Gulf Marine Services – after touching 19.25p on yesterday’s good news, its shares fell back on profit-taking to 18.40p, looking appealing ahead of its Finals, brokers TP 30p

20.03.2025

Yesterday saw analysts upping their estimates for the current year, following news from Gulf Marine Services (LON:GMS) that it had secured yet another contract win in the Middle East. a leading provider of self-propelled, self-elevating support vessels to the offshore energy industry,

Last Thursday morning the group announced that two of its vessels had secured three-year contract extensions with a major National Oil Company in the Middle East.

At that time Chairman Mansour Al Alami stated that:

"This contract extension highlights the robust and ongoing demand for our vessels in the region, driving consistently high utilisation rates across our fleet.

It reflects the trust our clients place in GMS's capabilities and reinforces our strong position in supporting the Middle East's offshore energy sector."

Yesterday’s announcement from the group stated that it was pleased to announce that it had secured a new contract for an additional vessel in the Middle East.

The contract, awarded by a major regional client, spans an initial term including extensions of seven months.

The group declared that this additional vessel, which has been sourced to meet the demands of this project, is expected to support a range of offshore operations, leveraging its advanced capabilities to deliver tailored solutions for various projects in the region.

Mansour Al Alami commented:

"This award underscores GMS's ability to source and provide customised solutions to our clients and demonstrates our flexibility in meeting current as well as future demand."

The Business

Founded in Abu Dhabi in 1977, the £190m-capitalised Gulf Marine Services has become a world-leading provider of advanced self-propelled self-elevating support vessels.

The group’s fleet serves the offshore energy industries from its offices in the United Arab Emirates, Saudi Arabia, and Qatar.

Its 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 group operates a modern fleet of 13 highly versatile self-propelled lift boats, across international markets.

Its vessels provide a stable platform for delivering a wide range of safe and efficient services, primarily in the offshore oil, gas and renewable energy sectors.

The versatility of the group’s vessels' meets the demand of its clients, to provide cost-effective solutions, while minimising their environmental footprint.

Prior to yesterday’s announcement, the GMS fleet consisted of 13 some SESVs, which is amongst the youngest in the industry.

They are commissioned to support the group’s clients in a broad range of offshore platform refurbishment and maintenance activities, well-intervention work, and offshore wind turbine maintenance work, as well as offshore platform installation and decommissioning and offshore wind turbine installation.

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 that 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 client’s requirements.

Group Final Results For 2024 Due Soon

Within the next month or so, the group is expected to announce its results for the year to end-December 2024.

On Tuesday 17th December, just before the 2024 year closed, the company guided the market to expect better than anticipated results for the year.

That was when CFO Alex Aclimandos stated that:

"We are thrilled to share a further upward revision in our guidance.

The growth in EBITDA, combined with reduced finance costs, will further support GMS's ability to deliver value to clients and investors, as it transitions into a more agile organisation."

Analyst View

At Zeus Capital, analyst Daniel Slater has a 30p a share valuation out on the group’s shares.

For this year to end-December 2025, he has increased his estimates on the group’s performance, now going for sales of $184.3m, compared to his 2024 estimate of $168.4m, with adjusted pre-tax profits increased to $56.7m (est 2024 $43.6m), with earnings of 4.4c (est 2024 3.3c) per share.

In My View

I remain confident that this group is progressing well enough to be on track to score that Target Price of 30p.

At just 18.40p the shares of Gulf Marine Services offer a very useful upside to chase in 2025.

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

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

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