Member Info for pbody

Chances are you wont get any money back.
What should happen now.
As the firm still exists (is in administration) but has stopped trading.
An administration team should be appointed to sell the contracts off and any other assets.
The BoD will not be a part of this (apart from maybe some staff on the financial side).

The administrators will probably be the last group used to carry out the financial audit that took place a year or so ago as they will be familiar with company and have already have a good idea of whats what and be VERY cost effective..
Once all the money is in and there is nothing left to sell, the money will be used to pay the debts, starting with the direct debts owed by the firm (including paying the administrators).
It will be wide ranging from contractors or material suppliers that are owed money down to the loans taken out..

If there is any money left from that, the remainder will be used to pay corporate bond holders (if there any issued).

If after that there is any money left. Then the shareholders get their turn.

Usually there isn't enough money to pay all the debtors.
They normally have to accept a percentage back of what they are owed.
So the chance of bondholders getting some back is slim.
The chance of shareholder getting any, even slimmer.

That's a simple breakdown as I understand it.
I hope it helps you understand where a shareholder fits in "in the que".
He isn't called "Bond" for nothing.
Dont ask me about the 007 part.

cant fault you.
send an email asking to check the office furniture again for 100 carat plus diamonds....
think this is a winner.
get on board and wait.

I dont think anyone minds asking the odd question not related to a share.
People without premium cant send a message to ask a question or have a chat.
Saying that it doesn't always mean people can agree on the answer once a post is seen.
Or that they should. TIME IS THE TRICKY ONE.
It can be as open sometimes as not getting an answer.
It can be as closed as no-one wanting to give one.
If only you could read and remember everything.
There weren't Red Herrings.
Life would be simple.

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..

There is an awful lot in that last message. I will post an answer para by para is the easiest way I can think of.
The chairman (and board appointments).

From my experience you are correct, board resignations cause a big level of nervousness and thus priced in fear.
Equally sometimes board turnover.
A new appointment or replacement giving change of direction or vision can have a massive influencing factor.
There have been two major appointments since the Chairman resigned. Neither had a positive effect on the price as one would expect.. The same with confirmation of long term contracts.
The resignation of the chairman was brought about in some part by Seafox.
The planned savings by GMS (6 million) do seem prompted by Seafox, however GMS has also warned the Seafox planned savings of 15 to 20 million are not valid neither their reduced daily opex rates.
I would hate to see a point reached where Seafox representatives are appointed to the BoD and then not be able to deliver on its savings promise OR A REDUCTION IN DAILY OPEX and then the BoD are carrying dead weight or worst still they are asked to be removed if they cant deliver! This is all yet to play out.
It is something hinted at in one of the GMS RNS.
My personal thoughts are (if there are savings/cost cutting about to take place) these unpopular decision are going to be identified already (as they have quoted the amount believed to be saved) and it would be better to appoint the Chairman after these have taken place.
The new Chairman will not be seen internally as the ex man cometh.
He will be seen as the man to build on and drive the company back to full utilisation and a state of sustained stable profit.
That is why I would not be in too much of a rush find a replacement.

As you know I dont want to rush and find a replacement for the chairman asap.
I am happier they find the right person.
But this is food for thought. It just shows you how the news that is out there adjusts the share buyers(sellers).
Even when a long term contract is awarded look at the price after the chairman stepped down......

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/exchange-insight/news-analysis.html?fourWayKey=GB00BJVWTM27GBGBXSSMM
all on a downward trajectory.........you would expect positive news like long term contracts to have had beneficial effect.
good to know when going against the tide is the right thing to do. the tide changes every so often....have a good weekend.

hereshoping.
thanks for pointing that out.

well done ssb1.
just glad I didn't try anything with interserve over the last month or so.
it could all be frozen.
this has taken a hit on the price but mid to high 30's looks like a reasonable level.
I know gfd (quite rightly)pointed out not all the work was oil based, but the price slipped in line with oil companies.
32 was low before the drop. when all the turmoil is sorted (I believe) that is the sort of region it will head back to as a minimum as the oil companies are heading back there.
all blue day in anticipation........

these have generally been a good earner.
the price seems brilliant value tbh.
perhaps it twitchy holders?

I doubt it.
the didn't bail out the likes of Carillion. hope of that is probably ludicrous.
they will sell the contracts off tho.

seafox statement.
http://seafox.com/en/news/Press-releases/RESPONSE-TO-GMS-ANNOUNCEMENT-8TH-MARCH-2019/e/pm/34/

There is a extraordinary general meeting coming up for GMS at the request of SEAFOX.
I will put a couple of posts on after this.
If you dont have a think on Friday it might be too set in stone after the meeting to get value.

The company said it now expected to be in full compliance with all of its covenants when they are tested against its audited 2018 financial results.

Gulf Marine Services had previously announced the award of three long-term contracts in the Middle East and North Africa region, each with a charter period of five years.

The first of the vessels had now commenced operations and the company was finalising the start dates for the remaining two.

Another client had exercised an option to extend the charter of a mid-size class vessel by six months, while a small-class vessel had started a four-month charter and large-class vessel had just won a five-month charter.

Gulf Marine Services said its backlog, including options, would increase to more than $260m, from $121m at the end of August, once all the new charters had commenced.

However, as previously announced, it said it did not expect a recovery in its trading performance in 2019, despite continuing improving levels of utilisation.

'The improving pipeline of opportunities for our fleet provides confidence that the market is starting to recover, albeit that it is more difficult to predict when this improved demand will be reflected in increased charter rates,' chief executive Duncan Anderson said.

'We welcome our banks' cooperation in managing our 2018 covenant obligations and continue to progress ways of addressing the group's long term capital structure.'

I know.
It is difficult to see if there is someone or group trying to achieve a controlling interest
Take a company private.
In more often than not the private investors are left guessing what is going on. A group of Venture capitalist or Large fund managers investing can give a truer picture to the balance or stability behind the core price.
Its another day of low activity widening spreads. Slow selling mainly.
I wonder if seaforx will try and buy some shares at 18p? Will there be a deal at the meeting?
Perhaps they were just wanting enough leverage for a meeting and not a greater holding?

It is a pity there is no audio feed from the meeting.

yes I depends upon the take up of that offer.
I doubt many private investors can afford 19 times more.
the large investment firms probably can.
that will leave quite a few unsubscribed share.
they will probably have to offer those to the market.
that's still to come.

has anyone mention anything on the amount of take-up there is on the offer?

I think they should inform GMS of their holding and GMS release the appropriate RNS.
As all other shareholders do so we dont have the ass-you-ass-me situation (I know you believe it to be the case having spoken to them) but it is (and has been) standard practice for large holders to inform the COMPANY AND IT RELEASE a rns on their holding alone at every whole percentage point.IT IS SUPPOSED TO BE LIKE THAT TO TAKE AWAY THE AMBIGUITY WE HAVE HERE. Has seafox stopped buying? is it selling? how much do they hold? This is not a GMS problem. This is a shareholder problem. They are supposed to inform as soon as reasonably practicable over 3% as far as I am aware. anyway my rant over. you see it happen sometimes.no one seems to do anything about it. people tell you they dont need to or whatever and believe it when there told and there is ambiguity. that's why that rule is there. I did find it once a while back for another situation but its pointless "trawling" through it again. thanks for pointing out other services use the equipment besides oil and it is nice to know the more diversified the work the more likely any sector problems will have less knock on effect.
Do you know of anyone attending the meeting on Monday?

the SP recovered after the oils price shocks into the mid 70's then in 50's the drop into the 30's was truly oil price fear; compare premier oil SP as timeline and you can see that clearly.
An SP in the 70's is not too far fetched if things are sorted and the oil price is around 80 for 3 to 6 months.