08/09/2006
Bombed-out oil industry consultant KBC looks an interesting turnaround situation, having reported its first profit since 2003 at the interim stage after it pushed sales up 27% to £17.3m. Losses of £1.7m were converted into pre-tax profits of £400,000, leading to earnings of 0.46p.
Fronted by new chief executive George Bright, KBC delivers consulting services, planning advice, training and energy price forecasting to clients in the oil refining and petrochemical industries. ‘We help clients run refineries better by improving maintenance and planning,’ he explains, ‘and we also provide software that simulates the refinery. It’s a powerful tool that helps refineries make changes’. Sole rights to this software were clinched in October 2004 following a troublesome litigation bout.
During the half, contract wins were evenly split across the Americas, Europe, the Middle East and Africa, and Asia, with KBC generating record margins from oil refining clients. ‘There’s an enormous drive to ensure refineries are up and running 24/7, with oil and crude prices high,’ added Bright. The strong growth first witnessed in last year’s latter quarter continues, and Bright has his eye on larger, longer-term deals offering better visibility and margin.
Alongside organic growth, acquisitions bringing scale are likely to feature (part of the rationale in migrating down from the Main Board in June). KBC hit the acquisitions trail in February, acquiring Denver-based training company TTS, a specialist in ‘human performance’ improvement that works with oil majors in North America.
For 2006, house broker Arden Partners predicts a return to annual profits, with last year’s £2m deficit to swing to pre-tax profits of £1.4m. The shares certainly have speculative appeal at current levels.
| Market cap: | £17.8m |
| PE Forecast: | n/a |
| Share price: | 33p |
| AIM | £16.27m |
28.50p
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-1.00p
|
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| Other company articles: |
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