The Abu Dhabi based provider of advanced self-propelled self-elevating support vessels has announced another two contracts and an extension of another.
Together with the major contract announcement a month ago for a six-year contract with a National Oil company in the MENA region, these awards are really quite significant for the £58.5m capitalised group.
These contract awards for Gulf Marine Services (LON:GMS), with improved day rates, equate to seventy-eight months of utilisation, substantially increasing its overall fleet backlog and secured revenue.
The group’s fleet of 13 SESV’s serves the oil, gas and renewable energy industries in the Middle East, West Africa, Europe, South-East Asia, the Gulf of Mexico and North America.
GMS Executive Chairman Mansour Al Alami stated that:
“These contract awards solidify our financial position going into 2023 and again reflects positively on the already favourable market conditions”.
Analyst Opinion
Daniel Slater at Arden Capital rates the group’s shares as a Buy, looking for a 20p Target Price compared to the current 5.7p.
His estimates for the current year to end December suggest $135.4m of revenues ($115.1m), while adjusted pre-tax profits could come in at $32.8m ($20.7m), with earnings of 2.5c (2.7c) per share.
The coming year figures look like $143.6m sales, $39.6m profits and 3.1c earnings per share.
Conclusion – could easily double
The market is missing out on the real potential for this stock.
Greatly improving rates and long-term contracts give the group very healthy prospects for growth.
At only 5.7p this group’s shares have an easy potential for doubling in price and still looking cheap.