Petrofac Share Discussion Threads

[2ngh] 12/12/2013 11:21

1040 coming?

[sigala] 08/12/2013 16:29

Salpara,

In their recent capital markets day, CEO Ayman Asfari was asked by an analyst about the Foster Wheeler rumours - he categorically denied they are going to bid for them.

I think PFC are focussed on organic growth, through their Integrated Energy Services division, and also their new Offshore Capital Projects business which is a particularly bold development, I would say.

They have made a couple of modest acquisitions to bolster their offering offshore, and they are also headhunting some key people to fill various skill gaps that they have identified in their offshore division. Their most eye catching signing would be Yves Inbona, who was previously the COO of Saipem SpA, and headed up Saipem's offshore business.

Also, very bold are PFC's plans for its $700m multi-utility offshore installation vessel - the Petrofac 6000. Its going to be a bit of a beast this one, featuring a 2000 tonne J-Lay tower and a 5000 tonne main crane. The boat is due for delivery in 2017 and is going to be a major capital commitment for PFC, so I would say they have their hands pretty full already. I would be surprised to see any major acquisitions by PFC, but I guess you never know.

Incidentally the Capital Markets Presentation is well worth listening to for anyone seriously interested in PFC. The management talk in some detail about where they see the business going. It is 2hrs40mins long though! The presentation is at:



regards

[salpara111] 08/12/2013 11:02

I would much rather they try and grow organically than make an acquisition.

[hatter2] 06/12/2013 12:41

Salpara from my perspective I prefer to forget the 2015 target Petrofac set themselves and just take a view now of what we see in terms of value and prospects going forward. This is in my view, how the company will be assessed in the next 12-24 months when the original stretch 2015 target has been seen for what it was, just a target.

To my view we have a good business here that is growing well and offers, again in my view, excellent prospects:
From - PE(f) 9.7
Yield 3.6% and appreciably increasing each year
ROCE: very impressive

This one is a bit on the edge for me as a holding as one of my usual investment criteria is a Piotroski of 7 or higher. I would be tempted to buy more but still have that little niggle in the back of my mind. I will therefore wait until we see some positive momentum over a sustained period before I top up.

[salpara111] 06/12/2013 12:24

Just read today's FT and there is a small article referring to the big drop yesterday and they put it down to the capital markets presentation.....according to the FT the company guided to a fall in margin of 2% on 70% of their business by 2015 which would mean that it would be virtually impossible for them to hit their much touted target of doubling pretax earnings.
Bounce back today would suggest that others are less concerned!

[hatter2] 06/12/2013 12:12

If you have a look at the video presentation from 5/12/13 you will see the CEO explaining in some detail what lay behind the interim management statement of 18/11/13. He then goes on to explain the low margin or below cost bidding by competitors and the effect on the 2011, 2012 order book. However, he goes on to say the order book has improved and there is still a chance of meeting the original stretch target they set themselves a couple of years back. The impression I got was that it will be a real stretch to hit the 2015 target but results will still be good. Hence possibly part of the reason for the mark down yesterday.

[minsky] 06/12/2013 11:57

The Indian Mars project cost $73m

[nobbyx] 06/12/2013 10:46

Lol. Spaceships come cheap compared to big modern deep-water construction vessels.

[5bag] 06/12/2013 10:41

It's a bold move by PFC IMO. Concerns that the cost is more than a years earnings are unfounded. It will be several years before the vessel is ready and they should have a backlog of orders for it by the time its ready to go. The initial costs should be paid within a few years of constant revenue-earning service. It adds new capabilities somewhat, whereas an acquisition of the Foster Wheeler engineering division (for example) wouldn't, that would just augment existing capability. I like it. Showing some bold initiative.

[salpara111] 06/12/2013 09:42

What sort of ship costs 700M????? A Spaceship?
Given the bounce back this morning I am guessing that the big players still see this as value at the current level.

[topdoc] 05/12/2013 21:03

They want to buy a ship for 700 million.Looks like some players do not like this

[salpara111] 05/12/2013 17:04

Have to say that whatever was said at the meeting today can't have inspired confidence given how the share price collapsed in late afternoon.
Glad I kept my powder dry but keeping it on my watch list as I am struggling to find prospects for some cash at present and this should be a decent longer term play.

[hatter2] 05/12/2013 16:10

I already have a significant holding of PFC within an ISA and they are about 10% down from purchase. Normally I would be tempted to add following the price fall today but as a holder I feel rather uneasy: is there more less than encouraging news or are will in a short selling grip?

Think I will sit on my hands for the present time.

[fozzie] 05/12/2013 15:25

Capital markets day going well then?

[rimmy2000] 05/12/2013 15:00

sold 4/5ths of my holding as am worried it will go lower before it turns up. Hold a few in isa now

[haywards26] 05/12/2013 12:20

If it falls further I would look at a top up :)

[salpara111] 05/12/2013 09:41

Have not got in.....rather surprised by the lack of strength here, still reckon that current share price is fair value.

[salpara111] 03/12/2013 14:02

Yes...I was thinking of putting money in here as a relatively safe place to hold some cash until I see a better opportunity.

[deanowls] 03/12/2013 11:58

I ve dipped back in, see it as quite safe (famous last words) until something more catching comes along.

[rimmy2000] 03/12/2013 10:09

i think just moving with UKX, abcd1234,

[salpara111] 03/12/2013 09:46

Glad I waited to see how it reacted since the contract win....have to say I am surprised to see it back below the 1200 line, not clear why but am inclined to dip my toe in today as the yield is not bad.

[abcd1234] 03/12/2013 09:41

other than just sector weakness, any views / info re this mornings drop ?
t.i.a.

[5bag] 01/12/2013 10:26

Valuations for outfits like FW can vary massively. It's very easy to get caught and end up overpaying for them. PFC doesn't really need them unless its too cheap to pass up. The 'realistic' NAV of these outfits is low compared to their turnovers etc.