NMS - Neptune Marine Services
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This is one of the most positive bits of news that should prove to be beneficial for NMS. Perfect positioning. Did Lange expect this?
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Hey Alba, it's not really a surprise if any of the big holders began to sell out as there are hundreds of other companies offering more value and security for your hard earned atm.
Sure we are in some kind of a global market slump with much uncertainty, yet there is still plenty of money around and many stocks are travelling quite nicely.
When the sp was over one dollar and the cap raising was oversubscribed (supposedly) three times, NMS was a market sweetheart. From its high of $1.37 (big increase in the fortnight leading up to the agm) there was a general consensus that the sp was 'manipulated' backwards for the benefit of cap raising and the spp. The sp is currently languishing at around half this. Why? Other than guesses and speculation, no one seems to know.
Recently cracks have begun to appear (inaccurate figures provided, neglect to announce euro patent, delays, investor presentation didn't even get a gig on BRR) and NMS seems to have lost favour. An announcement of another company aquired yesterday, on a very green day, and NMS sp moves up only 2c!!
I know this is a long term hold, but I for one would be disappointed if the sp stayed below $1 for the remainder of this year and it is looking like this will be the case.
Fundamentals haven't changed, rapid growth is continuing, new contracts are being won, yet NMS seems to have gone off the boil.
The 'locked and loaded' and the 'weld of choice' comments were made, yet nothing has come of this. Perhaps they're waiting for the future employees to graduate.
Sorry to sound so negative. I'd love as much as anyone to see NMS blue sky (as I'm currently down more than I care to think about), yet I am a little confused as to why it is struggling atm.
Sure we are in some kind of a global market slump with much uncertainty, yet there is still plenty of money around and many stocks are travelling quite nicely.
When the sp was over one dollar and the cap raising was oversubscribed (supposedly) three times, NMS was a market sweetheart. From its high of $1.37 (big increase in the fortnight leading up to the agm) there was a general consensus that the sp was 'manipulated' backwards for the benefit of cap raising and the spp. The sp is currently languishing at around half this. Why? Other than guesses and speculation, no one seems to know.
Recently cracks have begun to appear (inaccurate figures provided, neglect to announce euro patent, delays, investor presentation didn't even get a gig on BRR) and NMS seems to have lost favour. An announcement of another company aquired yesterday, on a very green day, and NMS sp moves up only 2c!!
I know this is a long term hold, but I for one would be disappointed if the sp stayed below $1 for the remainder of this year and it is looking like this will be the case.
Fundamentals haven't changed, rapid growth is continuing, new contracts are being won, yet NMS seems to have gone off the boil.
The 'locked and loaded' and the 'weld of choice' comments were made, yet nothing has come of this. Perhaps they're waiting for the future employees to graduate.
Sorry to sound so negative. I'd love as much as anyone to see NMS blue sky (as I'm currently down more than I care to think about), yet I am a little confused as to why it is struggling atm.
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I can't help feeling a little negative too, positive days aren't positive for NMS, announcements do nothing or even send the share backwards, everything things seems a little irrational, although everything seems to be fine fundamentally. It's only a matter of time till BP does something or a major job comes up. There was apparently information they couldn't give us during the AGM, according to Lange, so maybe something there??. I have virtually written off this year, but we could easily suprised and as Neil Carter from Macquarie said, it should "bounce back hard". This latest acquisition is a little beauty, ties in very well! In the next couple of years all the acquired services will be going global and NMS will probably get more acquisitions in strategically located areas, like the middle east,south africa or south america. Sure there are other stocks performing better at the moment, but when the momentum gets going here, look out. The potential is gigantic There still has not been any problems, except delays, which have affected quarterlies, but the big picture is still powering along. I'd love to know how their recruitment is going.
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a few bits of info i have located are that brazil is going to spend $70B over the enxt 4 years developing the ginormous O&G fields it has discovered recently. why so much - deepwater - apparently it costs a bit more to extract.
also BP have recently issued a large subsea diving contract for developments in their north sea operations to one of neppys large competitors (the job is currently too big for neppy). they have been issuing new contracts for a few months now, i believe due to their need to revisit all operations. i believe this is what led to the fabled preferred welder report and langes locked & loaded comment. just have to wait and see on that one.
and alba - if you can crack the database at neppy, or the share registry, or the asx, let me know and i'll track them down - till then..............
also BP have recently issued a large subsea diving contract for developments in their north sea operations to one of neppys large competitors (the job is currently too big for neppy). they have been issuing new contracts for a few months now, i believe due to their need to revisit all operations. i believe this is what led to the fabled preferred welder report and langes locked & loaded comment. just have to wait and see on that one.
and alba - if you can crack the database at neppy, or the share registry, or the asx, let me know and i'll track them down - till then..............
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Three Reasons Why The Boom in Oil Services Will Continue
By Chris Mayer
Has oil hit its peak price or not?
The answer to that question leads us to ask whether or not commodities are a bubble about to burst. Barron's recent cover story on commodities came down on the side that the party was over.
As an investor, I like to address these key questions, because my Capital & Crisis portfolio is loaded with commodity names – everything from oil and gas to molybdenum and base metals and more.
This is by design. I also have the vast bulk of my own money in real, or tangible, assets. When we are not in tangible assets, we are, more frequently than not, on the periphery, in the companies that put together or maintain the vital infrastructure that makes the whole thing go.
I believe the charts in this letter contain some powerful insights. You will want to keep them handy when things get rocky. They come courtesy of Barry Bannister, an analyst at Stifel Nicolaus, who delivered an interesting talk in Baltimore recently. We will focus on oil, though a similar story holds true throughout the commodity sector.
If you look at the price of oil, you find something interesting. Since January 2001, you can explain the move in the price of oil largely as a function of increasing money supply. As the amount of money grows, the price of oil rises. In fact, almost 87% of the move in the price of oil can be explained by the increase in money supply, as this chart shows:
Basically, $100 per barrel oil is what we would expect to see, given this relationship between the oil price and money supply. Given that we are still in the midst of a credit crisis of sorts, it seems unlikely the Fed will tighten money in any way at all.
That leaves a clear path for the price of oil and commodities to continue to rally in nominal terms. The other thing to remember – and people forget this by worrying excessively about a U.S. recession – is that the story of oil is no longer a U.S.-centric story. You've surely heard about how the rapid growth in China and other emerging markets drives oil demand. Well, it's good to keep that in mind. See the chart below: China and India are only beginning to consume oil at any meaningful level.
Right now, they are consuming oil at a rate the U.S. did in the early years of the 20th century. But look, we don't need China to start guzzling oil like we do.
Even if it moves half the distance between it and Hong Kong, that's a lot of extra demand. The way I look at it is this: What's more likely, China stays at 1910 oil usage or moves somewhere closer to, say, 1950s U.S. oil usage? I think the latter. All that bodes well for oil demand.
So where do you go to make money from all this?
The one obvious place people will automatically look to is to own oil and gas producers. That's not a bad idea at all. But I've got another angle here.
The next two charts are amazing. They show you the capital and exploration spending of both Exxon (XOM) and Chevron (CVX) from 1928–2007. They show spending bottoms in 1948 and 1974. After each bottom, there was a long run of spending. Spending peaked nine years after 1948. Spending peaked seven years after 1974.
If 2005 proves to be the bottom on capital spending – and it seems so, since Exxon only recently announced it would increase its capital spending to $25–30 billion over the next few years, a 25% increase – we won't see capital spending peak until 2012 at the earliest. Take a look. These charts are so similar it is almost eerie...
Now, why is this important? Think about what the oil companies spend money on. Where do they go shopping? They go shopping at the oil field services and equipment companies.
So that is where we want to be. Because even if oil has peaked, we're still looking at years of strong spending by the oil companies. You want to have some exposure to the receiving end of all that spending. Such companies will mint cash.
As Bannister pointed out, it can sometimes be better to own the picks and shovels. You don't actually own or produce the oil or gas, but your equipment is vital to those that do.
He used Newmont Mining, the big gold producer, as an example of a producer that has profoundly disappointed investors amid what may be the greatest gold bull market in history. Newmont's costs rose so fast and so much that it never really enjoyed (at least not so far) the higher price in gold. But if you were in some mining equipment manufacturer, you got paid.
So the key takeaways here are these: The price of oil has room to run yet, in part because of the growth in money supply and in part because of pressing international demand.
Secondly, even if we already saw oil peak, history says that prices won't retreat by much over the next several years. And finally, the capital spending boom by the big oil companies is just getting started, which is great news for investors in oil field services companies.
This is a free report from Daily Wealth. Sorry about the missing graphs- wasn't able to copy and paste them. I am a NMS shareholder from NZ
By Chris Mayer
Has oil hit its peak price or not?
The answer to that question leads us to ask whether or not commodities are a bubble about to burst. Barron's recent cover story on commodities came down on the side that the party was over.
As an investor, I like to address these key questions, because my Capital & Crisis portfolio is loaded with commodity names – everything from oil and gas to molybdenum and base metals and more.
This is by design. I also have the vast bulk of my own money in real, or tangible, assets. When we are not in tangible assets, we are, more frequently than not, on the periphery, in the companies that put together or maintain the vital infrastructure that makes the whole thing go.
I believe the charts in this letter contain some powerful insights. You will want to keep them handy when things get rocky. They come courtesy of Barry Bannister, an analyst at Stifel Nicolaus, who delivered an interesting talk in Baltimore recently. We will focus on oil, though a similar story holds true throughout the commodity sector.
If you look at the price of oil, you find something interesting. Since January 2001, you can explain the move in the price of oil largely as a function of increasing money supply. As the amount of money grows, the price of oil rises. In fact, almost 87% of the move in the price of oil can be explained by the increase in money supply, as this chart shows:
Basically, $100 per barrel oil is what we would expect to see, given this relationship between the oil price and money supply. Given that we are still in the midst of a credit crisis of sorts, it seems unlikely the Fed will tighten money in any way at all.
That leaves a clear path for the price of oil and commodities to continue to rally in nominal terms. The other thing to remember – and people forget this by worrying excessively about a U.S. recession – is that the story of oil is no longer a U.S.-centric story. You've surely heard about how the rapid growth in China and other emerging markets drives oil demand. Well, it's good to keep that in mind. See the chart below: China and India are only beginning to consume oil at any meaningful level.
Right now, they are consuming oil at a rate the U.S. did in the early years of the 20th century. But look, we don't need China to start guzzling oil like we do.
Even if it moves half the distance between it and Hong Kong, that's a lot of extra demand. The way I look at it is this: What's more likely, China stays at 1910 oil usage or moves somewhere closer to, say, 1950s U.S. oil usage? I think the latter. All that bodes well for oil demand.
So where do you go to make money from all this?
The one obvious place people will automatically look to is to own oil and gas producers. That's not a bad idea at all. But I've got another angle here.
The next two charts are amazing. They show you the capital and exploration spending of both Exxon (XOM) and Chevron (CVX) from 1928–2007. They show spending bottoms in 1948 and 1974. After each bottom, there was a long run of spending. Spending peaked nine years after 1948. Spending peaked seven years after 1974.
If 2005 proves to be the bottom on capital spending – and it seems so, since Exxon only recently announced it would increase its capital spending to $25–30 billion over the next few years, a 25% increase – we won't see capital spending peak until 2012 at the earliest. Take a look. These charts are so similar it is almost eerie...
Now, why is this important? Think about what the oil companies spend money on. Where do they go shopping? They go shopping at the oil field services and equipment companies.
So that is where we want to be. Because even if oil has peaked, we're still looking at years of strong spending by the oil companies. You want to have some exposure to the receiving end of all that spending. Such companies will mint cash.
As Bannister pointed out, it can sometimes be better to own the picks and shovels. You don't actually own or produce the oil or gas, but your equipment is vital to those that do.
He used Newmont Mining, the big gold producer, as an example of a producer that has profoundly disappointed investors amid what may be the greatest gold bull market in history. Newmont's costs rose so fast and so much that it never really enjoyed (at least not so far) the higher price in gold. But if you were in some mining equipment manufacturer, you got paid.
So the key takeaways here are these: The price of oil has room to run yet, in part because of the growth in money supply and in part because of pressing international demand.
Secondly, even if we already saw oil peak, history says that prices won't retreat by much over the next several years. And finally, the capital spending boom by the big oil companies is just getting started, which is great news for investors in oil field services companies.
This is a free report from Daily Wealth. Sorry about the missing graphs- wasn't able to copy and paste them. I am a NMS shareholder from NZ
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this is an extract from the latest patersons report after the acquisition of access management.
Recommendation: Speculative Buy
Neptune Marine Services Limited
Investment Highlights
• NMS has signed a letter of intent for the acquisition of Perth-based Access
Management (WA) Pty Ltd – a company specialising in the application of
specialised rope techniques to place workers in hard-to-reach locations.
Adding 0.3cps to our FY09 normalised EPS forecast (now 8.2cps), the
acquisition increases our price target from $0.95 to $1.00 (9.3x FY08/09F
composite EV/EBIT). We continue to rate NMS a SPECULATIVE BUY, with
the stock trading at 6.9x FY09F normalised earnings.
• Acquisition terms: NMS proposes paying a 4.5-5.0x EBIT multiple, which
is in line with previous acquisitions and management’s strategy. An initial
cash payment of $4.5m is proposed with a three-year earnout, which gives a
maximum 5.0x multiple. The acquisition is subject to due diligence and we
anticipate settlement by 1 July, 2008.
• Business: Rope access is a technique which allows technicians to perform
tasks including welding, fabrication, fabric maintenance and inspection,
which previously required scaffolding. Access Management has been in
business since 1999 servicing clients similar to NMS’ current client-base.
Staff includes around 12 permanent and ranging up to 30-40 contractors.
• Access Management forecast: We have forecast rapid growth for the
business given its current small base and the size of the potential market.
($4m in turnover last year). Our FY09 forecast is for turnover of $6m at
current EBIT margins (25%), adding $1.5m to our previous NMS FY09 EBIT
forecast ($33.2m).
• Acquisition positive but NEPSYS still a risk in FY08: While we view the
continuation of the consolidation strategy positively, we are mindful that the
short-term focus remains completing $6.9m worth of NEPSYS work in order
to hit management’s FY08 earnings target ($14.0m NPAT normalised for
share-based payments). Since this is subject to project timing and weather,
we highlight that ‘EBIT at risk’ is $4.8m (or 25% of our FY08 EBIT forecast).
Recommendation: Speculative Buy
Neptune Marine Services Limited
Investment Highlights
• NMS has signed a letter of intent for the acquisition of Perth-based Access
Management (WA) Pty Ltd – a company specialising in the application of
specialised rope techniques to place workers in hard-to-reach locations.
Adding 0.3cps to our FY09 normalised EPS forecast (now 8.2cps), the
acquisition increases our price target from $0.95 to $1.00 (9.3x FY08/09F
composite EV/EBIT). We continue to rate NMS a SPECULATIVE BUY, with
the stock trading at 6.9x FY09F normalised earnings.
• Acquisition terms: NMS proposes paying a 4.5-5.0x EBIT multiple, which
is in line with previous acquisitions and management’s strategy. An initial
cash payment of $4.5m is proposed with a three-year earnout, which gives a
maximum 5.0x multiple. The acquisition is subject to due diligence and we
anticipate settlement by 1 July, 2008.
• Business: Rope access is a technique which allows technicians to perform
tasks including welding, fabrication, fabric maintenance and inspection,
which previously required scaffolding. Access Management has been in
business since 1999 servicing clients similar to NMS’ current client-base.
Staff includes around 12 permanent and ranging up to 30-40 contractors.
• Access Management forecast: We have forecast rapid growth for the
business given its current small base and the size of the potential market.
($4m in turnover last year). Our FY09 forecast is for turnover of $6m at
current EBIT margins (25%), adding $1.5m to our previous NMS FY09 EBIT
forecast ($33.2m).
• Acquisition positive but NEPSYS still a risk in FY08: While we view the
continuation of the consolidation strategy positively, we are mindful that the
short-term focus remains completing $6.9m worth of NEPSYS work in order
to hit management’s FY08 earnings target ($14.0m NPAT normalised for
share-based payments). Since this is subject to project timing and weather,
we highlight that ‘EBIT at risk’ is $4.8m (or 25% of our FY08 EBIT forecast).
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Poor Ol' Neppy looks to be caught in the "doldrums" at the moment.
I think we need a stiff breeze to blow her up and over the 60c mark again.
Has anybody been accumulating?
I think we need a stiff breeze to blow her up and over the 60c mark again.
Has anybody been accumulating?
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shaun - if you look at the top20 reports posted on NMS site, and copied to this and other forums, youll see the funds keep accumulating at these prices.
a few million here & there, as those without long term dreams dump them to the highest bidders.
tomorrow is quarterly day.
not expecting too much info from the jan-mar period, as poor weather did affect the NWS, but hoping like all other offshore O&G services co's, neppy can bring to light more contracts, especially for clients new to NMS books, or recent additions to their client list, like chevron in thailand.
a few million here & there, as those without long term dreams dump them to the highest bidders.
tomorrow is quarterly day.
not expecting too much info from the jan-mar period, as poor weather did affect the NWS, but hoping like all other offshore O&G services co's, neppy can bring to light more contracts, especially for clients new to NMS books, or recent additions to their client list, like chevron in thailand.
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So we're all sweating on the quarterly. I know I am. I hate seeing my current balance compared to before and to drop more?? Lange did say that the earnings would be weighted towards the 2nd half, not last quarter, so it should be okay. You'd think they'd have to announce the euro patent, wouldn't they?? Surely alot more new work for the more established acquisitions and it would be good to hear how companies like USUS are onselling more services from neptunes suite of services. And if the expected earnings aren't met due to weather or other delays, then surely the next years forecast could be improved upon with that work carrying over?? And would good to have some reassurance that this years earnings are on track, as they would know by now.
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sophie - as far as weather, take a peak at schlumbergers quarterly, which was affected by weather events, but didnt include any mention of the NWS.
GOM was ok tho.
as far as earnings, lange has consistently reaffirmed the same figures all year.
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Quaretly Cashflow Report does seem very encouraging ! Boosting 66% increase in Revenue up to $24.5m & positive net cash flow of $4.8m...Neppy'
s Future does indeed look bright with revenue expected to increase in the future on the back of a number of large secured projects.
Heard a rumour on the terrace that warren buffet was looking at buying in at these bargain based prices!
s Future does indeed look bright with revenue expected to increase in the future on the back of a number of large secured projects.
Heard a rumour on the terrace that warren buffet was looking at buying in at these bargain based prices!
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Pretty positive q'ly that. Also noticed that the Euro patent for NEPSYS was tagged onto the bottom of the Australian Operational Update on p.3
It is slightly dissapointing that an announcement like this isn't made individually, but I get the impression that things are moving so quickly for NMS that news like this isn't really news worthy anymore.
I am still accumulating at these levels & look forward to bigger & better contract awards in the near future.
It is slightly dissapointing that an announcement like this isn't made individually, but I get the impression that things are moving so quickly for NMS that news like this isn't really news worthy anymore.
I am still accumulating at these levels & look forward to bigger & better contract awards in the near future.
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You'd have to think that report supplies a pretty solid platform now for the SP to rise. revenue of 56.4million, plus the 5.3million receipts received in the first 2weeks. That makes 61.7million in so far. They want to reach or surpass the credit suisse report projecting 78-79million. they've commenced an 8 and 3million dollar jobs, thats another 11million. So you'd think that alone makes around 72million, leaving only around 6-7million to make elsewhere from the 8acquisitions. Sounds like they will s4it it in. As JackC says, await another major contract and we should be laughing.
Anyway although the SP has done bugger all on the back of today's report, i feel alot more at ease with the future and this year's figure, thank god!! And that Patersons report expect an 95c share price, but only had concerns with earnings being met. They look like easily being met and Lange suggested not only will they be met, but the 4th qtr should be alot better than the 3rd. So????
Anyway although the SP has done bugger all on the back of today's report, i feel alot more at ease with the future and this year's figure, thank god!! And that Patersons report expect an 95c share price, but only had concerns with earnings being met. They look like easily being met and Lange suggested not only will they be met, but the 4th qtr should be alot better than the 3rd. So????
Quaretly Cashflow Report does seem very encouraging ! Boosting 66% increase in Revenue up to $24.5m & positive net cash flow of $4.8m...Neppy'
s Future does indeed look bright with revenue expected to increase in the future on the back of a number of large secured projects.
Heard a rumour on the terrace that warren buffet was looking at buying in at these bargain based prices!
Make sure you read it carefully. That cashflow of $4.8m is for the 9 months year to date, not just this quarter. This quarter was only $518k, which to me probably explains why the share price has not moved more.
This could be because of investment in upcoming projects, I don't know, but it would have been good to get a little more explanation as to why the cashflow was so poor.
The activities side sounds great, but the cashflow side for me is a concern.
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True, would be good to know why the cashflow was low during the quarter, does have 37+ million at the end of the quarter. Seems, NMS needs to win some chunky contracts...once this happens we won't see these prices again.
Good volume today, buyers out there but sellers keen to sell too.
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Add the 5.3m that came in during the 1st 2 weeks of April to $518k makes it a whole lot better. The expenditure for that $5.3m was probably included in the 31 Mar quarter