Viking Offshore: Penny stock focus.
Mgt guides for FY10 revenue to exceed $100m vs $37.6m yoy. Net profit expected to range $10.5-12m vs $1m yoy. Last closing price at $0.19 implies 8.7-9.9x FY10E P/E.
At 1H10, Viking had already recorded $35.4m revenue, $5.9m net profit.
Order book is close to $40m, and there are several deals in the offing. Profit margin is around 10-12%, roughly the expected long run avg...
Most of Viking's full-year expectations will come from heating, ventilation and air-con specialist Viking Airtech, acquired in Jan. Two subsequent purchases of marine decking stockist Promoter Hydraulics and accommodation outfitter Marine Accom, will contribute ~5mths revenue. Marshal Systems, bought for $17m in Oct will not impact FY10 financials. Viking’s value-add is being a one-stop shop for simultaneous fit-out of interiors of rigs and ships, saving shipyards 4-6wks of time…
The group plans to expand overseas and is focused on the Chinese and Vietnamese markets. Brazil and and India are also in its sights. Mgt has no plans for further acquisitions unless it is that of a specialist in explosion-proofing. Adds Viking’s stakes in TT International, United Envirotech and Nico Steel Holdings could yield at last $30m (30% of mkt cap) if monetized.
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