01/07/2008
Energy sector consulting and technology group KBC, recommended by Growth Company Investor at 44.5p last year, has cheered investors with a first-half trading update and upbeat contract news.
During the six months to June, KBC, which helps refineries run more profitably and operate safely, enjoyed strong demand ‘for all our services’ across the buoyant oil and gas market, especially in the areas of capital project support, energy optimisation and ‘human performance improvement’.
A key contract highlight outlined by chief executive George Bright was the clinching of a ‘learning and development’ deal with a US refiner across sites spanning North America, Western Europe, Southern Africa and the Asia-Pacific Rim, which could generate up to US$9m (£4.5m) in sales in 2008. KBC is building good contract momentum, having been awarded more than £27m of work in the first half, an increase of more than 40% on the value of deals secured in the prior year period – the ‘backlog’ at 30 June was around £36m, up from £30m at the year-end.
With sales and profits growing strongly, first-half pre-tax profits are expected to have reached the £2.9m delivered for the whole of 2007, and KBC is seeing ‘no signs’ of any weakening in its markets, despite wider economic worries.
For December 2008, analysts are looking for a strong pre-tax advance to £4.14m, giving earnings of 4.9p. On a prospective multiple of 11.2, shares in KBC, which are dividend-paying yet modestly priced, should have further to go.
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| Market cap: | £31.4m |
| PE Forecast: | 11.2 |
| Share price: | 55p |
| AIM | £34.26m |
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