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Only buys today. That's fine by me...
Thank you Pbody ....
Up early, have to pick up the Master Cutler from Derby.
SP and trades.
Look at right hand side of the trades to see either an A or an O for Automatic or Ordinary.
Its the Automated asks that are NOT their causing the problem. The automatic ask will drive the SP upward.
There are automated bids (causing a drop) but no ask (so no rise).
Hope that helps NED.
If you think GMS is odd with the SP. look at XAR on Friday/Monday.
loads of large sells Friday.....SP goes UP! ???? you tell me!
busy day!
https://www.share.com/investments/shares/21613/gulf-marine-services-share-price#brokerviews
THIS ONE HAS TARGET OF 33PPS
https://www.marketbeat.com/stocks/LON/GMS/
Indeed so, I dont think the days of the investor are over, far from it.
GMS made a 5 million loss, its looking at 6 million in savings and efficiencies.
The day rates are down because of the industry peers being underutilised, the small vessel segment has some slack to take up within GMS. The future should be bright.
The loss being so small I think we are right to be harder than we would like to be to get that figure into profit.
The loans are at 7% iirc
Work being spread out means increased transport costs. GMS pays this and then has to collect it from it service users. That was 3.5 million in interest alone. Then there was the fact there were late payers! That was another 5 mllion iirc.
The exchange rates took another 2 or 3 million off the European contracts.
The total loan interest costs are 28 million.
I think its important to realise 0% interest can save 32 million per year.
Increased day rates would probably add between 60 to 100 million on past figures.
Savings and efficiencies are important, one of the harsh comments made to me by someone who worked offshore was the food costs being the first normally to be cut. Sounds dreadful, but resupply schedules' for fresh food are the first sensible saving. Lets hope there is someone there with a bread maker, but its tinned food usually. It doesn't effect safety, Ship maintenance is too important to be cut as well, along with looking for work.
My point is with a 5 million loss you sometimes do have to be hard across the whole firm (be it management pay or working operations) to get that back to a profit. That's not because I want dividends, Its because sometimes if there is a loss that's less than 5% of turnover emergency cost cutting measures for a couple of years to get into profit are better in my opinion than selling a vessel. Lost revenue will never return if there isn't a vessel there!
I try to see GMS 3 years from now with improving day rates...perhaps foolish and long term.
Anyway, only an opinion, for a while there is likely to be no news expected, I will watch and wait.
typo sorry.
Should read.
In hindsight selling a month ago and buying now would have been a good move. Problem is when this does go up not being onboard is the problem. Management "buy ins" and positives all to look forward too.
Glad you had a good time, Not sure a robin reliant is a good idea in this country anymore as the traffic calming measures now mean you launch into space at more than 5mph! Perhaps this could be explored as part of the post (and delayed again) BRREXIT fiasco answer to Ariane?
Only thing I did notice wasn't mentioned was the banking interest rate. @7%
If this were 4.5% there would be a saving of 10 million per year.
I dont know if you read the article the top exec takes 800,000 per year in wages? The going rate for this size market cap is under 300,000.
In hindsight selling a month ago and buying now would have been a good move. Problem is when this do go up not being onboard is the problem. Management "buy ins" and positives all to look forward too.
Nice one. I like Eastern Europe. Spectacular old towns.
And there’s me thinking you visited Delboyski in Peckham ....... welcome back :-)
Whereabouts you been in Eastern Europe? Hope you had a good time?
The SP keeps a droppin. The total debt and issued value (including market cap) weighting against the true value of the company isn't unrealistic.
EV/EBITDA is a measure of this. If the debt were massively high the numbers calculated would be much larger than 8.7.
The EV/Editda is: 8.68 Most companies are above 12 (15 tbh) and sub 10 means they are probably underleveraged compared to most of the market. (the higher the number normally the more concern) If there value were 15 say the SP would be 49pps at the moment.
https://pressoracle.com/news/2019/04/11/gulf-marine-services-gms-trading-down-7-9.html
https://www.modernreaders.com/news/2019/04/11/numis-securities-reaffirms-buy-rating-for-gulf-marine-services-gms.html
12.15p Just moved this further up my watch list.
Everyone seems concerned with the banks and repayments.
Lets hope a better rate of interest can be worked out (7% at the moment irrc) in the negotiations.
Not much volume but the SP is still sliding away.
Are we worse off than a month ago? NO. Just gotta sit it out I guess. Or take your money and run!
So many puns there I lost count there!
Debt servicing is important. GMS are (as i'm sure you know) in the middle of reorganising their debts and finances.
They are in talks with a banking syndicate (made up of 6 middle east banks) iirc.
At the moment, there are offerings of 1.5% fixed for 2 years and then 4.5% on mortgages, perhaps these (or better levels) can be applied by the syndicate?
That would help.
With the work level that's there at the moment (123million turnover)that would have been 220 million a few years back.
I know you want here and now. GMS needs to be seen 5 years down the road. In 5 years that same workload will be worth 220 million again (if not more). This last year was a small loss, but it so could have easily been a profit.
If the 5 million in transport were in the bank, the 2 or 3 million extra from exchange rates went our way.
Adds 8 million to the books.
I know its all if's and but's.
However I would think twice before looking at it like Seafox, where they sold equipment and can not recover their lost earnings.
Debt servicing is important, lower interest rates would seriously help if they can be negotiated, dont forget, they didn't break their banking covenants, they met them.
This is where the SP drop came from.
Its like some people see its the last nail in the coffin?
The SP is where it is because of a stalled recovery.
The SP was low 30's before mention of banking covenants.
People still have that panic in there.
The covenants are taken care of and may (probably will) be improved upon in the coming months.
Seafox has a lot to do with a SP being where it is, it was 22pps dropping back to 18pps on their news release.
It hasn't recovered since IMHO.
The SP will move on good news and/or possibly some director buy ins.
Dont get me wrong NED I would like there to be no debt, but less vessels is less earning potential (over 25 or 30 year lifespan) and that is a balance and part of business that you have to figure you can work through I am guessing.
Seafox tried that method (of selling their vessels) and bought into GMS with it!
What does that say to you!
We will have to see what the syndicate can work out along with Mo B over the next 5 years to give GMS that edge in a colder paying world.
That may well be the key to unlocking true potential here long term.
Until the day rates return closer to normal.
That and a bit of "adjusted" accounting to go from a 5 million loss to a 5 million profit.
Don't forget there only JUST making a loss this last year. Its coming back toward profit as the turnover increases.
My last word is this.
Dont Panic about debt at the moment (it is there and DYOR is my opinion to new readers, the loans and finances are being renegotiated), if you do and sell you could well be falling out of a shaken tree.
Back to the topic originally stated earlier this week.
At the risk of repeating my self, the banking covenants are met.
The real reason the SP dropped from 33p.
I suppose the thing is is that I'm not invested in the 220 million turnover GMS, I'm invested in the present day GMS and I'd rather it was safe in the harbour during the storm. I want them to sort their debt out and recover with the market; they may not get back to the soaring heights of yesteryear but at least they would still be able to operate and hopefully grow again in time. I suppose another problem is there is no guarantee of a buyer if the whole sector is in the same boat and on the rocks. Apologies for all naval idioms.
Pbody, the problem is that they have a lot of debt which costs a lot to service.
So at the moment they are working for the banks, not the shareholders.
They need things to pick up so that they can pay down the debt or someone to take on the debt with a longer term view.
Even if the fleet is reasonably new, in a fire sale it would not reach book value.
That is why the price is where it is.
Agree with TT but also why I don’t think the debt should be so f ing onerous for the banks due to the value of our assets. Mental sp to be honest just does not reflect it’s true value .......
I think it is what Seafox did. They sold a percentage of some vessels. They have a finger in the pie still. In more than one place too (as with GMS). They could still buy more, 18pps is mighty cheap tbh.
The GMS vessels are nearly new (most) so selling them would screw themselves more long term if they can work through this tough period.
People forget, the SP dived on the news of the banking problem.
It is as if that's still a problem.
There is now work.
The fact is, transport costs increased as the work is more spread out. If contracts are near each other the transport cost reduce obviously. The market for work picking up allows for more choice of "where next" and reducing transport costs.
Some of those bills are paid for by GMS and then collected when the contractor actually pays.
Perhaps those bills can be "arranged" by the syndicate to be interest free in the new deal? At the moment GMS were still owed over 5 million from the last year on transport costs alone. It increased from 30 to 50 million.iirc So you see, less work available can mean more movement costs believe it or not!
GMS keep there vessels in tip top condition, something that helps with lost production, they have a very good reputation, I was told by someone who works in offshore environment that food quality and vessel quality are the massively big variables. Some vessels are wrecks, some food on the vessels is really bad, it would not be your first choice to eat there.
They could (with staff) cut down on food quality and save, if this would be popular is another matter, but cutting vessel maintenance costs can be a false economy. Breakdowns cost in a big way. Perhaps these were some savings Seafox were willing to implement that GMS were not? IDOK. They were looking at 15 to 20 million in savings?
I firmly believe new financing deals that are being worked on with the syndicate (6 banks as far as I am aware) will take into account the short term problem of working through a lean period, the work being more spread out, they're no fools, the syndicate information and the new CFO coming out in the summer along with more money coming in from the increased utilisation (yet to have a full effect in Aprils results as far as I am aware) should add a slightly rosier picture.
Dont get me wrong. The days of 220 million+ turnover aren't there now, but they WILL never be there again if they sell vessels.
Besides, the GMS vessels are more modified than the competitors as far as I am aware and more adaptable as a result. That would have the added negative of reducing the possible work available, such as Seafox selling a portion of its barge and it being in work on a windfarm right NOW. Its other barge that could get that work cannot get that contract.
Swings and roundabouts some days. Selling a vessel can be a double edged sword.
135 million turnover is a good number to be above, we are at 123 million iirc.
I dont see it as broken.
Just needing a poke or a tweek to get it ba
Have the company considered selling any vessels at any point? Obviously it would reduce their profitability in the long term but it would help with the debt, which I think is a much more pressing matter at the moment. There presumably won't be a long term if they can't get it sorted.
Most trades are for 13.00 this afternoon indicating buys.
Dont get caught out. There is still "tree shaking" going on. Hold is my opinion if you own, buy is my opinion if you don't.
There were over 1/2 million shares bought in the last week and we get a drop? IDHK. Just realise you will have to wait until the summer to get full perspective and everything behind the scenes shaking itself out.
Looks like shake over strengnt returning
So where were these 10 million shares eh?
33k was the largest trade.
My broker wouldn't let me sell under 12.75 today.
Just think there is a tree shake.
Lets see if a bounce in the other direction is on tomorrow. My advice is buy if you dont have any and hold if you do.
Mid summer is the time some answers should have shaked out or should it be (shieked) its way out of the company with their plan becoming implemented..
Thanks again Ned. I shall lookout for a broken down reliant robin on the hard shoulder somewhere between Peckham an Yorkshire.
Pbody he’s on his holz in
Peckham, the polish part . He’s visiting Delovski boyzkov ... he’s back tomora its Easter like Jesus he will rise again my son....