RE: Dont get caught out.10 Apr 2019 20:33
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
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