New contract win and trading update

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

 

FOR IMMEDIATE RELEASE

26 May 2020

 

Gulf Marine Services PLC

 

New Contract Win and Trading Update

 

Gulf Marine Services PLC ("GMS" or the "Company") announces a new contract award, and a trading update.

Contract Award

GMS announces the award of a seven-month contract (firm plus options) for an E-Class (large) vessel.  GMS will provide support for offshore activities on behalf of a Middle East client.  The vessel will be mobilised for the start of operations during the summer of 2020.  GMS has also secured a two-month contract extension of a K Class (small) vessel, also for a Middle Eastern based client.  This increases total GMS fleet utilisation to 82% for 2020.  The last time the GMS fleet operated at these levels of utilisation was in 2015 on a calendar year basis.

Trading Update 

Year to date performance remains ahead of the Business Plan, with April actuals now in.  The order book continues to be built, and fleet utilisation for 2020 is now at 82% with a further 53% of the fleet secure for 2021.  Contract rates reflect current market conditions and remain within our expectations.

Progress on costs continues with further reductions onshore and offshore, where reductions of 6% in the offshore organisation through crewing efficiencies have been achieved so far this year.  This is in addition to a 22% reduction in the onshore organisation through headcount reductions achieved in the first quarter.

Onshore staff continue to work remotely, and no material interruptions in the supply chain have been incurred.  Of the two vessels with reported COVID-19 cases, one has remobilised to the field already following crew testing and deep-cleaning, and the other is preparing to remobilise.

Guidance for 2020 ($57-62 million EBITDA), previously issued on January 16, and confirmed on May 7 is reconfirmed.

Tim Summers, Executive Chairman, said "Despite challenging conditions in the upstream energy industry, the Company is trading successfully.  Our continued focus on cost reduction, and improving the efficiency of our operations, underpins our ability to win business and compete strongly."

 

 

 

Enquiries:

 

GMS Tim Summers, Executive Chairman Stephen Kersley, Chief Financial Officer Tony Hunter, Company Secretary		+44 (0) 207 603 1515
Evercore (Sole Financial Adviser to GMS) David Waring Edward Banks		+44 (0) 20 7653 6000
BofA Securities (Joint Corporate Broker to GMS) Thomas Milner Ben Winstanley		+44 (0) 20 7628 1000
Investec (Joint Corporate Broker to GMS) Chris Sim Henry Reast		+44 (0) 20 7597 5970
Brunswick (PR Adviser to GMS) Patrick Handley - UK Will Medvei - UK Jade Mamarbachi - UAE		+44 (0) 20 7404 5959  +971 (0) 50 600 3829
Linklaters LLP has been retained as legal advisers to GMS.

Takeover Code Directors' Confirmations

The statement above with respect to projected ranges of EBITDA for 2020 constitutes a profit forecast for the purposes of the Takeover Code (the "Profit Forecast").  The Profit Forecast has been prepared on a basis consistent with GMS's accounting policies, which are in accordance with International Financial Reporting Standards ("IFRS").

 

The Profit Forecast is based on the following assumptions:

 

Factors within the control of GMS

 

•           there will be no material acquisitions or disposals by GMS prior to 31 December 2020;

•           there will be no material disruption in the supplier base of GMS;

•           there will be no material change in the business or operational strategy of GMS; and

•           there will be no material changes to the management of GMS.

 

Factors outside the control of GMS

 

•           there will be no material changes to the conditions of the markets in which GMS operates, including material changes in the capital spending of GMS' customers;

•           foreign currency exchange rates, interest rates and tax rates in the geographic markets in which GMS operates will remain materially unchanged from the currently prevailing rates;

•           the announcement of the agreement with GMS's syndicate of banks or the proposal from Seafox will not impact customer orders;

•           there will be no early terminations of GMS's existing contracts;

•           documentation of the revised debt terms and access to new working capital facilities will be completed in 2020;

•           there will be no material regulatory developments that affect GMS's operations or the operations of its customers; and

•           there will be no material adverse events that have a significant impact on GMS' financial condition.

 

The Directors of GMS confirm that the Profit Forecast has been properly compiled on the basis of the assumptions stated above and the basis of accounting used in preparing the Profit Forecast is consistent with the accounting policies of GMS.

PUBLICATION ON WEBSITE

In accordance with Rule 26.1 of the City Code on Takeovers and Mergers (the "Takeover Code"), a copy of this announcement will, subject to certain restrictions relating to persons resident in restricted jurisdictions, be available at www.gmsuae.com/offer by no later than 12 noon (London time) on the business day following the date of this announcement.  For the avoidance of doubt, the content of the website referred to above is not incorporated into and does not form part of this announcement.

The person responsible for arranging for the release of this announcement on behalf of GMS is Tony Hunter, Company Secretary. 

FURTHER INFORMATION

 

Evercore Partners International LLP ("Evercore"), which is authorised and regulated by the Financial Conduct Authority in the UK, is acting exclusively as financial adviser to GMS and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than GMS for providing the protections afforded to clients of Evercore nor for providing advice in connection with the matters referred to herein.  Neither Evercore nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Evercore in connection with this announcement, any statement contained herein, any offer or otherwise.  Apart from the responsibilities and liabilities, if any, which may be imposed on Evercore by the Financial Services and Markets Act 2000, or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Evercore nor any of its affiliates accepts any responsibility or liability whatsoever for the contents of this announcement, and no representation, express or implied, is made by it, or purported to be made on its behalf, in relation to the contents of this announcement, including its accuracy, completeness or verification of any other statement made or purported to be made by it, or on its behalf, in connection with GMS or the matters described in this document.  To the fullest extent permitted by applicable law, Evercore and its affiliates accordingly disclaim all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any statement contained herein.

 

Merrill Lynch International ("BofA Securities"), which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting exclusively as corporate broker for GMS and for no one else and will not be responsible to anyone other than GMS for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither BofA Securities, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BofA Securities in connection with this announcement, any statement contained herein or otherwise.

 

Investec Bank plc ("Investec"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for GMS and no one else in relation to the Transaction and/or other matters set out in this announcement and will not be responsible to anyone other than GMS for providing the protections afforded to the clients of Investec, or for providing advice in relation to this announcement, the contents of this announcement or any matter referred to herein. 

 

Neither Investec nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Investec in connection with this announcement, any statement contained herein or otherwise.

ABOUT GMS

GMS, a company listed on the London Stock Exchange, was founded in Abu Dhabi in 1977 and has become a world-leading provider of advanced self-propelled self-elevating support vessels (SESVs).  The fleet serves the oil, gas and renewable energy industries from its offices in the United Arab Emirates, Saudi Arabia and the United Kingdom.  The Group's assets are capable of serving clients' requirements across the globe, including those in the Middle East, South East Asia, West Africa, North America, the Gulf of Mexico and Europe.

The GMS fleet of 13 SESVs is amongst the youngest in the industry, with an average age of eight years. The vessels support GMS's clients in a broad range of offshore oil and gas platform refurbishment and maintenance activities, well intervention work and offshore wind turbine maintenance work (which are opex-led activities), as well as offshore oil and gas platform installation and decommissioning and offshore wind turbine installation (which are capex-led activities).

The SESVs are categorised by size - K-Class (Small), S-Class (Mid) and E-Class (Large) - with these capable of operating in water depths of 45m to 80m depending on leg length.  The vessels are four-legged and are self-propelled, which means they do not require tugs or similar support vessels for moves between locations in the field; this makes them significantly more cost-effective and time-efficient than conventional offshore support vessels without self-propulsion. They have a large deck space, crane capacity and accommodation facilities (for up to 300 people) that can be adapted to the requirements of the Group's clients.

The Company's Legal Entity Identifier is 213800IGS2QE89SAJF77.