14.03.2025
Yesterday one of our Stocks For 2025 – Gulf Marine Services (LON:GMS) – announced that it has increased still further its massive Order Book, now up to an impressive $558m.
The Business
Founded in Abu Dhabi in 1977, the £190m-capitalised Gulf Marine Services has become a world-leading provider of advanced self-propelled self-elevating support vessels.
The group’s fleet serves the offshore energy industries from its offices in the United Arab Emirates, Saudi Arabia, and Qatar.
Its assets are capable of serving clients' requirements across the globe, including those in the Middle East, South East Asia, West Africa, North America, the Gulf of Mexico, and Europe.
The group operates a modern fleet of 13 highly versatile self-propelled lift boats, across international markets.
Its vessels provide a stable platform for delivering a wide range of safe and efficient services, primarily in the offshore oil, gas and renewable energy sectors.
The versatility of the group’s vessels' meets the demand of its clients, to provide cost-effective solutions, while minimising their environmental footprint.
The GMS fleet of 13 SESVs, which is amongst the youngest in the industry, support the group’s clients in a broad range of offshore platform refurbishment and maintenance activities, well-intervention work, and offshore wind turbine maintenance work, as well as offshore platform installation and decommissioning and offshore wind turbine installation.
The SESVs are categorised by size - K-Class (Small), S-Class (Mid), and E-Class (Large) - with these capable of operating in water depths of 45m to 80m depending on leg-length.
The vessels are four-legged and are self-propelled, which means that they do not require tugs or similar support vessels for moves between locations in the field; this makes them significantly more cost-effective and time-efficient than conventional offshore support vessels without self-propulsion.
They have a large deck space, crane capacity, and accommodation facilities (for up to 300 people) that can be adapted to client’s requirements.
Recent Contract Wins
On Tuesday 21st January the group announced a 171-day extension to an existing contract for one of its large-class vessels operating in the Gulf Cooperation Council, which is a political and economic union of six Arab nations – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
At that time Executive Chairman Mansour Al Alami stated that:
"This contract extension reflects the continued demand for our vessels, the overall strength of the market and the ongoing confidence of our partners in the service we provide."
Yesterday, Thursday 13th March, the company announced that two of its vessels had secured three-year contract extensions with a major National Oil Company (NOC) in the Middle East.
These extensions, secured at enhanced rates, build on an existing agreement, reinforcing GMS's strong partnership with the client and its continued commitment to supporting the region's offshore energy operations.
Impressively the group declared that its secured backlog now stands at $558m.
Mansour Al Alami remarked that:
"This contract extension highlights the robust and ongoing demand for our vessels in the region, driving consistently high utilisation rates across our fleet.
It reflects the trust our clients place in GMS's capabilities and reinforces our strong position in supporting the Middle East's offshore energy sector."
Analyst Views
At Zeus Capital, its analyst Daniel Slater has a 30p a share valuation on the group’s equity.
He notes that yesterday’s announcement is:
“Further good news for GMS, representing ongoing positive momentum for the company and its vessel market.
The new contracts represent a significant increase in the order book, helping further underpin revenues and visibility in the coming years, and also demonstrating ongoing day rate rotation, with GMS vessels coming off historic contract rates and onto current market rates helping drive continuous increases in average company day rates.
We look for this ongoing high utilisation of the company’s fleet, and positive day rate rotation, to be reflected in reported results going forward.”
His estimates for the end-December 2024 year are for an 11% increase to $168.4m ($151.6m) in group sales, while adjusted pre-tax profits cold have risen 80% to $43.6m ($24.2m), lifting earnings 74% to 3.3c (1.9c) per share.
For the current year, now convincingly underway, he looks for a rise to $176.4m sales, $55.0m profits and 4.3c per share in earnings.
Over at Greenwood Capital, analyst Craig Howie has a 29p Target Price on his Buy rating for the group.
His estimates are $168.4m sales in 2024, generating 3c per share in earnings.
For 2025 he has an estimate of $175.3m sales, with 3.7c earnings.
And for next year he sees $180.5m sales and 4.4c per share in earnings.
In My View
This really is a cracker of a dealing stock for so many players, the shares were up to 24.60p in April last year and have since been down to 14.15p, a couple of times – in October and late January this year.
They are now trading at around 17.70p, valuing the group at £190m.
Possibly before the 2024 results are announced next month, they could well attempt a push above the 19.64p level that was brea
ched just a month ago.
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