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Need very strong news that exposes value (or the lack of) for the shares to have sustained high (or low) prices. Else, its just a function of random demand/supply, as was the case on Friday.
Looks like the ask has finally dried up... a little bit more interest and this should start to move up imo.
Lets hope we get an early positive news release.
Hi Camkite- some really good professional analysis. Many thanks for that. I would agree with your comments regarding Seafox and potential uncertainties but a good risk reward play. Have a nice weekend and this BB has a really great contributor.
Hi Mate
I think there (all going well) considerable growth going forward... Reminds me a little of MCRO which the market was reading wrong last year... digging deeper all points to a positive from here imo.
If we skim over the HY & most recent results
"Adjusted EBITDA increased by 34% to US$ 31.4 million (H1 2019: US$ 23.4 million) with an adjusted EBITDA margin of 63% (H1 2019: 43%)
The 2019/20 cost saving programme has secured US$ 16.5 million in savings, on an annualised basis, significantly exceeding the original target of US$ 6.0 million set in March 2019.
General and administrative expenses fell by 43% (US$ 3.7 million) reflecting the full impact of cost savings implemented in 2019 and early 2020.
Adjusted EBITDA at US$ 31.4 million was 34% above that achieved in the comparative period last year.
Secured backlog now stands at US$ 225.1 million. This is up by US$ 14.6 million (7%) compared to the same period last year."
H1 2020 net cash flow before debt service stood at $15.2m
Net borrowings as at 30 June 2020 stood at $394.4m
Total equity $321m
At todays conversion is £233m ... so if we clear all debt we would be left with £233m.
IMO mate those are strong results... and there is a lovely gap on the chart at around 33p "GAPS GET FILLED" that gap appeared at the same time as the uncertainty regarding the debt... if the uncertainty is removed... it wont take long for the gap to be filled IMO.
The question and uncertainty surrounds Seafox's intentions and without digging deeper it looks risky... given they are big players in the industry in the jurisdiction if this statement is true and they aren't on to steal the assets "as far as we are concerned, we will protect the best interest of the company, its shareholders and all stakeholders."
We will be looking at some dilution for the debt situation and as they have clearly stated on more favourable terms with the bank they think raising of the funds will be easier (probably have plenty of deep pocket Saudis happy to front it)
& if the dilution is to JUST pay off the debt then it doesn't matter as the NAV will increase - with more shares in issue.
Provided their intentions are genuine... could you think of a better company suited to the job of turning this company around ? http://www.seafox.com/
33p and upwards (provided their genuine)!
Hi Camkite - some great posts there really informative.
Based on your NAV of 60p - care to elucidate your views on target share price ?
Thanks and appreciate all your work.
"as far as we are concerned, we will protect the best interest of the company, its shareholders and all stakeholders."
If they aren't liars we are sitting very pretty.
"8th October 2020
Seafox International Limited (“Seafox”)
Response to Statement by Gulf Marine Services PLC (“GMS” and the “Company”)
Seafox, the largest shareholder in GMS, notes the 8th October 2020 announcement by the board of GMS. It is our opinion that the statement is both misleading and consistent with a board that is acting in an alarming manner. The announcement comes from board members that in our opinion lost legitimacy since 30th June 2020 when the majority of shareholders voted down most of the resolutions put for approval at the GMS AGM, including voting against the remuneration of certain board members and the appointment of two of the current GMS board members that were voted down yet re-instated within 1 hour from the conclusion of the AGM. We are making this announcement to further inform the market of the background as to the Seafox GMS Directors resignations and the suggested GMS board changes.
Seafox believe that the suggested capital increase needed full shareholder support through consultation and potential underwriting/commitment as the Company is trying to raise significant capital in relation to its current market capitalisation. This as far as we are aware did not happen. There is no aborted process it is only a board that is currently seeking to limit its own personal liability. Such an important bank deal should have been put forward to a shareholder’s vote given the need for warrants or capital which is a shareholder matter. The capital raise process should have started a long time ago and not subject the Company to such a major risk by limiting the capital increase to a tight window. The capital increase process was stopped by a board meeting not attended by Mr Heikal and Mr Halbouny as they were not invited. In this context it is important to note that neither Mr Heikal nor Mr Halbouny voted against any capital increase process. Seafox is not aware of any real effort to raise capital, including without limitation, wall crossing shareholders or new investors. The company did not provide any detail in that respect.
Seafox believe that the current board members do not understand the basic concept of a shareholding company, let alone a listed UK PLC, namely that the company has shareholders! Shareholders who have invested capital, time and effort. Shareholders that voted down multiple resolutions and as far as we are concerned, we will protect the best interest of the company, its shareholders and all stakeholders.
Seafox suggested independent board members that have no affiliation whatsoever with Seafox, we are trying to bring best in class expertise, independence and proper governance to the board in the context of a company that predominantly operates in the Arab world and listed in the UK."
last point:
Taken from seafox most recent statement on the matter:
"Seafox is avoiding being dragged into continuously having to respond to bewildering statements.
In summary, it is our belief that the new board if elected will have a better chance to raise capital including from existing shareholders and that the board changes we have proposed will be conducive to such efforts. It is our intent to try and support the new board if elected by vote and capital and we believe that the existing board has failed in its primary responsibility to act in the best interest of the Company."
To me it looks to me more like Tim Summers was on the blag and not up to the job happy to take a huge salary & had very little interest in the share price or corporate structure. Seafox were trying to protect their interests.
Hence where we are today. Again, they cannot buy the company out or raise funds for less than Par value & given the recent bank appointees to the board... if their intention was to buy it out or reduce par value, why bother ?
"GMS has spent over US$15 million for what is effectively a 6-month extension from its lending
banks. At the end of this 6 month period (assuming no equity can be raised) in our view most
of the Company’s EBITDA (less capex and taxes) will be required to service interest costs
without allowing any significant deleveraging. PIK interest applies across the entire loan with
no separate senior and PIK tranche. Additionally warrants will be issued further diluting
shareholders. Surely such a ruinous agreement (which relies so heavily on shareholder support)
should have been coupled with commitments from shareholders. You state that 39% of the
Company’s shareholder base was supportive of the equity raise. Where are the binding
commitments from such shareholders now? Indeed a number of those who said they were
supportive are no longer shareholders.
As you know, the possible debt terms set out in your announcement of 31 March 2020 were
non-binding. We find it hard to understand why you chose to proceed with such terms and to
enter into binding agreements without attempting to enter into constructive dialogue with us
and/or to obtain binding commitments from other shareholders to support the equity raise. This
was despite the fact that by the time that the bank deal was announced on 10 June 2020 we held
over 29% of the Company’s issued share capital and had publicly declared our opposition to
the proposed terms. "
This is worth a read to give you more insight into the situ. https://www.seafox.com/media/vk_1433/media/press_releases/Seafox_-_Response_to_GMS_letter_of_22.09.20.pdf
Also worth bearing in mind Tim Summers supposedly took $500k from the company
NAV over 60p & order book for year ahead stands at $70m
Seafox tabled a bid earlier in the year to buy out the company at 10p per share.. there were at the time more than 50% of shareholders who were not prepared to accept the offer:
"Gulf Marine Services PLC
Letters of intent in respect of more than 50% of GMS shares
The Board of Gulf Marine Services PLC ("GMS" or the "Company") confirms it has received, on 20 May 2020, a letter of intent from Mazrui Investments LLC ("Mazrui"), covering 44,327,944 GMS shares (12.65 per cent. of GMS issued share capital) indicating that Mazrui have no current intention to accept any offer of 10 pence per share (or $0.09 per share if higher).
As a result, GMS has now received letters from 14 GMS shareholders who collectively hold 52.08 per cent. of the Company's issued share capital, indicating that they have no current intention to accept any offer on the terms of the Seafox proposal."
Seafox were the ones who put the new BOD in place & are now re negotiating the terms of the debt with the lending banks.
You could say there was some uncertainty regarding seafox's intentions but since putting the new board in place they have set their main agenda at renegotiating the terms of the debt... as the biggest shareholder have a vested interest in seeing value retained, hence perhaps their board coup intention was that they were unhappy with the debt layout as opposed to buying the company out.
They cant bid for stock below par value (their original offer was $0.09 but cannot bid below 10p) & as seen earlier in 2020 the companies shareholders are not prepared to agree to unfavourable terms... luckily there are over 50% of the company prepared to vote against any underhanded moves.
Hence buying at 6/7/8p is good RR.
Bloomy
par value is 10p - company cannot raise funds or issue below this price. Given new BOD were put in place by the companies largest shareholders and they are negotiating new terms for the finance and the terms and talks are progressing positively & the fatc the banks have allowed 2 extensions.
All points to a positive outcome. As ever with any business there can be no guarantees but with NAV at circa 60p & a growing order book and positive ebitda... from sub 10p it is an very decent risk reward.
But where is it going ?
We all knew it was coming.
Great close to the week
Timed*
No dramas dude.
We both had ones that well.
Camkite - didn't say that you made it up. I hold a fair few and had no difficulty picking up another 50k. Thats all.
Won't take that much to clear the ASK up to 7p
This will be filling that gap at 33p in the not to distant future imo.
NAV 60/70p ... increased margins & £70m order book for the year ahead with more orders expected.
Get the finance out of the way which imo will prove positive from these levels.
Took some more this morning... if it sticks around will top up again next week... 10p+ in the near term moving on to 30p+ after that IMV
Why would I make it up ??
You see all of those £500 trades.
Can't be true- bought online no problem.
Ok - had to buy in £500 lots.