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  • Writer's pictureMark Watson-Mitchell

Aston Martin, Gulf Marine and Hunting

Aston Martin Lagonda Global Holdings (LON:AML) – this luxury marque is for buying

This group will be announcing its Final Results for the year to end December 2023 on Wednesday 28th February.

We have already been given a very clear steer about the sales for the last year, so we are not expecting any surprises.

The loss-making luxury car-making group has reported that it is now in talks with its bankers and other financial advisers on how to cope with the repayment of various loans totalling some $1.4bn – but don’t worry they are not due to be settled until way into next year.

That the company is handling this matter this much in advance is reassuring.

Considering the mega-backers deeply involved in its equity – such as Saudi Arabia, Mercedes Benz and Geely Holdings – I would not reckon there will be any real problems in putting a package together well in front of any ‘calls’ from the bankers.

The guidance given by the company last November, when it was announcing its Q3 results, suggested that we should expect some 6,700 units to have been sold by the group in 2023, with an EBITDA margin of up to 20%, with a depreciation and amortisation of some £360m and capex and R&D of £370m.

It was that news that helped to set the share price rot in, driving the shares down to a low of 170p subsequently.

Just think in July last year they were trading at 396p.

However, I think that you should not let that price fall put you off the company.

It has targets for 2024/2025 of £2bn in revenues, with £500m in adjusted EBITDA and is looking to be getting into a positive free cash flow position from this year onwards.

Just a week ago the company introduced some new models ‘three new jewels in the crown of high performance’ - one of which is the new F1 race car, together with an updated Vantage sports car, as well as the latest Vantage GT3 race car.

The group’s shares have been something of a ‘dog’ in the last few months, trading in the 234p down to 170p price range.

I take the view that this is a cracking business that will gather all the support it needs, whenever it is required.

Bringing it out of operating losses in the next couple of years and breaking it into substantial profitability is not a quick and easy task.

The luxury marque is a British classic and will be protected and enthusiastically supported.

Just ahead of the end-month results announcement I look forward to a visible upward share performance from last Friday’s closing price of just 170p, they are for buying and holding.

(Profile 10.05.23 @ 213.5p set a Target Price of 265p*)

(Profile 30.10.23 @ 213p set a Target Price of 275p)

Gulf Marine Services (LON:GMS) – set to lift a great deal higher yet

I do like the way that the shares of the Abu Dhabi-based lift-boats operator are performing currently, in the first couple of weeks of this month they have been up to 17.75p each, after having been down at 12.20p a month ago.

As the company announced new contracts details in early January, boss Mansour Al Alami stated that:

"As we enter 2024 demand for our services in the region remains strong as reflected by these contract awards, again with overall improvement to average day rates."

The company has the youngest fleet in its market, with some 13 self-elevating support vessels.

A lift-boat is a self-propelled, self-elevating vessel that is used in support of various activities, such as offshore mineral exploration and production or in offshore construction work.

The two major differences centre around speed and cycles, with the speed of the lift-boat jacking system being essential.

A typical jack-up drilling rig elevates at two feet per minute, while a lift-boat could elevate at four to six feet per minute and lower the legs at 14-18 feet per minute.

The company operates support vessels in the United Arab Emirates, Saudi Arabia, Qatar, and Europe.

It offers support for offshore construction and heavy lifting, accommodation and hotel, well intervention and work over operations, and manpower services for the oil and gas sector; as well as for platform maintenance and commissioning, turbine maintenance and commissioning, hotel, crane, and offshore crew transfer services for the renewables industry. 

For the group’s year to end December 2023, analyst Daniel Slater at Zeus Capital is looking for the group to have done well.

His estimates are for group sales revenues to have lifted from $133.2m to $151.7m for the year, with adjusted pre-tax profits rising to $27.3m ($19.5m), lifting earnings up to 2.0c (1.7c) per share.

For the current year he goes for $162.6m sales and a massive lift in profits to $47.0m, worth 3.7c per share in earnings.

At the current level of 17.75p the group’s shares still offer some excellent upside, with my prediction of 19.50p being a very easy aspiration.

In fact, I still see them going a great deal higher than that in due course.

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

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

Hunting (LON:HTG) – I see the shares touching 360p in 2024

Another one of my favourite companies will be announcing its Final Results at the end of this month.

On Thursday 29th February, the oil, gas and energy sector tools and equipment supplier is expected to put out some very good end 2023 figures.

In early January the near £500m capitalised group gave a positive guidance to the market on its last year and its current year outlook.

Analyst Daniel Slater at Zeus Capital now looks for revenues last year of $926.31m ($725.8m), with adjusted pre-tax profits rising impressively from $10.2m to $56.7m, lifting earnings to 25.9c (5.8c) and covering a dividend of 11.0c (9.0c) per share.

For the current year he has $1.11bn revenues, $85.0m profits, 38.9c earnings and a 13.0c dividend.

Slater has an estimated 390p per share valuation out on the group’s shares, which closed on Friday night at 303.50p, upon the end-February announcement I would expect the analyst to upgrade his estimates for the next couple of years.

In all the time that I have been following the company, I have never lost faith in the ability of its Management to cope with the global pressures within its operating sectors.

I consider that the group’s shares are very capable of further price climbing and suggest that they are a very Strong Hold, I still see at least 360p in due course.

(Profile 15.03.21 @ 275p set a Target Price of 350p*)

(Profile 12.04.23 @ 240p set a Target Price of 300p*)

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


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