Gulf Marine Services - new contract announced, good news continues, shares looking undervalued at 18.80p

Mark Watson-Mitchell - 30.12.2025

This morning Gulf Marine Services (LON:GMS) has announced a two-year contract extension for one of its Mid-size vessels operating in the GCC region, which includes one firm year and a one-year option, increasing the company's backlog to $607m.

This extension is seen as a strong endorsement of the company's strategy and fleet performance, positioning GMS to deliver sustainable value with a robust backlog and a supportive industry outlook.

The Group's broker considers that it now has a significant order book, adding to its revenue visibility.

Management Comment

Executive Chairman Mansour Al Alami stated that:

"Closing the year with this award is a strong endorsement of GMS's strategy, fleet performance and disciplined execution.

With a robust backlog and a supportive industry outlook, we remain well-positioned to deliver sustainable value for our stakeholders."

The Business

The group, which was founded in Abu Dhabi in 1977, has become a world‐leading provider of advanced self‐propelled self‐elevating support vessels (SESVs).

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

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 14 SESVs is amongst the youngest in the industry.

The vessels support GMS's clients in a broad range of offshore platform refurbishment and maintenance activities, well intervention work, offshore wind turbine maintenance, as well as offshore platform installation and decommissioning and offshore wind turbine installation.

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.

Broker's View

Analyst Daniel Slater, at Zeus Capital, continues to look for new contracts and delivery of revenues, and, as deleveraging continues, a commencement of shareholder returns in 2026.

He considers that the shares have a 32p value.

My View

This group is undervalued, with its shares at 18.8p.

I expect them to firm up more ahead of the next piece of corporate news.

I now set a new target Price of 23p for 2026.

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

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

(Profile 30.12.25 @ 18.8p set a Target Price of 23p)