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Last close As at 17/03/2023
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Market capitalisation
35m
Research: Industrials
Medserv has announced the signature of a second contract for Shore Base Logistics for offshore Cyprus for an international oil company (IOC). Cyprus is a key growth driver for the company’s Integrated Logistic Support Services business. Overall, FY18 has started well for Medserv with contract wins establishing the company now in eight countries as tendering activity continues.
Written by
Annabel Hewson
Medserv |
Winning ways |
Contract win |
Industrial support services |
26 June 2018 |
Share price performance Business description
Analyst
Medserv is a research client of Edison Investment Research Limited |
Medserv has announced the signature of a second contract for Shore Base Logistics for offshore Cyprus for an international oil company (IOC). Cyprus is a key growth driver for the company’s Integrated Logistic Support Services business. Overall, FY18 has started well for Medserv with contract wins establishing the company now in eight countries as tendering activity continues.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/16 |
32.8 |
(1.3) |
(2.1) |
0.0 |
N/A |
N/A |
12/17 |
28.8 |
(3.6) |
(5.6) |
0.0 |
N/A |
N/A |
12/18e |
36.0 |
(1.4) |
(1.4) |
2.0 |
N/A |
2.0 |
12/19e |
39.3 |
2.2 |
4.7 |
2.0 |
21.3 |
2.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments
In our May report we mentioned that Medserv was in the advanced stages of negotiating for a tender from a second IOC for its Cyprus operations. To date, Medserv has provided services to ENI from its new Limassol base (full operation) and its storage facility in Larnaca. However, Medserv took the decision this year to consolidate its operations in Cyprus at Limassol. This second contract will require additional logistics facilities in Limassol and this investment will be met from existing resources. As we have described before, the Calypso lean gas discovery offshore Cyprus is believed to be ‘Zohr-like’; Zohr, offshore Egypt, is the largest gas field in the Mediterranean. The new find should provide an extended drilling programme, offering greater visibility and improved returns from Cyprus now from multiple customers.
After a tough year of transition in FY17, we are encouraged by the contract wins and activity levels across Medserv’s operating footprint seen in FY18. Medserv is engaged in advanced negotiations to locate support bases in new geographical regions that should support longer-term growth. The company has indicated that contracts here would be focused on development and production rather than exploration. The company’s ability to win larger contracts builds visibility into the investment case. Our forecasts and valuation remain unchanged.
Disclaimer
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Disclaimer
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Research: Industrials
Daldrup & Söhne made progress in building its presence in geothermal generation during FY17 and this is expected to yield additional benefits in FY18. A stable regulatory framework, an order book at record levels and additional geothermal projects under development (Neuried and Puchheim) are also expected to contribute to growing profitability in the forecast period (see consensus forecasts).
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