Kentz delivers upbeat outlook for sector

Oil and gas-focused Irish engineering firm Kentz Corporation, a target of potential takeover interest, delivered an upbeat outlook for the industry in its first-half results yesterday.

Kentz chief executive Christian Brown

“Across the global engineering and construction space, many companies are indicating a more cautious outlook for the future than previously observed.

“However, the markets in which Kentz operates continue to be busy, and the first half of 2013 has seen one of the most active periods of bidding ever experienced by Kentz,” the company said.

Kentz is involved in engineering procurement and construction and in technical support services, mainly in the oil, gas, petrochemicals, mining and metals industries.

It works on giant oil and gas projects including Gorgon LNG in Australia and the Tengiz oilfield in Kazakhstan.

The company said its pipeline of bidding opportunities had risen 17% over the past 12 months to $15.0 billion and that it had secured a bid win rate in that period of one in three. It submitted a record $4.5 billion of bids during the second quarter and saw “continued momentum” into the second half.

Pretax profit rose 3% to $52.7m (€39.5m), the company said. It raised its dividend by 20% to US6.6c.

On Aug 19, the company said it had rejected two takeover approaches, one from larger London-listed rival Amec at 565-580p a share, and a lower one from Germany’s M+W Group. It said both undervalued the company.

The Sunday Times since reported that top shareholders in the company have told suitors they would be open to a takeover at a price of about 650p a share.

Kentz shares, which climbed after news of the approaches, were little changed in early trading yesterday, up 1.2% at 573p, for an overall value of about £670m (€747bn).

Chief executive Chris Brown repeated that the two approaches had undervalued Kentz and that no further offers had been received since.

“I spoke to some (shareholders) last week and I expect to have spoken to pretty much all the top 10 by this week,” he said.

“I expect and continue to expect good support from them ...

“If an offer comes in, it will be looked at and acted on in the best interest of our shareholders”.

He would not be drawn further on the takeover process.

Analysts have said one of the attractions of Kentz has been its significant reserves of cash.

Kentz said in its statement that if it cannot find suitable acquisitions, it will consider a return of capital to shareholders.

— Reuters

© Irish Examiner Ltd. All rights reserved

More in this Section

Finding the right place to expand your business and what to look out for when moving

Time to debate the cost of banning ticket touting

Cork firm Dare Technology to make waves in marine industry

Dundalk must not view eBay loss as full-time result


Breaking Stories

EU Commission to issue findings against Ireland tomorrow on 'sweetheart deals'

Ireland to appeal EU ruling calling Apple tax deal 'illegal'

Irish Life announces new health insurance company

Report reveals wholesale gas prices have dropped more than a third

Lifestyle

Blurring the lines between humanity and machines

Meet the woman who is set to become the first Irish representative in a pageant that celebrates curvy ladies

What did Vikings ever do for us?

What makes good product or packaging design?

More From The Irish Examiner