Engineering and construction group Kentz Corporation (LON:KENZ) said this morning that it was expecting revenues and profits for 2010 to be significantly ahead of current market expectations for the year. The news was enough to push shares in the group up by 6.5% to 378p.
In a trading statement ahead of its full year results for 2010, which are due in March, Kentz said that the strong first half performance reported in September 2010 had continued throughout 2010. It saw significant natural growth from current contracts and increased demand for services across its three Global Business Units (GBUs); Engineering, Procurement and Construction (EPC), Construction, and Technical Support Services.
The backlog at the end of the year was US$1.6bn, which was in line with the level reported at the half year and up from US$1.497bn at the end of December 2009. Total order intake to backlog between January and December 2010 was US$1.253bn. Kentz said the EBIT and pre-tax profit margins for 2010 were expected to be in line with market expectations.
Hugh O’Donnell, the chief executive of Kentz Group, said: “I am pleased to report that Kentz has finished the year in a very strong position. Despite the challenges within the global market place, the Kentz strategy has delivered significant growth through the globalisation of our Business Units. Pricing pressure in the Middle East caused some delay to EPC projects in the first half of the year, but a number of these projects are moving ahead now and we have seen a substantial uplift in activity in the second half.
He added: “Kentz continues to deliver projects in challenging and remote locations and this period has seen us add new geographic areas to our operations including Papua New Guinea, the Dominican Republic and Iraq. Importantly, these projects are with existing Kentz clients and our focus on delivery for core customers has proven to be the right approach; with the signing of two new framework agreements with ExxonMobil and Shell during 2010. Natural growth in current contracts has been a continuing feature of our business and coupled with a growing number of longer term opportunities gives us confidence that the outlook for 2011 will be ahead of our previous expectations.”
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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.
Kentz Corporation Limited is the holding company for the Kentz Group. The Company, along with its subsidiaries, is engaged in the provision of engineering and construction services, principally in the oil services sector. It operates in three segments: specialist engineering, procurement, and construction (EPC); construction, and technical support services. The Company delivers solutions through a range of engineering and construction services using its global network of offices. Some of its subsidiaries include Kentz Pty Limited, Kentz (Australia) Pty Limited, Kentz Middle East Holding Company W.L.L., Kentz Engineers and Constructors Botswana (Pty) Limited and Kentz Canada Holdings Limited. As of December 31, 2011, the Company had operations in 29 countries. The geographical areas the Company operates in include the Middle East, Far East, Africa, Australasia, Americas and Europe. On February 1, 2011, the Company acquired RNE Engineering & Projects (Pty) Limited in South Africa. more »
2 Comments on this News show/hide all
Pretty stellar performance with an increase in cash to $200m to boot.
http://www.reuters.com/article/idUSSGE70D05C20110114
Analysts on average expect the company to post a pretax profit of $54.7 million on revenue of $879.6 million for 2010, according to Thomson Reuters I/B/E/S.
Year-end order backlog at the company, which focuses on the oil and gas industry and has a market value of $651.5 million, rose to $1.6 billion from $1.5 billion a year ago.
[Evolution did have a 400p price target a few weeks ago which I reckon will be reviewed upwards.
http://www.bloomberg.com/news/2011-01-14/kentz-expects-order-backlog-to-rise-15-percent-on-new-bidding.html
Kentz has submitted proposals for contracts worth about $3.8 billion, and will pursue other opportunities to bring the total to $8 billion within 12 to 16 months, said Chief Executive Officer Hugh O’Donnell.
http://www.reuters.com/article/idUSSGE70D05C20110114
The Ireland-based company, whose clients include Chevron (CVX.N), Royal Dutch Shell (RDSa.L), BP (BP.L) (BP.N) and Exxon Mobil (XOM.N), will focus on acquiring engineering service firms, Chief Executive Hugh O'Donnell told Reuters.
"Our strategy of focusing more on the smaller bolt-on acquisitions should be easier to deliver than a larger, transformational one ... we are pretty confident that we can look at two deals this year," O'Donnell said.
Still seems good value to me even after its recent good run and FD agrees.
Specialist construction and oil and gas engineering group Kentz (LON:KENZ) got an upbeat write-up from Fox-Davies.
“We have increased our 2010 and 2011 forecasts by around 25 percent following an extremely positive year end trading update,” Paul Singer said in a note to clients.
“Kentz continues to represent an excellent investment opportunity.
“The order book is extremely promising, giving good earnings visibility and the financial position of the group is very solid. The valuation remains compelling with a prospective EV/EBITDA of 7.5 times and P/E discount to the sector which do not reflect the fundamental prospects for the group and attractive risk/reward profile.
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