Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Par Value 10p no announcement of reducing Par Value so yes minimum 10p raise which will put the company on good footing moving forward.
Great news finally, market has been waiting a while for this..
You must be happy Camkites!
Not complaining Fig but I'll be happier once its at 30p. Will hold for the foreseeable. EBITDA is far to strong for a company not going bust.. imo this has been priced to fail for a long time and the raise which is expected to take place in the next 2 weeks will be at a minimum of 10p.
Camkite right time , right place , right industry. This is now back to investment status .
COV - Completely agree. "The company expects that this will lead to significant improvement in EBITDA going forward and the bottom line turning positive after years of continued losses."
"This new agreement with the banks is on vastly improved terms to what was agreed in June last year. As a result, it creates a positive platform on which the future development and growth of the business can be based; allowing the Company to benefit from the pick-up across its core markets."
"As the numbers demonstrate, GMS is in a strong position. Underlying operations continue to see good progress, with a far better secured utilisation position than this time last year, combined with improved margins and efficiencies. The pipeline of work opportunities continues to strengthen, particularly in the MENA Region, where contract awards, delayed as a result of COVID, are expected to be awarded in 2021, in addition to further demand created as NOC clients look to increase production capabilities."
"particularly in the MENA Region, where contract awards, delayed as a result of COVID, are expected to be awarded in 2021"
Be nice to get some new contracts announced in the near term and a revision of the EBITDA so Mr market isn't left guessing.
Can see a big re rate here .
This is good news and very obviously a better deal than before. Obviously it took a bit of time but these things always do.
Interesting that it reads as if they may very well never need to do the full $75m equity raise. They leave open the possibility of a broader refinancing after the $25m raise happening soon. If they are able to drive material cost reductions, efficiencies, contract wins, slowly improving day rates etc over the next 12-18 months then it appears they MIGHT manage to avoid the additional $50m raise. That $53m in interest savings for 2021 and 2022 is also uncanny and I can't help but think is being seen as temporarily "in-lieu" of the remaining $50m raise . It will go straight to extra cash in their pockets and hence net debt reduction. I can see a scenario where they clean up the business significantly over the next 12-18 months and refinance with a different set of banks and never have to raise more than the $25m now.
It's also interesting that they refer to "strategic and tactical alternatives" for the business once the balance sheet has de-levered. That obviously refers to either an eventual merger with SF or some other form of M&A/sector consolidation.
It's also interesting that SF and Mazroui are named as specifically working together re: NDA, committing to participate pro-rata in the upcoming $25m raise, etc. Where is Horizon in all of this? Horizon were of course key to getting them over 50% control. If Horizon are of a different mindset now then that is positive for us minority shareholders as SF have less power.
I also don't expect this to fully re-rate until the equity raise is complete. And I hope the $25m raise is structured as a rights issue in order to enable us all to participate. Although if not, can still at least partially offset any dilution by buying the corresponding entitlement amount in the open market.
Well done GMS and SF. Patient LTH's will benefit.
Where do you see this 're rating to AA after raise, I'd go for 25p + imho
@ Duster it all depends on business developments and time frame. Assuming they deleverage over the next couple of years to a normal level and EBITDA climbs higher through revenue and opex improvements, they should easily have a c. USD 600m Enterprise Value. Knock off 100-200m net debt as a sustainable run-rate level and the increase in shares assuming only a $25m raise, then you get to a share price of around 50p medium to long term. Obviously can be much higher if day rates for the fleet move into a structural bull market (it is so cyclical). Would guess more in the 20p range for most of this year though. Of course no crystal ball! But risk/reward is impressive. I think many of the worries minority shareholders have had over the past 12+ months, especially around intentions of SF, are being rapidly alleviated.
Yes I think once Equity is done then a 're rate imho, not long to wait as needs to be done before end of Match
ATB
Yes end of June hence the drop back.
Si547 So what do you think, i'm a little disappointed after over 18 months wait.
The equity rise will be much larger than the current share price
25p raise maybe low case 15p will be worked up imho
More likely a 5p fundraise
Toomuchshine - They cannot raise below 10p.
Cam evening
Can you enlighten me about tbis 10p bottom line pls.
Many thanks in advance
Duster
Par value is the nominal value of each share...
eg: when a company says “raised £1m through the issue of 1m shares **of 50p each** @ £1” that 50p each is the par value.
Companies can’t issue shares for less than this figure... in this case it is 10p (hence why this is good value).
Exactly the same as limited companies shareholder structure.
Would need to call an egm & reduce par value which looks highly unlikely from here.
Me too......frustrating that no amount of good news has moved the SP. Utilasation is great in comparison with peer operators and backlog is good too. Evolution with cantilever is now working as it was intended at better rates and being the only one of its kind, it is likely to not stop. Expect her rates to increase as clients realise significant savings from the unique design. GMS is now running very lean so with a better bank deal I think we can expect to see a significant increase in EBITDA this year; agree that it will likely be spent on deleveraging. Hope to see a SP bump after the EoY Results and another after the 25M equity raise; circa 20-25p by end of year?!
And with the Maine backers partaking in the equity part, they will of course want a return 20p +