Small Cap Catch Up Featuring Gulf Marine, Global Ports And Marlowe

Global Ports Holding (LON:GPH) – Shares Are A Hold Awaiting Offer Terms

Last Friday morning, when announcing a Trading Update for the year to end March 2024, Mehmet Kutman, Co-Founder, Chief Executive Officer and Chairman, stated that:

“The 2024 Reporting Period was one of significant achievement for Global Ports Holding.

We successfully expanded our cruise port network, completed our largest-ever investment project, and increased our shareholding at a number of key ports.

In addition, we strengthened our balance sheet through a successful investment-grade-rated issuance of secured private placement notes and extended the concession length at a number of ports.

We have started the 2024 cruise season strongly and we are well positioned to be a key enabler and beneficiary of the cruise industry’s continued growth and success in the years ahead.”

That was issued by the company at 7.00am, to be followed at 11.36am by an announcement from Global Investments Holdings, which holds 59% of the GPH equity, stating that as the controlling shareholder it is convinced of the merits of moving the business into private ownership and intends to seek delisting of the company and taking it private. 

It stated that it was therefore considering whether to make a possible cash offer for the shares that it does not already own, possibly worth $3.00 a share for GPH.

At 7.03am on Monday the GPH Board announced that an indicative non-binding proposal had been received by the board of GPH, which will consider GIH’s proposal with its advisers, adding that a further announcement will be made if and when appropriate. 

Last Friday, upon the possible bid news, the £190m capitalised group’s shares hit 290p, on the back of 1.39m shares being traded, they closed that night at just 246p.

Last night the shares rested at around 249p awaiting further developments.

I would suggest that holders should out for the terms, if any, before selling into the current situation, which feels to me as though it is being held down in price.

(Profile 11.11.22 @ 81.5p set a Target Price of 100p*)

(Profile 19.06.23 @ 196.5p set a Target Price of 220p*)

Gulf Marine Services (LON:GMS) – Zeus Capital Has A 28p A Share Value Out

Way back in 2020, Seafox International chased GMS and wanted to bid for the whole group.

The combination of the two businesses would have made a wonderful fit, but I understand that personalities interfered with such a progression.

So similar in its operations to GMS, Seafox is a leading global offshore jack-up company, providing services to support the oil & gas and renewable industry.

It owns and exclusively manage ten self-elevating jack-up units, with its national and international clients within the oil & gas and renewable energy industry benefitting from its wealth of experience in accommodation & crane support, well testing & workover, transport & installation and decommissioning.

Furthermore, Seafox also offers temporary accommodation units for offshore locations and on-board vessels.

A lot has gone with fast seas in the intervening years – so it was with some surprise, or was it some disappointment, that I noted that the BVI registered Seafox has reported a reduction in its holding in GMS, now down to 28.49% (29.15%), which was due a dilution of its position after an increase in GMS’s share capital.

GMS has recently been announcing a number of new and renewed contracts, with its Order Book now standing at some $431.2m.

Analyst Daniel Slater at Zeus Capital values the group’s shares at 28p each.

His estimates for the current year to end December suggest sales revenues of $167.7m ($151.6m), with adjusted pre-tax profits quadrupled to $52.0m ($13.1m), lifting earnings to 4.1c (0.9c) per share.

On Monday of this week there were some 4.9m shares traded in GMS, with them hitting a three-month low of 17.35p.

Last night they closed at 18.47p, valuing the whole group at just £203m.

In my view they are heading a lot higher yet.

(Profile 30.11.23 @ 13p set a Target Price of 16p*)

(Profile 22.01.24 @ 15.95p set a Target Price of 19.50p*)

Marlowe (LON:MARL) – Looking Forward To The Finals In The Next Fortnight

I was interested to note that last Wednesday, Octopus Investments, the UK’s largest manager of Venture Capital Trusts and investments that qualify for relief from inheritance tax, reduced its holding from 7.99% to just 6.57% of the safety and regulatory compliance services group’s equity.

The £423m capitalised group is a leader in business-critical services which ensures compliance with strict regulations and insurance requirements across Fire Safety & Security, Water & Air Hygiene and Occupational Health.

It has a national footprint and serves over 30,000 customers across office complexes, high streets & leisure facilities, manufacturing plants and industrial estates, and include thousands of SMEs, local authorities, facilities management providers, multi-site NHS trusts and FTSE 100 companies.

Ahead of its Full Year Results, to end March 2024, being declared within the next couple of weeks, analyst Peter Renton at Cavendish Capital Markets remains bullish about the group, especially after its £150m special dividend to shareholders, as well as the £75m share buyback programme.

Those moves are subsequent to the group selling off certain of its Governance, Risk and Compliance Assets to Inflexion Private Equity for a net £405m, which enabled MRL to clear all of its debt and leave some in the pot as working capital.

Surely that disposal was good news, but it is worth noting that there are still some sizeable ‘short positions’ out there against the stock, with GLG Partners and ActusRay Partners being the biggest players.

The shares, ex the 155p dividend, are weaker at 436p.

On 23^rd May, I suggested that the group’s shares were offering good upside but were certainly not for chasing until after the Special Dividend payout.

Let us get the digestion of the 2024 results announcement out of the way first.

(Profile 30.01.20 @ 313p ex set a Target Price of 395p* ex)

(Asterisks * denote that Target Prices have been achieved since Profile publication)