Brokers Hargreave Hale gave the following Valuation for HMY

VALUATION
The nearest comparisons to this Group are Sondex, trading on a current year multiple of 14 and Weir Group which typically trades on multiples of 12 plus. We would argue that Hamworthys prospects are brighter than both these companies in view of the strong order book and the global positioning. Fully taxed earnings of 13p this year and 16.5 p for the 2005/6 end March, suggests a current year PE of 9.9x and a prospective PE of 7.8x. There is a prospective yield in excess of 4%. If trading on a similar PER to Sondex the shares would be valued at in excess of 180p. We would argue that a premium to Sondex is justifiable, in particular because of the potential ramp up to sales as a result of the new product pipeline now gaining client acceptance in what is in any event one of the fastest growing markets in the world.

"Shares" Article relating to Hamworthy (HMY) posted below for info.

With a following wind these shares should double over the next year or so.

Some catty folk in the City say the flotation last month by Collins Stewart
could have been handled better, i.e. at a higher price. It was certainly over
subscribed but the rating is half that of similar oil sector service companies
including Sondex.

I'm long this one from last week.

Hi chester1, good call getting in last week, price has risen a bit since then. Im going long on this one too but it would be nice to end the week with a mid price of around 145 if possible, the market is really unpredictable at the moment so who knows!

FYO Company Financials

The businesses currently comprised in the Group were, prior to a reorganisation in February 2003, operated by a number of different corporate entities. Whilst all of these entities were part of the Powell Duffryn group of companies, not all were part of the current Hamworthy KSE statutory group. As such, the statutory accounts for the year ended 31 March 2002 are a set of dormant accounts. The statutory accounts for the year ended 31 March 2003 include the operations of the Group, with the exclusion of the minor trading operations in Rotterdam and the USA, for the final two months of the year.
The statutory accounts for the year ended 31 March 2004 represent the consolidated position of the Group, which at the time did not include the minor trading operations in Rotterdam and the USA. Accordingly, in order to present the results of the Group on a consistent basis, the Directors have prepared a table of financial information for the continuing operations of the Group for the three years ended 31 March 2004 (see table below) which has not been subject to any external review or audit. The information in respect of the year ended 31 March 2004 has been reconciled to the statutory accounts for 31 March 2004.

Unaudited pro-forma financial information

............Year end 31 March 02 Year end 31 March 03 Year end 31 March 04
million
Turnover...........64.4.................87.1.................92.9
Gross profit.......27.3.................31.3.................31.6

Operating profit
before goodwill
amortisation.......4.3...................5.0.................6.2

Profit before
taxation...........4.0...................4.7.................5.8



Dividend policy


Hamworthy intends to pursue a progressive dividend policy with increases in dividends reflecting underlying growth in earnings whilst maintaining a suitable level of dividend cover.
It is envisaged that interim dividends will be paid in December and final dividends in June of each year, in the approximate proportions of one-third and two-thirds respectively to the total annual dividend. It is intended that the first dividend to be paid by the Company following Admission will be the final dividend in respect of the period from Admission to 31 March 2005, which the Company expects to pay in June 2005.

Not the price I had hoped to end the week on, but not bad. The large buys at 137 helped to push the price back up nicely and lets hope for some good news in the press to help things along.

Hope you all have a great Bank Holiday.

J.

jason,

Any chance of a chart in the header post please?

Like the look of this one and thought the shares article was very good. Might be tempted as forwad P/Es for 2005 and 2006 were very undemanding.



cheers GF.

Goldfinger.

Thanks for posting the chart.

J.

Anybody able to post the Shares Article to the site? Sounds like it had a very positive report on HMY and it would be good to see it.

"Shares" Article relating to Hamworthy (HMY) posted below for info.

With a following wind these shares should double over the next year or so.

Some catty folk in the City say the flotation last month by Collins Stewart
could have been handled better, i.e. at a higher price. It was certainly over
subscribed but the rating is half that of similar oil sector service companies
including Sondex.

The shares have edged ahead from the 120p placing price to a new high of 133p
since former owner Nikko Prinicipal Investments placed its 75% stake in
Hamworthy to institutions for 30 million.

Hamworthy is market leader in supplying gas pumps for liquid natural gas
carriers, LPG gas reliquefaction systems and wastewater treatment from tankers.

For the remainder of its product range, such as engine room pumps and inert
gas equipment, it is in second or third place worldwide.

A breakthrough in LNG reliquefaction means that Hamworthy profits could really
rocket in a couple of years time. Giant oil groups Exxon and Conoco are
testing its prototype plant aboard their LNG carriers and are expected to
order a multimillion pound system shortly.

At present LNG carriers burn boiled off gas to produce steam to power the
vessel.

Hamworthy's system reliquifies the LNG and returns it to the cargo during
transportation. The ship can then be powered by more efficient and lower
maintenance diesel engines saving each LNG carrier 3 million a year.

The company has plenty of other new products to unveil over the next few years
including a C2G engine room pump range, membrane bio-reactor technology and a
new deeper offshore pump family.

The world market for LNG is taking off with 33 tankers being delivered this
year, 45 next and in 2006. The normal number has been around 15 a year.

Hamworthy has a record 98 million order book and has been growing sales and
profits at almost 20% a year over the last three years. Its recently enlarged
low cost facility in China allows the company to buy and assemble quality
products at knock-down prices.

There is a global network of sales and service companies including half a
dozen in Europe plus Singapore, Korea, USA and India.

Profit margins are rising and the company should increase profits from 6
million last year to around 7.2 million this year and around 10 million to
March 2006.

This drops the PE to a silly 6 on a 24% tax charge, which looks way too low
for a high-quality lowly borrowed company which is a leader in a high growth
international marketplace.

Thanks Jason.

cheers GF.

Nice move upwards in the share price today but we really need this share to get a bit more exposure before it starts to fulfil its potential. Could do with a couple of broker recommendations but they do not appear to exist as yet.

Anyone know what prompts brokers to initiate a recommendation, is it on the release of financials etc?

Jason usually trading updates, and results. Hoping to go into these in the morning. Shares will obviously do a back up article very soon I should think. Im with most of the big brokers but no one I can find except the house broker as it on the radar yet. I do know that a lot in the city thought that they had been underpriced on flotation. Mores the better for us.

cheers Gf.

Gone into these this morning just over 5,000 shares bought in two transactions.

Seemingly Hargreave Lansdown or what used to be them are tipping them and advising their clients to buy. Dertails can be found at pauly pilots cafe on the Motley fool website.

cheers GF.

Cheers for the update GF, I will take a look on Motley Fool in a bit. Nice steady flow of buys over the last week, I'm hoping we get another tick up in the price soon. Not too bothered if we don't, but I like seeing blue and knowing we are all a bit richer each time it does. LOL.

Good luck and keep the news flowing guys.

J.

Blimey , what does it take to move this one, come on MMs play the game properly.

Buys far exceed sells.

cheers GF.

Strong looking chart.



cheers gf.

gf, Hopefully we will see the fruits of todays trading at start of play Friday with a nice move in the price. I'm amazed it's not moved a couple of ticks during today but as long as the buy's keep coming its all a question of time.

Yup and Im amazed, I had some more this afternoon aswell.

Funny day today, very strange all round.

cheers Gf

Wise move GF, I think today saw the biggest volume of buys yet, which is great. I thought trading would slow once the resulting action from the Shares article faded but this baby just keeps getting stronger.

Interesting article found in I.C. indicating an increase in expenditure by the big oil companies which will have a positive effect for the oil services. Hamworthy is not mentioned directly but similar companies such as Sondex are. Posted below for any interested parties.

Oil services outlook brightens

Business is picking up for oil services companies after a long period of weakness. Consensus estimates for the growth in capital expenditure among major oil companies now stand at around 10 per cent, compared to five per cent at the start of the year. Some think it will be as high as 17 per cent.
The main pick-up has been onshore in the US and Canada, where high oil and gas prices have encouraged an every last barrel mentality. There has also been more activity in the North Sea; Shell said last week that it was increasing capital expenditure in Europe by $150m this year. Most of this will go on projects where there is a quick payback, making the most of high oil prices.
Over in the US, where oil service companies are much bigger, share prices have posted solid gains. The chart below shows the S&P Oil Equipment and Service sub-index over the past year (this includes such giants as Halliburton, Schlumberger and Baker Hughes). In the UK, oil service companies are smaller and more specialised, and don't have their own index. But there have been some notable gains, particularly Sondex, Hunting and Abbot.