That's very big of you freedom - a clear gentle- man/woman
I'm sure your house purchase has proved a good investment as well and if cash flow allows take a look at CHT. Good 2-3 year investment in a fairly bullet proof stock.
Well, I had to sell my holding in KBC 2 years ago to finance a property purchase, and although I made a profit, i certainly didn't get the price the shares are sitting at today after this all cash offer.
A sincere and slightly envious "well done" to everyone who was holding these shares at close of business yesterday! The shares are up almost 50% on yesterday's close!
(KBC:112p), a consultancy and leading software provider to the global hydrocarbon processing industry, continues to buck the downturn in the energy sector and is set to continue to do so.
In the first half of this year, the company's pre-tax profits edged up 3 per cent to £4.2m on a 5 per cent rise in revenues to £36.2m, a rare performance indeed for a business operating in an industry that has seen a savage downturn in the past 12 months. True, cost cutting has played its part as KBC's board took the decision to take overheads out of the business to align the cost base given the challenging market environment. Headcount was cut by 10 per cent in the half-year, including the closure of the company's New Jersey office, at a cost of £800,000. These measures are expected to generate annual cost savings of £3.5m, the full benefit of which will be seen in the second half.
But this is far more than a cost-cutting story as 85 per cent of KBC's revenues are derived from oil refiners, the part of the industry that has been doing remarkably well, whereas it has been the upstream segment that has seen the savage cost-cutting and project deferrals. Indeed, the combination of a plunging oil price and rising output has sent US Gulf Coast crack spreads to five-year highs, a sign of refiners' profitability, which has enabled KBC to increase its own pricing on some contracts. Moreover, given that KBC's smart software and consultancy activities optimise performance and profitability for cost-conscious clients, demand is well underpinned.
In fact, the order book was up 17 per cent to £74m in the six-month period and since then KBC has won two important contracts, a three-year award worth $8.5m (£5.5m) with a Middle Eastern client for margin improvement and workforce capability development across three refineries, and its largest award ever in the Former Soviet Union.
It's worth noting that half the order book results from a four-year contract worth $100m (£64.5m) with Ecuador national oil company EP Petroecuador. This alone accounted for £13m of KBC's first-half revenue of £36m and offers solid visibility on future revenues. It also explains why trade receivables spiked from £30m to £43m year on year. However, I understand that all the December receivables from EP Petroecuador and other clients have been collected, in addition to a further £6m of receivables since the June half-year-end. As a result, KBC's net funds of £10.6m are set to rise to somewhere between £13.2m and £14.7m by the year-end, according to finance director Eric Dodd. That's important as running a strong balance sheet is enabling KBC to tender for further multi-million-dollar contracts without stretching its finances.
The bottom line is that KBC is bang on track to deliver the 10 per cent rise in pre-tax profits to £10.5m as predicted by analysts and reward shareholders with a 9 per cent hike in the dividend per share to 1.2p. So after stripping out net funds from its market value of £91m, in effect the equity is being valued on around seven times underlying operating profit estimates. That's hardly a punchy valuation for a company with a high-margin technology business that makes around £7.4m of operating profit on turnover of £21m and could be easily worth £60m on a standalone basis.
So having advised buying KBC's shares at 69p ('Fuelled for growth', 5 May 2013), reiterated the investment case at 110p (Riding an earnings upgrade cycle, 18 June 2015) and at 123p (Fuelled for strong growth, 12 August 2015), I believe a return to the 142p highs dating back to June 2014 is a reasonable target. On a bid-offer spread of 111p-112p, I rate KBC's shares a buy.
" KBS ADV.TECH. PLC (LSE:KBC) continues our Oil Equipment, Services & Distribution Sector week. Running the numbers against shares often leaves us feeling a bit "same old, same old" but KBC actually raised our eyebrows a tad. It's quite ..."
Shares in Aim-traded KBC Advanced Technologies (KBC:123p), a consultancy and software provider to the global hydrocarbon processing industry, appear on the cusp of taking out the May high of 126p following a positive pre-close trading update ahead of half-year results in September.
Underpinned by a firm order book, and good visibility on the future pipeline of contracted work and software sales, KBC's board anticipate hitting analysts full-year pre-tax profit estimates of £10.5m, up from £9.5m in 2014. It's certainly rare for a company exposed to the oil industry to be doing so well, but KBC's strategy has been to concentrate on key regions where it believes growth will emerge while at the same time proactively keeping costs in check in light of the difficult conditions in the energy market.
For instance, in the first half of the year, the company won £9m of new contracts in the Middle East and North Africa including ones with national oil and gas companies in Saudi Arabia, Kuwait, United Arab Emirates and Jordan. And because KBC's software enables businesses to reduce capital and operational spend, so producing attractive efficiencies for potential customers, there are good reasons for cost conscious clients to consider the company's offering.
The focus on downstream refining in particular, a segment accounting for 90 per cent of KBC's revenues in 2014, is another reason why business is holding up so well. Indeed, US Gulf coast crack spreads, an indicator of the gross margin earned by refiners, are close to a five-year high, having recovered sharply since the final quarter of 2014.
In addition, KBC's board have taken overheads out of the business to align the cost base with what is clearly a more challenging market environment. In the first half of this year head count was cut by 10 per cent, including the closure of the companys New Jersey office, at a cost of £800,000. These measures are expected to generate annual costs savings of £3.4m. This slimmer cost base partly explains why KBCs operating margins are predicted by analysts at research firm Equity Development to rise by 150 basis points to 14.7 per cent this year even though revenues are forecast to fall by 4 per cent to £73m.
A value proposition
It's also fair to say that there is clear value on offer in the company's shares and that fact alone is enough to support the current rally. That's because KBC's latest reported net cash figure of £15m is forecast by analysts to grow to £19.2m by the year end, a sum equivalent to 23p a share. That's significant in relation to a market value of £100m. Or put it another way, if you strip out net funds of £15m, then the company is being rated on 8 times current year operating profit estimates of £10.7m. To put that rating into perspective, the sector average multiple on this basis is 11.4 times operating profit, according to analysts at Equity Development.
Moreover, the valuation anomaly is even more glaring once you factor in the mergers & acquisitions activity we have been seeing in recent months. Indeed, when Schneider Electric injected its Invensys software business into FTSE 250 software company Aveva at the end of July, the unit was being valued on over 15.5 times operating profit on a standalone basis. KBC's simulation software accounted for 70 per cent of its annual profits in 2014, so even applying a lower rating for the company to reflect the contribution from less valuable consultancy activities, and the fact that KBC is a small-cap company, too, the ratings discount is simply too deep.
So having advised buying KBCs shares a couple of years ago at 69p ('Fuelled for growth', 5 May 2013) and last reiterated the investment case when the price was 110p (Riding an earnings upgrade cycle, 18 June 2015), I firmly believe a return to the 142p highs dating back to June 2014, and ultimately to my 165p a share medium-term valuation, are still very sensible targets.
A key feature of many of the companies I follow is the scope for repeat buying opportunities. For instance, shares in Aim-traded KBC Advanced Technologies
(KBC:110p), a consultancy and software provider to the global hydrocarbon processing industry, rallied hard from 109p to 126p after I highlighted the price was on the cusp of taking out last autumn's highs at 110p (Three value plays, 19 May 2015). I originally advised buying a couple of years ago at 69p ('Fuelled for growth', 5 May 2013) and still believe a return to the 142p highs dating back to June 2014 is a realistic target. Furthermore, with a decent operational performance, then a fair value target price of 165p is a sensible medium-term valuation.
It was therefore comforting to read the trading update at the annual meeting yesterday when chairman Ian Godden disclosed that his company has won £9m of new contracts in the Middle East and North Africa in the first five months of the fiscal year, including major contracts with national oil and gas companies in Saudi Arabia, Kuwait, United Arab Emirates and Jordan. KBCs strategy has been to concentrate on key regions where the company believes growth will emerge while at the same time proactively keeping costs in check in light of the difficult conditions in the energy market. Its hardly surprising that demand is holding up as KBCs software enables companies to reduce capital and operational spend, so offers attractive efficiencies for customers no matter the operating environment. I also understand that the two acquisitions the company made last year have both been performing well.
Of course, KBCs board has acted sensibly and cut costs in the current environment, taking £3.4m out of the cost base at a one-off cost of £800,000. So although revenues are expected to fall by 4 per cent to £73m this year, operating margins are predicted by analysts at research firm Equity Development to rise by 150 basis points to 14.7 per cent. This explains why underlying pre-tax profits are forecast to rise by 10 per cent to £10.5m in fiscal 2015.
Its also worth flagging up that KBC's latest net cash figure of £15m is forecast by analysts to grow to around £19.2m by the year-end, a sum equivalent to 23p a share. Thats significant in relation to the company's market capitalisation of £90m. Or put it another way, if you strip out net funds of £15m for the current market capitalisation of £90m, then the company is currently being rated on only 7 times current year cash adjusted operating profit estimates of £10.7m. To put that rating into perspective, the sector average multiple on this basis is 12 times operating profit.
So with KBCs shares pulling back to their chart break-out point (110p), and tracing back to the 50-day exponential moving average (110p, then from my lens at least this looks like yet another repeat buying opportunity with the 14-day relative strength indicator now showing an oversold reading of 40. Priced on a bid-offer spread of 109p to 110p, and offering 50 per cent share price upside to my year-end target of 165p, I continue to rate KBCs shares a buy.
I have been following with interest developments at Aim-traded KBC Advanced Technologies (KBC:109.5p), a consultancy and software provider to the global hydrocarbon processing industry.
I last updated the investment case at the time of the company's fiscal 2014 results in March when the price was 87p ('Blow-out results', 18 March 2015), having initiated coverage at 69p ('Fuelled for growth', 5 May 2013). Since my last article KBC's share price has moved up 23 per cent to 109.5p and is now on the cusp of taking out last autumn's highs at 110p. This price action should be noted because a close above 110p would signal a major share price break-out and one which, in my view, paves the way for a return to the 142p highs dating back to June last year. Moreover, with a decent operational tailwind, I expect my fair value target price of 165p to be challenged in due course.
It's easy to see the company is gathering investor interest. Firstly, at the end of last month, KBC Advanced Technologies entered into an agreement with Kongsberg Oil & Gas Technologies to develop stronger simulation software integration and more effective engineering and operations workflows for the oil and gas industry. At the same time the parties have signed a reseller agreement to enable them to cross-sell their leading software technology products together as a complete suite for simulation, optimisation and operator training across the breadth of hydrocarbon production and facilities. This can do no harm at all to earnings expectations for the year ahead.
Secondly, KBC has recently appointed a new finance director, Eric Dodds, formerly finance chief at software company Morse prior to its takeover five years ago. His appointment is a good addition as he brings in a wealth of experience in financial management of both consulting and technology companies.
Thirdly, there is an active buyer in the market, Kestrel Partners, the investment manager to Kestrel Opportunities, a Guernsey-based cell acting on behalf of wealthy private clients. In fact, in the past couple of months Kestrel has purchased more than 750,000 shares in KBC to lift its stake to 12.25m shares, or 14.89 per cent of the issued share capital. Oliver Scott, non-executive director of KBC, is a partner of, and holds a beneficial interest in, Kestrel Partners and is also a shareholder in Kestrel Opportunities. In other words, there has been indirect share buying by an insider.
Fourthly, the valuation is still attractive. That's because analysts at brokerage Cenkos Securities and research firm Equity Development predict that KBC should be able to increase underlying pre-tax profits by 10 per cent to £10.5m this year. This means that once you strip out KBC's latest net cash figure of £15m, worth around 18p a share, from the company's market capitalisation of £90m, then the shares are being rated on less than 10 times post tax earnings, a near 40 per cent discount to the small cap software average for sub-£100m market cap companies.
In the circumstances, I feel that KBC's shares are still worth buying on a bid-offer spread of 107p to 109.5p. My year-end target is 165p. Buy.
Kestrel the investment fund have been topping up their HOLDING for some time. It doesn't show any sign of stopping either. The recent announced alliance with Kongsberg is very exciting. Fundamentals due soon are we are all expecting positive growth arcoss the accounts. I have studied other CPY's financials in this sector relative to their MCAP and for me KBC stands out as being undervalued. To quote Kestrel's fund fact sheet for March 2015 ' we continue to be optimistic about KBC which remains on an undemanding rating'
KBC non-exec director Oliver Scott's Kestrel investment company bought 100,000 on May 8 at just over 100p, then dived in for a similar tranche on 13 May at nearly 106p. There seems to be a pleasing growing confidence in this company.
The oil price may have slumped last year, but there is no stopping Aim-traded KBC Advanced Technologies
(KBC: 87p), a consultancy and software provider to the global hydrocarbon processing industry, which reported a blow out second half of 2014.
The headline numbers made for a pleasant read: underlying full-year pre-tax profits increased 13 per cent to £9.5m (above analysts' expectations) on revenues ahead 17 per cent to £76m; the company's higher-margin technology business had a record year; and the pipeline of new work is at an all-time high of £88m, up almost £10m year on year. In turn, shareholders were rewarded with a 10 per cent hike in the dividend to 1.1p a share. So, how did the company manage to turn in such a strong operational performance in the face of a savage downturn in the oil and gas industry?
An operational efficiency and profit improvement service
The explanation lies in the fact that KBC is not being impacted directly by the US domestic oil exploration downturn since a large proportion of its business is in the downstream part of that market which is less adversely affected. In fact, around 90 per cent of its revenues are generated from downstream petrochemical plants, which has insulated the company from the widespread industry belt-tightening in the upstream sector. So, although chairman Ian Godden predicts "a scenario of low oil prices for at least 18 months and some further belt-tightening by our clients", there are definite positives underpinning the business case.
For example, more of KBC's clients need to optimise their existing assets in this pricing environment; the company's technology solutions are helping clients optimise production rates at lower energy costs; as oil companies reduce their work forces, they will need consultants to fill the gaps; downstream refining profitability is returning to higher margins than have been seen for several years; and upstream operators are looking to drive more efficient production. Indeed, included in the year-end order book is a $48.6m (£33m) two-year contract extension with an existing South American client, the third-largest contract in the history of the company. The agreement involves KBC expanding the licence of its refinery-wide simulation software suite, Petro-SIM and the associated SIM-suite reactor models, to the client's refinery business. The company also won a notable upstream software deal worth £3.3m.
In addition, KBC has been expanding aggressively through acquisition and successfully too. Last summer, the company acquired FEESA, a global leader in upstream hydraulics, for £11.2m. As a result, the enlarged operation is able to offer clients profit improvement programmes across the full hydrocarbon value chain. The business has been targeting larger, more capital-intensive, higher-margin projects, having raised £23m in a placing at 115p a share last May to strengthen its balance sheet.
Net funds ended the year at £11m, but working capital requirements have peaked and net cash has since increased to £15m in the past couple of months. That's a significant sum in relation to KBC's market capitalisation of £70m, and its net asset value of £66m. It also means that the company has the firepower to seek out further complementary acquisitions, and seek out more contracts, while comfortably meeting its working capital needs. In fact, I understand that the company's technology business won a major European contract from a rival in the final quarter of last year, highlighting the value in this higher-margin proprietary software business and one accounting for 70 per cent of full-year profits.
A positive earnings outlook
Following the earnings beat yesterday, and factoring in the robust order pipeline, analysts at broker Cenkos Securities and research firm Equity Development predict that KBC should be able to increase underlying pre-tax profits by 10 per cent to £10.5m this year. On
Good recent article; says investors have overreacted to recent Middle East oil production "problems" and that KBCs order book is very healthy. It rates KBC a buy at 103-105 and gives it a target of 165p.
THE monotonous tune of the SHORT-SELLING deramper:
"Going down, I'm afraid" ...."been in this for years and still losing money" ...."The BoD stinks"
"Oh dear" ? ...."Placing on its way, more dilution" ...."Heard whispers in the City"
"There must be a leak, it looks like a duster" ...."A friend of mine in the know"
"This company couldn't run a pi/ss-up in a brewery" ....."Word is, the financials are poor"
You've heard it all dozens of times before, yet these often used jibes are enough to create a degree of uncertainty ?
The words "Oh dear" or " I'm afraid" at the start of the 'posters' rant often sets the sp in motion.....DOWNwards!
Deramping SHORTERS !
Shorting a rising stock....is much worse when it is done by your resident posters that seemingly are your buddies and convince 'long' holders to give up!
What many pi's fail to grasp is the extent that shorting is taking place. Often we tend to think that the 'shorter' is done with and we expect the stock to now rise, now that 'he' is out of the way? You'd be wrong in many instances, for 'he' the shorter, is often followed by others that 'help' keep the stock down !
Some stocks fall after GOOD NEWS! ....IS it just normal levels of profit taking? Yes, imo....
...BUT the underlying reason for many pi's taking early profits, is simply they are afraid they'll be left in paper losses!
Once pi's know the stock is being shorted...they'll SELL UP IN THEIR DROVES !
We can't both WIN !
The 'shorts' therefore 'win' their bets, whereas the 'longs' lose the best part of their investment, possibly for some time to come......and just when you thought this couldn't go any lower, THEY'LL SHORT THE STOCK AGAIN !
Thanks for all your support. We are now at 4,401 votes!
AND SOARING !
(that's A LOT of irate investors!)
Investors are saying something? They are voting in their thousands !
Bookmark the links if you wish to 'pass the LINK/s on'.... or read later?
BE A PART OF IT
# The big problem with shorting is that THEY (the shorters) WOULD most likely lose most of their money IF they just 'bet' on the price going down without trying to 'help' it down?
So, there is the 'catch 22' scenario. No one would know of an RNS to be released that will contain BAD NEWS, if they did and then 'shorted' the stock, then they are guilty of 'insider trading'.
The only sure way to short a stock and WIN is to spread dis-information to defame the company with help from other posters that are in concert with them. To ENSURE that they don't lose the biggest part of their 'short', ironically, then, they must deramp with (seemingly) believable posts.
When the pro's do it, they simply get the media or well known 'crooked' tipsters, analysts or brokers to do it for them. (say no more). .They're all in cahoots with each other!
The campaign against shorting is for the benefit of the 'cheated' investors that cannot control their investments due to the dirty tricks played out by co-ordinated deramping in order to tank the sp to abnormally low levels.
When the campaign is complete, the results will be reviewed by Govt legislators re- further action! The branch of the FSA ie FCA will be asked by Davide Serra to conduct an investigation into short selling practices, with the view to either:- an outright ban on short selling, or at the very least to be better and more vigorously regulated !
The HMGovt epetition is a regulated and monitored site with legal authority . Discussions of which are freely entered into with individual viewpoints.
Many pi's are questioning the validity of 'short selling' and are voting in their thousands....the people have spoken, they are feeling hurt and disenfranchised.
The 'not so quick' and 'unsavvy' cannot be blamed for having their life's savings 'shorted' away just because they cannot spend hours on end glued to there computer screens. Having to work during trading hours, investors cannot keep in touch with hourly movements on stocks that they have chosen for their retirement and had them locked into ISA's. What gives shorters the given right to play down stocks at their own leisure thus profiting at everyone elses' loss....on perfectly good stocks with sound fundamentals?
..campaign heading for 4,000 !
HMGovt epitition to make short-selling illegal (or better regulated?)
* OFF TOPIC but important that all AIM investors understand the pitfalls of investing in stocks that are being shorted down to rock-bottom levels? So you think that is 'cute', now you can buy at the lowest sp for months.........you've gotta be kidding...read on:-
UPdate...epitition (closes 24th September 2014, so still plenty of time to get those votes in)
A lot of irate investors ... are voting for this campaign...?
# Thanks to all those that have supported this HMGovt epetition !
~ *3,941 voted so far ~(That's a lot of irate investors?)
~~~~AND THEY CAN'T ALL BE WRONG ?
*How the big players transfers YOUR money into THEIR money !
KBC was tipped in Investors Chronicle on Friday by Simon Thompson. Very positive write up on the company. He is very bullish on the software side of the business with recurring business and the higher margin larger projects. He now has short term price target of 165p, within 6 months. He also mentions that the house broker, Cenkos Securities envisages a share price above 200p. Fingers crossed!
It is estimated that over 90% of AIM stocks are INFECTED by short-sellers !
# IF you were a short-seller, BLUFFING, (basically manipulating a shares' price) about a company's overvalued share price, you might not want to *draw attention to yourself since you could get accused of stock manipulation. So you would hope (OR PLAN FOR) others to get involved and to present SEEMINGLY GOOD REASONS to short the stock.
You would want to put AS MUCH FEAR INTO 'LONGS' as possible and would use high volume short trading as well as buying to drive the share price down as low as you can and as long as you can. You really want the longs to fold and to get out of the game. If you are consistently seeing sellers overwhelming buyers driving a share price down as a stock seems to be going up, I can assure you it's probably shorts' selling, since longs are totally motivated to sell their shares at the highest possible selling price. #
IT is easier to tank a share price, rather than make it go UP, by short-selling.
RUINOUS to genuine investors.
They may be able to buy in cheap BUT what's the good, if the stock never really recovers?
AND when they have got you all hooked on the 'lovely' new all-time LOW.....They'll SHORT IT AGAIN !
# ChalieHarper - posted on iii
IF a fund owns a large share holding in a firm and is long.... whilst waiting for its end game to materialise, it loans out any number of its shares to a shorter...the shorter then manipulate the share price down making £X amount when short ended.... the shorter then gives the loaned shares back and splits the proceeds 50/50.
They both make cash, probably during a time when not much is happening with the sp. IT's a WIN-WIN for them but BAD news for the pi's who as usual may have sold at a loss because the cash has to come from somewhere. #
# Axo posted on iii...
These are the kind of people that Winnifreth & Co like to associate with. They aren't helping anyone, and they're a part of a growing awful trend where large short positions open a number of weeks BEFORE a DAMNING REPORT is revealed that completely tanks an SP well before the article could even be reasonably digested.
I would posit that Gotham City research hold even less credibility than Edelman, and yet their research note was apparently convincing enough to knock 50% off the QPP SP in under one hour.
No-one of any note would have stumbled across their 74 page smear. Why would they? It was Gotham's 6th piece of research (term used very loosely) and absolutely no-one I have spoken to had ever heard of them. As such, they held zero credibility and had no natural exposure. It was disseminated beforehand with exacting purpose. #
Momentum is gathering pace and this campaign is moving faster than was ever anticipated !
Thanks to all of you that voted and POSTED over the link/s.
# The fact that these e-petitions require 100,000 signatures is not so important. THAT figure is required in order to get the GOVERNMENT to take ACTION!
Our aim is for the FCA to ACT and we believe THEY WILL do so, on LESS votes required by GOVT. We can expect votes only from the financial fraternity. Other e-petition campaigns DRAW votes from the WHOLE population !
Listing of new shares is truly a game changer. Consultancies in the oil and gas sector are required by clients to have large amounts of cash in the bank for large projects. This ensures that consultancy has sufficient funds/liquidity to complete the project. By raising additional money KBC is serious about bidding for large projects and may increase its profits many fold. Typically, it takes about 6 months to win a major project for most companies, which bodes well for the share price here onwards.
The downstream sector which KBC operates in is picking up rapidly. Investments in the energy starved countries of India and China will only add further impetus, with both countries promising to substantially increase investment in the energy sector. Now is an excellent time to buy. Of course do your own research before buying and good luck!
RNS Number : 0600D
KBC Advanced Technologies plc
25 March 2014
Embargoed until 0700 hrs 25 March 2014
KBC Advanced Technologies plc ("KBC", "the Company" or "the Group")
Preliminary results for the year ended 31 December 2013
KBC Advanced Technologies plc, a leading consultancy and software provider to the global hydrocarbon processing industry, today announces its preliminary results for the year to 31 December 2013.
· Year of major progress and significant change
· Adjusted profit before tax1 up 45% to £8.4m (2012: £5.8m); reported profit before tax of £7.1m (2012: £3.7m)
· Adjusted profit margin1 increased to 12.9% (2012: 9.2%), the highest for 5 years benefiting from early success of the restructuring programme
· Basic earnings per share improved to 9.5p (2012: loss per share of 2.9p)
· Dividend reinstated; recommended final dividend of 1.0p per share
· Good flow of contracts and healthy year end order book of £78.2m (2012: £82.9m)
· Consulting division turnaround on track
· Continued successful investment in Technology division - new product development and integration of Infochem
· Markets continue to offer exciting international growth opportunities
1 Adjusted for development costs carried forward, amortisation of development costs carried forward, amortisation of acquisition
intangibles, share based payment charges and other items which do not reflect underlying operations (see note 3b)
Ian Godden, Chairman of KBC, commented:
"2013 was a year of major progress and significant success. The business delivered better than expected results and benefited in particular from a number of major project wins, the first significant benefits from the acquisition of Infochem and the restructuring of the overall business to improve operational efficiency and bring new talent in the Group."
"The demand for KBC's services remains buoyant throughout most of the world and we are encouraged by the sustainable improvement in prospects for the North American downstream sector, driven by growth in light, tight oil and gas production. We see substantial and continued opportunities for major work in the high growth markets of the world where we have strengthened our presence."
"2014 has started well and, together with the substantial changes made in 2013, we are confident that the Group is well placed to continue to deliver growth in 2014 and beyond."
" Mothercare's price seemed not to care for our long term trend as it flopped below during the session. As a result, near term weakness below 282.25p remains with an expectation of 275p with secondary 263p. Rather strangely, the little dance ..."
" I'd hoped not to find anything interesting to write about LSE:RSA tonight but somehow or other, a walk with my dogs managed to allow the share price to once again intrude on life. We met a chap walking his Labrador and he (not the dog) knows ..."
KBC reinvents process simulation with the launch of Petro-SIM 5
London, UK (17 December 2013) KBC Advanced Technologies plc (KBC) is pleased to announce the launch of the Petro-SIMTM 5 process simulator. This marks an unprecedented leap in value and innovation for the hydrocarbon processing industry with a new, modern, user-centric interface and a simple KBC brand that showcases a number of industry firsts:
Cumulative scenarios to model a processing facility over its expected life, with decision making ability that tests investments and capacity against changing conditions over time in the same simulation (e.g. declining reservoir feeds in upstream oil and gas and crude selection changes in refining). This will unlock millions of dollars of value in capital and operating efficiency currently hidden and lost due to the way other process simulators only allow for a single dimension model.
The inclusion of Microsoft Windows Workflow Foundation technology to allow users to customise their Petro-SIM modelling experience with their own design standards or methods and share them collaboratively with an asset or project team. This technology will decrease simulation time dramatically, allowing more time for the analysis of facility performance and plans.
Easier quality assurance of a process design or simulation model with defined workflow conditions and reporting, leading to fewer mistakes in process design work and more knowledge transfer between experienced professionals and starters in the industry.
Embedded market-leading KBC/Infochem Multiflash technology enhancing the strength of the thermodynamics packages in Petro-SIM, and immediately giving users at hand capability to study hydrate formation and optimise antifreeze circuits in upstream and midstream applications where over injection of inhibitors costs millions of dollars in bottom line performance.
Significant advances in the KBC SIM reactor technology for refining, offering the only refinery-wide capability that includes time and composition change-based poisoning of catalysts and customisation to company design, calibration and operating standards.
Simple, flexible one model, many modes, one price licensing to make implementation easier and more affordable.
I am thrilled to be associated with and announce the launch of the groundbreaking Petro-SIM 5 platform today," said Andrew Howell, Managing Director of Technology at KBC. "KBCs Petro-SIM process simulation platform now delivers easily the best value in the market of steady state and dynamic process simulators, and the biggest advance in the industry in over twenty years. With a new, modern usability paradigm using ribbon bars, the inclusion of time series cumulative scenarios and accumulations to execute future facility expansions or operating strategies in one model, the ability to add your own design specifications or workflows to customise your simulation, and the inclusion of a new fluids environment based on our award-winning Multiflash PVT technology, KBC is reinventing process simulation.
We have listened to the needs of the industry for more innovation and simple licensing, and our promise is to deliver the best value for money and most exciting user experience in the industry. For the Upstream production facilities market, we deliver facility models that understand your field plans, and in Refining we are the only provider of refinery-wide modelling using your own standards, added Andrew.
As an independent process knowledge provider, Billington Process Technology AS (BPT) in Norway has enjoyed being a beta tester of the new Petro-SIM 5 simulation software. Per Billington, President of BPT, commented, A step change has occurred in the world of steady state simulation tools. With the inclusion of time series scenarios and accumulations, not only is less time required for building and re-using models, but also the need for large numbers of cases and time c
Badly copied message from IC ; but very encouraging !! NB large gap before article main body
registrar in the past week. I also noted that Kestrel Partners, the investment manager of Kestrel Opportunities, has just acquired another 75,000 shares at 89.55p to raise its stake to 7.38m shares in KBC Advanced Technologies
(KBC: 92p), a consultancy and software provider to the global hydrocarbon processing industry. Kestrel now owns 12.48 per cent of the company's issued share capital. Oliver Scott, non-executive director of KBC, is a founding partner of Kestrel and holds a beneficial interest in Kestrel Opportunities. It is fair to assume that Kestrel was given the green light by KBC insider, Mr Scott, before the above transaction took place.
Clearly, Kestrel was impressed by October's bullish trading update from KBC. I had expected as much as ahead of that announcement I lifted my fair value target price on the shares to 100p ('Buy the break-out', 6 September 2013). Broker Cenkos Securities also have a discounted cash flow valuation of 100p-plus on the shares.
Moreover, having taken out the 80p resistance level post the release of the half-year results in October, the shares are now making an assault on the 91p high dating back to February last year. Beyond that the next resistance level is 100p. I have little reason to change my upbeat stance on the shares. The price action in the past few months also vindicates my decision to advise buying KBC shares at 69p six months ago ('Fuelled for growth', 5 May 2013). Importantly, the fundamentals also support further upside in the share price.
Ride the earnings upgrade cycle
As I have pointed out in my previous articles, KBC has been showing signs of entering an earnings upgrade cycle as the recovery in the business gathers pace. Key areas I look for in potential recovery plays are: a business emerging from a restructuring with a much slimmer fixed cost base, and so offers potential for a greater proportion of future revenue to drop straight down to the bottom line; and a return to revenue growth to build on the higher operational gearing. On both counts, KBC is ticking the right boxes.
In fact, buoyed by a raft of contract wins, revenues in the six months to end-June surged by 15 per cent to £31.7m, of which an eye-catching £9.6m was derived from the higher-margin technology segment and the balance from consultancy work.
Contracts won include five-year agreements with a Japanese refiner worth £1.8m, and a similar deal with a US refiner worth £1.8m. KBC also won a $16m (£10m), seven-year contract for the provision of Multiflash software, maintenance and support services to a large oil and gas services company, in early May. The contract is an extension to a previous royalty agreement between the client and Infochem, a company that KBC acquired 15 months ago, and will enable the integration of Multiflash within all of the client's production software applications, which are used by the majority of oil and gas companies worldwide. These contract wins are in addition to the one with EP Petroecuador (EPP), the integrated state national oil company of Ecuador, worth $100m (£64.5m) over a period of four years. KBC is working with EPP to improve its core work processes and support systems, as well as develop the technical capability of the workforce.
So, with the benefit of a lower cost base, and rising margins on contracts won, operating margins quadrupled to 10 per cent in the first half. Furthermore, a £84m pipeline of contract work is an all-time high and includes £8m of contract wins since July. In turn, this prompted analysts to upgrade their earnings estimates last month.
Post the interim results, house broker Cenkos Securities bumped up its full-year pre-tax profit estimate from £7m to £7.5m on revenues of £66m, up from £5.5m and £63m, respectively, in 2012. On this basis, expect full
Super results from this small company which has not been on too many investors' radar. This oil/mining services sector is one where we are going to see further consolidation - AMEC's opportunistic offer for Kentz Group is a portent in my view. With a full order book and very good exposure to a number of overseas markets, there is further prospective growth for the relatively patiient. Anyone interested - have a look at MDM Engineering but as always DYOR
RNS Number : 5980I
KBC Advanced Technologies plc
04 July 2013
4 July 2013
KBC Advanced Technologies plc
("KBC" or "the Company")
The Company announces that on 4 July 2013 it received notification of the following dealings by a director of the Company and his related parties in the ordinary shares of 2.5p each in the Company (the "Ordinary Shares").
Kestrel Partners LLP ("Kestrel") acquired 130,000 Ordinary Shares at a price of 78 pence per Ordinary Share and 100,000 Ordinary Shares at a price of 76 pence per Ordinary Share on 4 July 2013 on behalf of Kestrel Opportunities, a cell of Guernsey Portfolios PCC Limited ("Kestrel Opportunities").
Following the transactions referred to above, Kestrel Opportunities holds 7,102,510 Ordinary Shares, representing 12.02% of the issued share capital of the Company.
Oliver Scott, Non-Executive Director of KBC, is a founding partner of and holds a beneficial interest in Kestrel, the investment manager of Kestrel Opportunities, and is a shareholder in Kestrel Opportunities. Mr Scott therefore has a legal interest in a total of 7,102,510 Ordinary Shares, representing 12.02% of the issued share capital of the Company.
I have been keeping my eyes peeled for companies on my watchlist that are showing signs of entering earnings upgrade cycles. I have dedicated a whole chapter to this subject matter in my new book, Stock Picking for Profit, and for a very important reason. Namely, if you can catch the companies early enough then the share price gains can be substantial. But you have to know what to look out for first.
So, when KBC Advanced Technologies (KBC:69p), a consultancy and software provider to the global hydrocarbon processing industry, announced a major contract at the end of last year with EP Petroecuador (EPP), the integrated state national oil company of Ecuador, I certainly took note. KBC is working with EPP, both directly and through a major subcontractor, to improve its core work processes and support systems, as well as develop the technical capability of the workforce.
The contract is worth $100m (£66m) over a period of four years, a significant sum given KBC generated annual revenues of £63m last year.
Not surprisingly, the contract underpins a large amount of the company's forecast revenues both this year and next. It also means that there is scope for earnings upgrades if KBC is able to win enough new contracts from other companies. And this is exactly what appears to be happening as KBC has just announced a $16m, seven-year contract for the provision of Multiflash software, maintenance and support services to a large oil and gas services company.
The contract is an extension to a previous royalty agreement between the client and Infochem, a company that KBC acquired in June 2012, and will enable the integration of Multiflash within all of the client's production software applications which are used by the majority of oil and gas companies worldwide.
Strong profit growth in 2013
Before the EPP contract was announced analysts at broker Cenkos Securities were forecasting KBC would make pre-tax profits of £7m on flat revenues of £63.9m this year. This is a sharp rise on the £5.5m of profits made in 2012, a year that was dogged by a painful profit slide; working capital pressures that forced KBC to raise £1.3m from institutional investors and axe the dividend; delays in the renewal of a Latin American contract which held back revenues at the company's high-margin software business; and a restructuring programme that led to staff cuts. The restructuring aims to save KBC around £900,000 a year, which accounts for almost two-thirds of the profit increase expected this year.
However, those problems are all history now. When KBC announced its full-year results in March, the company had a record level of contract awards and boasted an order backlog of £82.9m at the year-end, up from £48.7m a year earlier. And this order intake has clearly continued into 2013.
Ahead of a full trading update from KBC later this month, broker Cenkos is maintaining its full-year estimates. Currently, analysts are looking for 2013 pre-tax profits of £7m and EPS of 7.3p on revenues of £63.9m, rising to £8m and 8.3p, respectively, on turnover of £67.1m in 2014. But, given the newsflow to date, it is only reasonable to expect a positive trading update in a few weeks time and one potentially with scope to prompt upgrades from Cenkos. KBC has its annual meeting on Thursday 23 May. There should also be positive news on the dividend which Cenkos believes will be reinstated this year. The forecast is for a 1.6p a share payout.
KBC can certainly afford it as the company ended last year with net cash of £13.3m, or a third of its market value. That's the equivalent of 22.5p a share. Strip that out from the current share price of 69p, and in effect KBC shares are being priced on six times earnings estimates net of cash.
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