Kentz Announces Pre-Close Trading Update
Kentz Corporation announced a pre-close trading update ahead of its results for the year ended 31 December 2013, due to be published on 24 March 2014.
- Diluted earnings per share for 2013 in line with our expectations, reflecting double digit growth on 2012
- Completed acquisition of Valerus Field Solutions on 3 January 2014 for US$435m
- Kentz standalone backlog of US$3.1bn at year-end, up 19% (Dec 2012: US$2.6bn), combined Kentz and Valerus backlog on completion of US$3.5bn
- Order intake up 29% to US$2.2bn for 2013 (2012: US$1.7bn)
- Pipeline of prospects up 18% to US$15.6bn at Dec 2013 (Dec 2012: US$13.2bn)
- Gross cash balance of approx. US$245m at the end of 2013
Kentz Corporation has achieved growth in backlog and with the addition of US$400m backlog from Valerus, the total group backlog now stands at a record level of US$3.5bn. At the end of 2013, Kentz, excluding Valerus, had 69% of 2014 forecast revenues under contract in line with expectations and also with prior years’ experience. For the combined group, Kentz has approximately 74% of 2014 forecast revenues under contract.
The Technical Support Services business unit has performed well in 2013 with particularly strong results in Canada, Saudi Arabia and Papua New Guinea. Kentz Construction business in Australasia has experienced growth in activity largely due to the Gorgon LNG project. The company’s EPC business has performed strongly in Africa and Australasia and Kentz has experienced good success in securing new awards in the second half of 2013.
The group’s cash position remains strong. Gross cash at the end of December 2013 was approximately US$245m and provides a sound financial base from which to support continued growth. Post year-end, the term loan facility of US$400m, arranged for the Valerus acquisition, was utilised to complete the transaction.
Christian Brown, Chief Executive Officer of Kentz commented: “I am pleased to report that we are starting the year in a very strong position and foresee the delivery of yet another strong performance in 2014. 2013 has been a very busy year for bidding activity; with record levels of bidding undertaken adding to the strong growth in our order intake and year-end backlog. Additionally, there are a number of bids outstanding that will be awarded in the first half of 2014.
“2013 has also been very busy in terms of corporate development activity and we are delighted to have completed the acquisition of Valerus earlier this month. The Board of Kentz is confident that this addition to the group will be earnings enhancing1 and together with our existing business will continue to create future value for our shareholders”.