KBC Advanced Technologies

KBC, the energy industry consultant that helps refinery owners maximise profits and manage risk, has clinched the single biggest contract in its history.

This is a profit improvement project won with Pemex Refinacion, the refining arm of Mexican state oil firm Pemex, worth some $42m (£30m) and which will see KBC help this long-standing client improve profitability across refineries in Latin America.

George Bright, CEO, said the deal, whose scope has been extended from 2 to 6 refineries, gives KBC ‘a significant increase’ in work backlog for 2011 and should drive consultant utilization improvement for the rest of the year. KBC, whose clients include BP and Petrobras, performed resiliently during the half to June amid ‘relatively static’ refining industry conditions.

On turnover 6% lower at £25.6m, pre-tax profits eased to a still-creditable £1.4m (2009: £2.4m). Global demand for oil grew, but very slowly, during a mixed half with China, India, the Middle East and Latin America exhibiting strong growth, yet areas of overcapacity such as Europe showing low growth or even contraction.

Nevertheless, KBC exited the half with £39.8m of orders in the bag, up markedly from £35m a year earlier and said a better second half looks feasible, with trading having turned up in the second quarter. Closing the half with £1.7m net cash, KBC confidently upped half-time dividends 22% to 0.55p and is forecast to deliver pre-tax profits of £4.9m (2009: £5.7m) and a dividend hike from 1.6p to 1.8p for the year.

Swapping hands for only ten times earnings and offering a healthy 3.5% yield, KBC shares, first recommended by Growth Company Investor at 44.5p in 2007, remain a firm hold ahead of a return to growth.