Gulf Marine Services plc (lon:gms)
Gulf Marine Services – Buy Now Or Wait For Recapitalization?

Gulf Marine Services plc Financials

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Gulf Marine Services plc Share Price
Grade:The Orange Grade - Shares That I Think Show Promise With A Few Caveats.
Title: Gulf Marine Services – Buy Now Or Wait For Recapitalization?
Company: GMS - Gulf Marine Services plc
Share Price Then: 9.38p
Author: Ian Smith
Date: Wed 19 Dec 2018
Comments: Gulf Marine Services hire out oil drilling and exploration platforms and ships with a fleet of relatively new kit.

They have been caught up in the recent drop in oil exploration and today (19 Dec 2018) issued a trading update saying that they expect to breach some of their banking convents by the end of 2018, hence a 60% share priced drop.

The update also included “Whilst the Group can continue to trade effectively in the near-term, the Board is currently considering a number of ways of addressing the Group's long-term capital structure.” In other words there may be a debt for equity swap or a new share issue.

On the plus side they talk about a 70% utilisation of their fleet during 2018 but at depressed rates which are expected to remain depressed in 2019.

As their fleet is new and there is still plenty of exploration to be done the longer term does look promising

As the shares typically has a very low trading volume and spreads around 5%, it seems that it is either a try and day trade it today and tomorrow after that share holders will be stuck in whatever position they have until the re financing is announced and no real recovery until 2020 and onwards.
Read Count: 315/5037

Buy/No Buy In A Nutshell
NegativesIs the oil exploration business dying off forcing the prices charged by drilling equipment hirers down to far?
PositivesA modern fleet and equipment.
Initial Review Price11p
Last Review Price11p
Last Review Date15-Jul-2020
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