Gulf Marine Services Share Chat (GMS)

Yes pbody I am where else do you think I’m going,I’m almost at silk street ...I will ask those questions

off the top of my heed I think it was 13.5%
or 17.5%
might even be 13.45%
they had aimed for 25%

How many % of shares do they currently own....

Assuming ned is going.
Mine would be how do you expect to save 30% on daily operation expenses.
I would guess GFD would be about loans ?
The other I would think of;
My other question would be who owns what?
with the SP so low there is a chance that someone could offer 38pps and buy the whole company!
Were not even sure who owns what or where the share are to stop that sort of thing.

if you are nedhammer we will try and come up with 2 questions.
let us know what time you need them for?
there might be a few of us and we will try and keep it simple and put 2 forward between us on here.
I am sure others will read this.
gfd will I am sure.
ssb1 is around I think.
I will make a new heading .
give us a time cut off. 9.15 sound about right?

Take it you are going to the extraordinary meeting?

F ing not fingers ffs lol told ya I woz fick

Pbody not fingers production lol

Production any questions you would like me to ask at the GM today..... keep it simple like me please

Am I right in thinking it has a fairly sizable crane on that? At 1500 tonnes?
I did a rough calculation looking forward on straight EBITDA for market cap (truly ridiculous as EBITDA is nominally 1/7th 10 1/10th of market cap.
At 80 million the SP is 23p (161p at 7 times).
Best of luck for the week.

TimmyTradeface...to answer your question: Because not all the vessels are equal and because the market is more interested in big class vessels atm.

In other words, it’s easier to find a contract for Seafox 5 than for a small class vessel. GMS has got 4 large vessels, 4 mid-size and 6 small size. If the 4 large and 4 medium sizes are all contracted and only a few of the smaller size were off contract, then the addition of Seafox 5 wouldn’t have been dead weight.

I need to add that with the sale of Seafox 5 by Seafox they ended up with a less attractive fleet, whereas GMS still got a good number of newer and better-maintained vessels.

It was something GFD mentioned could have been bought with a shariah loan a few years back.

I presume they were looking a using it for offshore wind farms or some such and decided against it.
As you say (its not a stupid question) there can be periods where the work has to wait until the boat becomes available. Or it can be a dead weight. I know it is similar to the ones already used by GMS.
It might have even been thought they could supply a pair and speed up time to completion of a project?
I dont know if there were others they would purchase.. But at the time the finances indicate the work was waiting for the ships. Not the ships waiting for work. With CO2 bargaining and renewables this could literally be political will (or party elected) or timing of elections that have some knock on effect on that score regarding contracts.
There are some heavily subsidised schemes (and quite rightly)

I just thought I would throw it in. At the moment with the low day rates paid it would take another ship to get the revenue back up to 225 million (219 before iirc)
must get to bed now. it will be an interesting week.

Nor does HL list the other big Buy as shown in the LSE Trades. I'm tempted to say that any idiot can distinguish a Buy from a Sell on the margins shown in the, incomplete, reported trades on HL but, clearly, someone can't! There's often a problem distinguishing Buys from Sells when the spread is tight or when the Trades are skewed, relative to the published Buy and Sell prices (algorithms don't always work!) - we see that often here on LSE. The time will come when mm's have to report Trades as either Buys or Sells. Let's all hope that day comes quickly. The technology already exists. I'm intrigued by your assessment of what Seafox 5 could have added to revenues, assuming full utilisation, pb. Do you have any information on what other vessels, along with Seafox 5, were part of the fleet that GMS was negotiating to buy from Seafox and what the ballpark figure for that fleet might have been?

I hope this isn't a stupid question but what would be the point in expanding the fleet when the existing vessels are not all utilised? Surely that is just adding more dead weight.

There are so many red herrings to look at here.
just check out this buy marked as a sell! down the bottom of the page.no wonder people panic!
if they hold till the 2019/20 results come in they will have a tidy profit.
https://www.hl.co.uk/shares/shares-search-results/g/gulf-marine-services-plc-ord
btw seafox 5 would have added 22 to 30 million revenue had they acquired and found work for it.

I am rather looking forward to reading the results of the general meeting tomorrow. Whichever direction the shareholders vote, the main thing is we put an end to the distruption and allow things to settle into a new status quo.

Undervalued is the point.If you look back about 6 or 7 posts to the one marked "profitability" after reading this to confirm my point.The over the last year the share price dropped slowly then massively;There has not been much in the way of work (58% utilisation).The banking covenants have not been breeched after discussions with lenders..There is enough work there now to "better than break even" with long term contacts confirmed (and 72% utilisation).There could well be more contracts.There will be cost savings.There are loan renegotiations (probably leading to a better deal for GMS) Even before you take adding new contracts or loan renegotiations this year the company is primed to produce a profit at the of 2019.(I guess around 5 million, Adjust net profit of 30 million, EBITDA of 75 to 80 million, poss 90).Luckily the share price doesn't reflect this......get it while its going cheap. 30;s to 40's looks adjusted back.ROLL UP ROLL IP Cant help anyone more than that looking Monday.or Tues........save you searching a ton of RNS.

Traders come and Traders go. It's in the nature of what they do that they flit from opportunity to opportunity. I'm holding long and strong here, not on the basis of my imaginings but because this Co remains massively undervalued atm, with or without a Shariah loan. It's a quality outfit and, as we all know, quality will always sell.

Thanks again pb. Timing, as we all know, is everything. The Seafox RNS, had it been left any longer with the way that the SP was rising, would have been treated with complete derision, being seen as nothing more than carpet-bagging opportunism and it may well be that, by a process of elimination (of their proposed Resolutions), that's where we've arrived. The initial RNS released by GMS also raised questions of timing. Why, ever, would a dynamite RNS be released just days before the Christmas break? It would have been better left until after the holidays. There was no legal imperative for the information to be disclosed to the public at that exact point in time. It could just as readily have been left until the New Year. Was there some internal spat at GMS? It's not difficult to imagine that there was a dichotomy of views about the expansion of the fleet. The fact that GMS pulled out of the negotiations with Seafox, when Seafox (in need of the cash?) sold one of the vessels involved in those negotiations, suggests that a faction of the BoD didn't want to go down that road. Surely, just one vessel would not have been a deal breaker? Saying that, we don't know how many vessels were involved in the negotiations nor which were key in the minds of the GMS strategists. Our existing loan facility is part Shariah. The plunge in the SP has created opportunities for a number of people in the know and geographically close to the Co to take a position. Mazrui is amongst them. He and his associated finance house are very much the kind of people who are in a position to convert the entire borrowing facility to a Shariah loan, resting their profit take on an improvement in the SP which will be quite majestic if, relieved of debt servicing, Dividends are restored. It's not beyond the realms of possibility that Seafox's shareholding will show them a tidy profit if it ends up in the hands of those who will provide a Shariah loan. Seafox would, of course, have known of the proposed funding process, as a result of the negotiations for the sale of one of their fleets to GMS, and they could, then, proceed with their move on GMS secure in the knowledge that a benevolent financier would be waiting in the wings to take those shares off their hands as an essential element of the loan conversion. In other words, Seafox has used the 'insider' knowledge, gleaned in negotiations, to their own end. It would go a long way towards explaining why Seafox's Statements are less than professional and somewhat vacuous - they're just whitewash, designed to give the appearance of their actions as being anything other than an opportunity to use that privileged information to simply make a lot of money? The BoD is caught between a rock and a hard place in explaining all of this away. Maybe, they won't have to. Maybe the erosion of Seafox's Resolutions has just been a confidence building measure with more going on, behind the scenes, than we can even begin to suspect.

Quote from 26 pages back.
GFD.
"At the time that the Seafox RNS landed, the shares were trading at 20/21pps and rising. It really was an unwelcome intervention. We've yet to hear what our BoD makes of it."

As for the Revenue figures. Seafox 5. Shariah Loans.
The revenue in 2014 was 196 Million.
The revenue in 2015 was 219 Million,
I have not dug deeper nut I think these are around the same utilisation but 2015 having better day rates increasing revenue. I also believe (and again I haven't dug) but it tallies with me rough calculation in the earlier post of 194 Million for 100% utilisation..
Perhaps GMS would have been happy for an extra vessel or even 2. and could have found the work for it?
Perhaps the Shariah loan was aimed at that at the time? the numbers add up.
One thing is for sure.
I am sure if day rates are low and the work isn't forthcoming there are bargains to be had!
Perhaps the refinancing could include buying another vessel on the cheap!
They truly are amazing pieces of engineering.

You're not the outgoing CFO are you? I find it difficult to fault anything that you say, except on some minutiae and I'm not that nit-picking! I have a clear and abiding recollection, however, of the SP being 21.5pps and rising when Seafox released its first, 'unwelcome' (as I described it at the time, I seem to recall) RNS. That caused the jitters to start. What I'm still not understanding is why the BoD made mention, in its last two annual Reports, that it was looking to expand the size of its fleet and, in one of its Statements, in response to Seafox's representations, said that it had been actively involved in negotiations with Seafox for the acquisition of one of its fleets quite recently (Seafox's sale of one of the vessels in that fleet - Seafox 5 - having thrown a spanner in the works). Why? How did they think that they could finance that acquisition, moreover? The implication is that the Banking Syndicate were prepared to extend further lending to allow the Co to increase the size of its fleet. If that's so, then the negotiations with the Banking Syndicate should have a happy ending. Methinks there's a lot more to all this than readily meets the eye. The drop... the plunge... in the SP was way overdone and subsequent events not only bear this out but, as you say, fail signally to be reflected in a correction in the SP. In any other circumstances, the news that the covenant breach had been avoided and that delayed Contracts had been put to bed would have resulted in a significant uplift in the SP. So too would the news of a replacement having been found for you... ooops, sorry!.... the outgoing CFO. For the life of me, I'm not seeing anything sinister and I'm still not seeing any downside. I'm just a tad confused! How can a Co, ostensibly cash-strapped, embark upon negotiations for the purchase of additional vessels and in what way was it imagined or expected that those vessels would not join the others languishing quayside? Was the Co perhaps thinking that it could fund the purchase through the medium of a fundraise of some sort from S/H's, with a buffer built into the amount raised? Shame I can't make it to the General Meeting. The questions, above, are ones that I would have dearly liked to have put to the Co - maybe my Proxy will be able to put the questions on my behalf. Someone needs to ask, IMHO.

mistake mid PROFITABILITY
FOR 2019 (ASSUMING NO NEW CONTRACTS........)
So that equates to around 139 Million Revenue.
Loss/Profit approx.4 to 5 Million.(Not Nil)
Adjusted net profit should be around 30 million. Or better with cost savings.
Adjusted EBITDA of around 75 to 80 Million.

Profitability.

GMS has been around for quite a while and has apart from its 2017 results always made a profit.
It made a profit when there was better than 180 million a year revenue. 30 million in fact.
Last year there was only 112 million revenue. 18 Million loss.
To achieve a base profit the company has to have a revenue better than 135 million I would hazard a guess.
This is where the increased utilisation should achieve this increased revenue.
After all a ship sitting idle is a double headache
1 it doesn't earn money.
2 Its still costs to sit idle.
Adjusted net profit is net profit after adding back non-recurring or non-operational costs.
GMS has made a profit every year taking this into account, however this was 46 million less in 2017 than the previous year. Halving the EBITDA too. Adjusted net profit being just 4.6 Million.
The increased utilisation should increase the revenue. from 58% to 72% according to the RNS.
FOR 2019 (ASSUMING NO NEW CONTRACTS........)
So that equates to around 139 Million Revenue.
Loss/Profit approx. nil.
Adjusted net profit should be around 30 million. Or better with cost savings.
Adjusted EBITDA of around 75 to 80 Million.

In line with my thoughts above. 140 Million turnover. Nil Loss.
With the increased cost savings applied to the 180 million revenue (first 3 years minimum revenue) this could estimate to the Adjusted net Profit to better than 70 Million and the adjusted EBITDA close to 120 Million.
All we need are the contracts to get the utilisation back up to 100%.and a revenue of 194 Million.
There is of course the possibility better financing to reduce costs. Better day rates to increase revenue.
But these are just a simple sliding scale I worked on based on utilisation and past profits/loss.
Just as a rough ball park guide.
Last of 4 posts (couldn't think of an easier way to do that).
I dont for a second think all my comments should be agreed with!

Seafox.

It has triggered al sorts of problems for the board. To the extent the board issued a statement saying if has not been helpful at this difficult time.
Although they state they are not direct competitors there is some overlap and to be honest they have bought a large stake at a bargain price.
My opinion is the price was in recovery it was almost back up to 18p when Seafox offered the 18pps targeting 25% as its goal.
This effectively "halted the price recovery" to within a few pence either side of 18pps.
In some ways at that price it was bound to happen, others in the industry would bound to "want in" I dont think there is a chance of takeover (unless people want to sell heir shares to Seafox at 18pps), it would need over 50% to have control and better than 75 to delist and become private. It could cost Seafox considerably more than it did to acquire more moving forward.
Both of these options would drive the price considerably higher.
The cost savings (apparently of between 15 to 20 million according to Seafox) and reduction in daily opex of around 30% would have tipped to company into profit looking at the last set of figures, that before increased utilisation.
Something to think about. GMS believed these figures to be incorrect.
It is easy to state all sorts of numbers.
The fact there will be cost savings and more importantly the board will see the need to be looking at their expenditure and procedures going forward can only be a good thing.
The fact there is now increased utilisation and that some new contracts have been finalised again WILL ease the pressure going forward.
Even if it doesn't give us all the answers yet. Seafox has started the ball rolling looking at operating efficiencies.
As you rightly say I am sure the BoD will listen to the proposals of major shareholders (what their suggestions appear to be at the moment are operating efficiencies) but there may be other radical proposals such as the refinancing.

The banking syndicate.

The was fair warning that the banking covenants may be broken, If they were then the existing debt could not be offset (reduced in size) against other operating finances.
That would have increase the debt had it been broken (I think the present loan agreement goes out to 2023 iirc).
I did read something about the exact percentages in debt offset somewhere on this loan but this would take a while to find again.

The covenants have not been broken therefore the debt size remains reduced (offset against other financials) so in that respect it was a big problem taken care of.
This has been completely overshadowed in some respects by other news associated with GMS.
When it comes to renegotiating the loan agreement, all we have to go on at the moment is "GMS is in discussion".
As you rightly pointed out there is the possibility if shariah loan.
Perhaps that could be brokered through the present board members?
There are significant shareholders (non board members) who may maybe also able to broker this deal (and who may be appointed to the board) but this is beyond my ability to see if it is a real possibility that the banking syndicate would be prepared to offer such assistance.
The fact the covenants were not breached and the fact they are in discussions with the lenders to renegotiate all sounds positive. I would imagine the long term confirmation of contracts and year end figures and cost savings and increased utilisation might figure into these negotiations? That would be my best guess.
Maybe a board appointee or two on monday could change the situation, I certainly would expect an RNS Tuesday about the vote and the meeting (possibly even late monday).
Hard to say if the Banking syndicate would feel more comfortable with lending changes or change its position with additions to the board?
"in negotiations" would lead GMS to get a better deal at the end of it. Regarding debt servicing. I would think..