Kentz poised to beat forecasts

IRISH construction and engineering company Kentz is expecting to beat analyst expectations when it reports its full-year results for 2008 at the end of March.

Analyst forecasts suggest the company’s pre-tax profits will amount to about $38.5 million (€29m), with earnings per share of around 25c.

However, the it said yesterday it has a backlog of contracts worth $1 billion (against $596m at the end of 2007), net cash reserves of $123.7m, a positive outlook for this year and next, and should see profit and revenue for last year “marginally ahead” of market expectations.

Although headquartered in Clonmel, Kentz’s shares are listed on London’s AIM index and it reports in US dollars.

The majority of its work is carried out overseas including Saudi Arabia, Russia, Indonesia, South Africa, Qatar and the US.

The company has also won the contract for security equipment and CCTV camera services for the new Lansdowne Road stadium. Its main stream of business, however, is electrical and engineering services to global oil and gas companies.

Much of Kentz’s positivity is based around the long-term signs of strong demand for oil and gas, coupled with the continued busy capital expenditure plans for many of its clients. The group said it will consider any strategic investment opportunities that may arise — in the form of joint-venture partnerships, equity investments or outright acquisitions — despite the current market conditions.

“Despite the volatility in world markets we continue to see strong demand for our services in the sectors and regions in which we operate.

“We were awarded some great projects in 2008, which positions the group well for 2009 and 2010. Given the diversity of sectors in which we are involved and our wide range of operations in over 20 countries, we remain optimistic for the company’s future success,” said Kentz chief executive Hugh O’Donnell.

“We are continuously looking at innovative ways to increase our value added service to reduce capital costs and assist our clients in getting projects successfully off the ground,” he added.

Kentz gained 11.28, or 11%, to 108.5 on London’s AIM yesterday.