International energy services company Wood Group, posted a 20 per cent rise in revenue from continuing operations in its full year ended December 31st, boosted by growth in all three divisions.http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=48822&action=news&story_id=20737594
Revenue from continuing operations totalled $6,821.3m (2011: $5,666.8m), while earnings before interst, tax, and amortisation (EBITA) from continuing operations came in at $461.1m (2011: $341.6m), up 35%. The EBITA margin increased from 6.0% to 6.8%.
Profit from continuing operations before tax and exceptional items was $362.7m (2011: $254.1m), up 43%, and adjusted diluted earnings per share were 85.2 cents (2011: 60.2 cents), up 42%.
The total dividend for the year was up 26% at 17 cents per share (2011: 13.5 cents), following a final dividend payment of 11.3 cents, reflecting the company's "confidence in the longer term outlook for the group".
It is often the case that share price will jump on the announcement of a good result, especially if it comes in ahead of expectations. This can also be the start of a new trend as the share price goes higher. Often however, the market will anticipate the good news so to some degree it may well be priced in. Wood Group has been another steady riser, with dips along the way, for a few years. After today's price move there may be more to come, but are there others in the same sector who just might come in with decent numbers when they announce them and so far it isn't totally reflected in their share price?
One possibility is FTSE250 Kentz Corp, which can be quite volatile, but has seen its share price dip recently although back in January a trading announcement did say that a good result was expected when it reports at the end of March. The share price went up significantly on the back of that trading announcement suggesting that the market liked what it was hearing, but has drifted back since. Unless there is a surprise, we might see a repeat performance price rise.
Kentz Corporation Limited (LSE: KENZ), the holding company of the Kentz engineering and construction group, announces a pre-close trading update ahead of its results for the year ended 31 December 2012, due to be published on 25 March 2013.
· Earnings per share (diluted) for 2012 in line with analyst consensus, reflecting strong growth on 2011
· Backlog of US$2.57 billion at the end of December 2012, up 7% from December 2011
· Order intake of US$1.72 billion to the end of December 2012
· Pipeline of prospects increased 32% to US$13.2 billion at December 2012 (December 2011: US$10.0 billion)
· Net cash balance of approx. US$220 million at the end of 2012
Christian Brown, Chief Executive Officer of Kentz commented:
"2012 was another successful year for Kentz in which the Company again delivered strong earnings growth. The outlook for 2013 continues to be positive with backlog growing to US$2.57 billion and over 65% of target 2013 revenues under contract.http://www.digitallook.com/news/rns/20631325-1168947/KENZ-Pre-close_Trading_Update_html
It's possible that Kentz has been left behind a little and if it reports well when it announces on 25th March, we might see a Wood Group type move if the market likes it. This share is also one the Naked Trader, Robbie Burns seems to have liked for some time, although he also points out that it can be quite volatile and is difficult to time. Certainly it is one to watch.
Wood Group is up another 3% today which now puts it on a P/E of around 17, forecast 13 for next year (DigitalLook).
ReplyDeleteKentz Corp down a little today, P/E 11.6, forecast around 10 for next year. On fundamentals it does look cheap compared to many in its sector.
Another FTSE250 company in this sector Hunting produced pretty good results today, but is off around 3% on the back of them. Only reason that I can think of why it's falling is that it has had a good run since Nov/Dec last year. Hunting's P/E is also in the 15-16 range so it is up with Wood Group in that respect.
ReplyDeleteIn terms of market cap, Kentz Corp is small by comparison to Hunting and especially Wood Group, but the potential for future growth looks pretty good.