NauticAWT

NauticAWT: (S$0.325) Stellar debut for O&G play amid industry downturn
Oil & gas engineering services provider NauticAWT is off to a fine start on its trading debut, hitting a high of $0.36/share, 80% above its IPO price of $0.20.

The issue of 28m new shares (27m placement and 1m public offer) was 6.1x subscribed. Based on the enlarged share base of 189m, its market value was priced at $37.8m.

Net proceeds of $2.8m is earmarked for capex to strengthen its contracting services.

Questions, however, have been raised on the group's true listing intentions, given the relatively paltry sum raised for a company in a very capital intensive industry. As a gauge, $2.8m was equivalent to its listing expenses and less than its current cash pile of US$3.4m.

NauticAWT is engaged in subsurface, subsea and surface facilities engineering services and contracting solutions for field exploration, field development and field refurbishments in the oil & gas industry

The group has an order book of US$34.6m, expected to be recognised across FY15 and FY16. Past earnings have been volatile, fluctuating between US$0.8m and US$4.3m in FY12-14.

NauticAWT intends to pay 20% of its FY15-17 net profits as dividends. This translates to a DPS payout of 0.58¢ and yield of 1.8% based on FY14's earnings.

At the current price, the new counter does not come cheap at 4x P/B and 10.6x historical P/E.