Gulf Marine Services - the contract news keeps coming, shares 18.1p, TP 32p

Mark Watson-Mitchell
13 minutes ago
2 min read

Mark Watson-Mitchell - 24.12.2025

Following on from yesterday's contract news item, this morning, Gulf Marine Services (LON:GMS), a leading provider of self-propelled, self-elevating support vessels to the offshore energy industry, has announced the award of a contract covering one of its Large-class vessels in the Middle East.

The contract spans a total of two years including options.

Management Comment

Executive Chairman Mansour Al Alami stated that:

"We are extremely happy to have secured this contract, which once again highlights the strong demand for our vessels and services.

The additional contracts we announced recently add up to 2,354 days and we look forward to further strengthening our backlog."

Broker's View

Analyst Daniel Slater, at Zeus Capital, has today commented that:

"GMS operates a fleet of 14 liftboats, which it leases to clients primarily in the Middle East but also more widely including in Europe.

The company's vessels are used for both offshore maintenance and to assist with EPC projects, across oil and gas and wind.

Global upstream underinvestment in the late 2010's/early 2020's continues to reverse, including key GMS clients ADNOC, Saudi Aramco and Qatar Energy pursuing new activity programmes.

The Middle East, with its favourable geology, shallow water and extensive oil services availability is very competitive as a global oil and gas province, making it a focus for increased upstream spending, even at more moderate oil prices.

This is all contributing to an ongoing relatively tight market for GMS's liftboats, with utilisation (88% in Q1-Q3 2025, from 92% in 2024 and 94% in 2023) and day rates (US$36.0k/day in Q1-Q3 2025, from US$33.1k/day in 2024 and US$30.3k/day in 2023) continuing to support revenues overall.

We forecast this to drive ongoing increases in GMS EBITDA (US$87.5m reported for 2023, US$100.4m for 2024, and US$101-109m then guided for 2025 and US$105-115m targeted for 2026), helping continue to pay down debt and drive a transfer of value from debt to equity (underpinned by the asset value of GMS's fleet).

The company is also now looking to begin returning value to shareholders by establishing dividends and/or buybacks in due course, alongside potentially adding further vessels. In anticipation of more new contract wins, potential further guidance upgrades, and periodic financial results to highlight all this to the market, we have a positive outlook for the shares and value them at 32p."

My View

These shares, now at 18.1p, are going to do well in 2026, although I am not a fan of BuyBacks, especially when companies have such heavy borrowings.

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