as shale spreads across the globe. While shale is a boom industry in the US, it ought to do well.

[revoman] 25/3/2014 08:38

IC VIEW:

These results have convinced some institutional analysts to re-assess their forecasts for 2014. Kentz's shares now trade at 12 times Investec's adjusted 2014 estimate of 101¢, and its multiple of enterprise value to operating profit is in line with the historic average. Although another takeover approach can't be ruled out, we keep the shares on hold.

[apad] 25/3/2014 08:27

Good call W, was he wearing clothes?
My earliest trade was at two quid and the last one was four quid. I buy in tranches. K has rocketed to the top of my portfolio (now above AZN that I have held since ICI days:-)), having been a small company speculative buy.
TRCS looks to be going the same way - a lot to be said for infrastructure support companies with an edge.
I shall still watch the news on Houston with care. The tintins have been glamoured by the order backlog.
If Houston is integrated without problems K could be a growth company for a few more years, followed by a 'progressive dividend policy' to create that holy grail of a company - one that pays more in dividends per year than it cost me to buy the shares in the first place.
apad

[whizzy1] 25/3/2014 08:10

Interesting fact about Robbie aka Naked Trader, after reading his book, I travelled down to Heathrow for one of his early seminars (I'd recommend going btw) where he spoke about a Co. that had recently IPO'd, he said it looked like a great company, still under the radar, with no cover and described it as akin to "the store where gold miners rushed to buy picks and shovels from" He said it was one to watch and he had invested himself. The company obv was Kentz, and luckily for me, I was the only other person in the room who had even heard of them and had actually bought in a week earlier. The most successful trade I've ever done @129p.

[mirabeau] 25/3/2014 07:56

Jersey-based Kentz has gone from strength to strength since Amec walked away from its indicative 565p to 580p a share – or £680million – offer for the oil and gas engineer in September, and German engineer M+W then said that it had abandoned any plans to make an offer.

Its shares touched a record 794p yesterday before closing 21.5p better at 754.5p following excellent results and a bullish view on prospects.

Full year results were in line with expectations, with revenues up 6 per cent at £1.01billion and pre-tax profits 12.6 per cent higher at £715million. The dividend was hiked 21 per cent to 17 cents.
Yet what really floated analysts' boats was the order book data. The backlog at the end of February was £2.5billion, up a staggering 58 per cent since December 2012 and well up on the £1.9billion at the end of December 2013.

The pipeline is now 18 per cent higher at £9.4billion, and last December's £264millio acquisition of US process engineer Valerus now looks to be a masterstroke.

Neill Morton, analyst at Investec, lifted his target price to 810p from 775p following the figures and after management said it sees growth in 2014 across all its geo-markets and its three business units.

Indeed, performance is expected to be ahead of previous expectations. He increased his earnings per share forecast by 5 per cent for both 2014 and 2015.

Kentz's major 13.6 per cent Malaysian shareholder Kerbet, which took control of the company in 1994 after it collapsed amid financial difficulties, might have been a bit miffed to see potential bidders walk away last year, but must now be as happy as Larry.

Read more:

[rivaldo] 25/3/2014 07:53

A tweet from MGW suggests yesterday's investor meetings went rather well :o))

"@mgrahamwood: Very positive meeting at Kentz, firing on all cylinders and order book stunning with more to come. Still my favourite service co even here.

- See more at: hxxp://www.malcysblog.com/#sthash.QMy60QhX.dpuf"

[whizzy1] 25/3/2014 07:44

Looking good.

[bones] 24/3/2014 21:03

Blog in FT (second section of blog):

[bones] 24/3/2014 20:43

Article in FT:

[spudders] 24/3/2014 19:01

Whizzy, if you don't mind me asking is your day job in the building.

[gswredland] 24/3/2014 18:42

Interesting to see that the naked trader has tipped GMS another oil services group.He is also a long term fan of KENZ

[whizzy1] 24/3/2014 17:55

So I was telling the lad I work with, if I was 'greedy' and didn't sell up after an 8% rise, I'd regret it when I get home due to profit taking. Yep still holding and yes a slight regret, nevertheless still a good rise and £8 here in the very near future.

[apad] 24/3/2014 16:45

Quality and depth of the order book means that Valerus integration and improvement can be well managed.
apad

[cheaky monkey] 24/3/2014 16:31

Yep, fair point I suppose, just getting greedy!Greed Is good remember! LOLCm

[jeffian] 24/3/2014 16:28

You're asking a lot given that it's a pretty dire day in the wider market. Holding up pretty well, considering.

[cheaky monkey] 24/3/2014 16:20

Bit of a harsh intraday fall! Hope for a bit of bounce before the close.

[bones] 24/3/2014 13:38

This chap, Malcy, is always a solid read in oil and gas matters and he has a very soft spot for Kentz. ADVFN will not allow a link here as it is a competitor but if you change the zero to a letter "o" after the "www.pr" and paste to your browser you should be in luck. Seems Malcy will be reporting from the analysts meeting tomorrow.