I've spent the last few days looking at Hallin Marine, and they tipped me over the edge, announcing a contract win this morning. It looks a quality business.

Hallin floated on AIM in June. Established in 1998, Hallin is profitable - just under $1 million on turnover of $20million last time. market cap just 17 million.

It maintains, installs, surveys and repairs seabed equipment - pipelines etc. The company itself says that it is impacted by activity in the oil market, and when they floated oil was around $55. Now it is as we all know $65. Of course if you believe the oil market is still worth investing in (I have avoided to date) you'll probably like the fact that Halling raised funds at 64p and is currently 55p to buy.

They will benefit from the stronger dollar (lost over $200,00 on currency last year). Their saturation diving systems can support up to 12 people for a month on the seabed and customers have included BP, Shell, Mitsui, Premier and Total. it's important to have regional presence. As well as business bases in Singapore, China and Thailand they are expanding into the UAE.

It looks a good way to have exposure to oil in a relatively low risk area.

Worth taking an initial stake imho, as i have this morning.

Here is this morning's contract, which represents 25% of last year's turnover:

'Hallin Marine Subsea International plc

Hallin Marine Wins US$5m Order to Support Gulf of Thailand Pipeline

Hallin Marine, the AIM quoted provider of subsea solutions to the oil and gas
industry, announces that it expects to supply Diving Support Vessel services to
the PTT 3rd Pipeline Construction Project in the Gulf of Thailand. Hallin is in
receipt of a letter of intent* from Hyundai Heavy Industries ('HHI') regarding
this contract. This is in addition to Hallin's contract with HHI, signed in
July, to supply construction diving services to the same project.

The Diving Support Vessel work will take place in two phases, the first starting
in December 2005 and the second scheduled for February 2006, with a contract
value of approximately US$5 million.

The PTT 3rd Pipeline Project is a major expansion of the Thai Offshore Natural
Gas Infrastructure, which provides gas for the domestic market. A 606km
pipeline and associated offshore facilities is to be constructed from PTT's
Arthit field in the Gulf of Thailand to a landfall at Layong, south of Bangkok.
Under the two subcontracts awarded by HHI, Hallin Marine will provide all the
construction diving services from three pipelay barges as well as conducting
Saturation Diving and Hot Tapping of connections into the pipeline from the
Diving Support Vessel.

John Giddens, Chief Executive of Hallin Marine, said:

'We are extremely pleased to have been awarded this work. The Diving Support
Vessel side involves Hot Tapping and Saturation Diving services and is in
addition to the onboard barge construction diving services that we are already
contracted to supply to HHI for the PTT 3rd Pipeline Project. The winning of
these orders confirms that Hallin Marine is able to provide HHI with the
increasingly complex services they require, at competitive prices.'

What a truly fantastic announcement from a 20 million market cap company.

'Hallin Marine, the AIM quoted provider of subsea solutions to the oil and gas
industry, has signed an agreement with a substantial US based offshore
contractor for work in the Gulf of Mexico. The US$16.4 million contract is for
an initial 12 month period with an option for a further year valued at US $13.9
and is the largest contract ever won by the company.

Under the terms of the contract Hallin will supply technical support as well as
Dynamically Positioned (DP) vessel and sub-sea intervention equipment,
consisting of a 200 metre-rated Saturation Diving System and Air Spread Diving
System. The equipment will be operated from the vessel 'Toisa Voyager' which
Hallin has chartered from Sealion Shipping for the duration of the contract.
This sophisticated DP vessel is currently being completed at Wu Hu Yard in China
and will be taken on charter by Hallin Marine in Singapore in May 2006 prior to
mobilisation to the Gulf of Mexico.

The contract is to support the US company's construction work in the Gulf of
Mexico region. The vessel and equipment will be managed and mobilised from
Singapore in June 2006 and work is expected to commence in July 2006. Hallin has
traditionally been strong in the South East Asia, India and China and this
contract is Hallin's first in the Gulf of Mexico.

hi
Got into this today based on their rns of this AM. Seems a good company with potential for multi todays gains.
Well done hawick if u have been building a stake since creating this thread in August.
good luck to all

Hi Scottie, belated welcome, wish it was even bigger - results were excellent and now a substantial placing at 77p, "due to unprecedented demand" for its business. Not a fan of placings as a rule, but this is for all the right reasons imho:

(Also GHE hold a large stake in HMS and are trading at lest 300p below nav, greedy pig, i have some of them too!).

HALLIN MARINE SUBSEA INTERNATIONAL PLC
('the Company' or 'Hallin')


Proposed Placing of 9,000,000 New Ordinary Shares at 77p per share

The board of Hallin believes the company is well positioned to exploit the
opportunities presented by the high level of demand for its services both now
and in the future.
The board has witnessed a virtually unprecedented level of activity in offshore
oil and gas construction fuelled by the continuing strong oil price. This has
resulted in a corresponding level of demand for the services and equipment
offered by the Company and its operating subsidiaries ('the Group').

Unconnected but in addition to this the increase in demand for support equipment
for contracts in the Gulf of Mexico, following Hurricane Katrina, is expected to
make the business outlook extremely strong for those companies with available
equipment and trained personnel.

The board believe the global offshore oil and gas industry will continue to have
a high demand for the Group's services for the foreseeable future.

Accordingly, the board consider that the Group should position itself as far as
possible to take maximum advantage of the opportunities that are currently
available to it by increasing its investment in operational assets. It is quite
clear that this cannot be done solely by the Group's own cash generation and
that in order successfully to grow the business significant external funding is
required.

In conjunction with its advisers the Board has considered the available options
and has concluded that this funding can best be achieved by way of a Placing of
new Ordinary Shares ('New Ordinary Shares') with a small number of institutional
investors. Accordingly, the Board is now proposing a placing of 9,000,000 New
Ordinary Shares at a Placing price of 77p per share to raise 6,930,000 million
before expenses (6,600,000 net of expenses including placing commission). The
New Ordinary Shares have conditionally been placed on behalf of the Company by
the Company's Stockbroker, J.M. Finn & Co. The net proceeds thus raised will be
utilised for further investment in additional plant and equipment for the
Group's business.

In order for the Placing to proceed it is necessary to increase the Company's
authorised share capital and to grant the requisite authority to the Directors
to issue the New Ordinary Shares. A circular containing further information on
the Placing and seeking shareholders' approval to the increase in share capital
and the granting of the necessary authority to the Directors to issue shares was
posted to shareholders yesterday. The circular also contains a notice of an
Extraordinary General Meeting of the Company to be held at JM Finn, Salisbury
House, London Wall, London, EC2M 5TA on Wednesday 26th April 2006 at 11.30 a.m.
The notice of EGM contains Resolutions to give effect to these proposals and the
Placing is conditional inter alia on the passing of these Resolutions.



The Directors consider that the Placing is in the best interests of the Company
and its shareholders. Accordingly, they are recommending shareholders to vote in
favour of the Resolutions to be proposed at the EGM, as they intend to do in
respect of their own shareholdings amounting in aggregate to 8,595,000 Ordinary
Shares (representing approximately 28.3 per cent. of the existing issued share
capital of the Company).

Added a few today, suffering a severe funds shortage or it would have been more. i intend to accumulate as long as they stay around these prices. Remember they said recently:

'The board has witnessed a virtually unprecedented level of activity in offshore
oil and gas construction fuelled by the continuing strong oil price. This has
resulted in a corresponding level of demand for the services and equipment
offered by the Company and its operating subsidiaries ('the Group').

Unconnected but in addition to this the increase in demand for support equipment
for contracts in the Gulf of Mexico, following Hurricane Katrina, is expected to
make the business outlook extremely strong for those companies with available
equipment and trained personnel.'

A re-rating looks overdue to me as they have missed out on the frenzy amongst the trendier producers and explorers.

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thanks for your time

Added again today, up to my quota for now!

One of the real beauties of this is that with oil at $75, orders should pour in and these orders tend to run for at 18 months to two years, as companies rush to repair pipelines or look to release previously uneconomic resources.
So if there ever was a downturn for the likes of HMS you can see it coming a long way away a in a sharply falling oil price and have years to unwind your position! Oil was $55 when HMS floated and business was good then, so I reckon with oil at $75, HMS has at least three years from here of clear water.
'When there is a goldrush, the wise man invests in the man who makes the shovels!'

Been tracking this since float, off and on. Now looks a very interesting time to take advantage of the recent pull back in the share price. However, a couple of questions for you more knowledgeable folks out there:-

Question 1) In the accounts to 31st December the FD's report mentions buying 6.5m assets for ROV based out of Aberdeen via bank loans. The current proposed share placing will raise 6.6m net. Are these 2 amounts the same money, or will the fund-raising be used for purposes additional to the ROV/bank finance expansion? I've emailed the company for the answer.

Question 2) What is your guess on turnover for next year? We already have $21m in the bag (assuming the recent sale of @5m and the order for 12 months maintenance are all booked by 31st Dec 2006).

Assuming the amounts in Q1 above are the same, then interest charges next year should be effectively nil and ROCE and Operating Margin will look good on turnover of about $35m (pure guess of, say, 33% increase over 2005) at 20% gross margin less 50% of gross profit on overheads makes $3.5m net profit before tax. This is a 10% OM (quite satisfactory) and (with the new capital raised of 6.6m added to existing) a ROCE (average capital between current value and this year's after the fund-raising) of nearly 22% with a PE of about 18 (allowing a 10% tax rate) BUT an EPS of pretty much the same as last year of 7.87c because of the increased share capital in issue and thus a PEG of infinite - very unattractive.

Conversely, to get the PEG down to a respectable 0.66 (for a high growth share) EPS need to rise by about 22% (7.87c + 22% = 9.60c EPS, gives PE of 14.6 and PEG of 0.66). To get EPS to rise 22% on shares in issue increased by 29%, net profits after tax must increase by 57.38%. With tax rate and gross margin as above and overheads restricted to, say, $3.5m (anyone think this too high?), this needs a turnover for 2006 of $38.8m - an increase of 46% on 2005. Operating margin would be 11% and ROCE would be 26%.

So, to rephrase Question 2) above, do you think we can achieve almost 50% increase in turnover and nearly 60% increase in after tax profits this year to justify the current price, let alone justify an increase in the SP?

Question 3) Does anyone know of any existing or pending broker's report on this company?

Question 4) Should I buy a) before the AGM, assuming all special/extraordinary items will be approved, or b) should I wait until afterwards, or c) should I wait until the new shares are issued for any dilutive effect to reduce the price?

All answers (and corrections to the arithmetic!) welcome.

sd

Wow! Numbers make your world go round eh! Seriously though, thanks for your efforts.
I do look at what I consider to be the key numbers, but don't go into the same depth as you do! I don't know with Q1, I would guess that they will use some of it to reduce repayments but some of it for expansion. That's how I would read the announcement.
I think profits will be up, but the recent sale will reduce (this year only) the speed of rise. Fwiw, Shares Rag said:
".......Going forward, the profit from the SAT unit sale skews 2006
forecasts a bit but, if we strip that deal out, it implies revenues of
$34 million (19.8 million) this year, rising to roughly $45 million
(26 million) in 2007. Even after assuming rising tax and interest
charges going forward, were still looking at underlying EPS of 5.6p
and 6.7p. Given that the oil services sub-sector trades on an
average PE of 22, a forward PE of 18 for Hallin by the end of this
year would imply a 120p share price, about 45% up from here.''

Edison research (I know nowt about them) came out with a buy rec as did growth Company Investor recently. Don't know of any other reports.

I do think these are a cracking buy and hold though, with substantial contracts up to two years ahead already booked.

Hawick - thanks for the response - will read the reports you mention. I take the Shares article to mean 2006 should be revenues of $34m + $5m SAT unit sale? Not sure how they get EPS of 5.6 = 9.9c - will review my figures (just for fun, you know!)

sd

Always wonder how the weekly rags get their figures! Two crass errors incidentally in the Shares Mag article:
1) They are not IOM based (Singapore if I remember)
2) They haven't expanded from the North Sea to other parts of the world - should be the other way round, they have just opened their Aberdeen division to take advantage of North Sea opportunities.
Have 'fun'! -:)

Hawick - the plc is incorporated in IoM, albeit their main area of operation has been Singapore, also M. East (?) and now Aberdeen.

Touchez! thanks SD.

Below is reply from PR firm re my Question1) in post 25 re use of new placing 6.6m

"Some of the funds may be used to cover the purchase of the ROV's but the real intention was to use these new funds to purchase further equipment in addition to teh new ROV's."

This alters the gearing quite significantly from 13% to 48% - still not too bad. But it does show they plan to expand even faster. Hope they have the mangement and logistics in place to do so.

Also sent me JMFinns note re prelims which I look forward to studying to see what they are projecting.

Still watching and waiting - got distracted by DEBT on the way.

sd

Not surprised you got distracted! Thanks for info I do feel management hasn't put a foot wrong so far so hopefully that can continue. Resolutions ok'd as expected.
'The EGM Resolutions were passed and it is expected that the new
shares will be admitted to AIM on Thursday 27th April 2006. The placing will
raise 6,930,000 before expenses which will be used for further investment in
additional plant and equipment for the Group's business.'

For sure this adds to their borrowings, and risks but is a logical and major advance, taking Hallin a very significant step nearer the big league.

Hallin Marine, the AIM quoted provider of subsea solutions to the oil and gas
industry, has signed a contract for the construction of a 78 metre DP2 Subsea
Operations vessel.

The order confirms Hallin's stated intention to own its own operating vessel and
is seen by the board as a logical step in growing the company's operating
margins and ensuring continuity of vessel supply.

The build contract has been awarded to Singapore based Pan-United Marine Limited
('PUM') for up to US$ 22.6M, depending upon the final options agreed.

In addition a further US$3M will be invested in a state of the art SAT system
incorporating an advanced self propelled hyperbaric rescue chamber for exclusive
use with the vessel and a suitably sized crane will also be added.

The vessel, to be named SOV Ullswater, will be built to Hallin's own design and
specification and is scheduled to be delivered to Hallin in the final quarter of
2008.

Hallin presently operates marine vessels and currently has the Toisa Voyager and
the Sanko Angel under long-term charters.

The cost will be 80% financed through debt with the remainder from the company's
cash reserves. Last month Hallin completed a placing which raised 6.9 million;
the funds will be primarily used to invest in additional plant and equipment to
take advantage of the continued high demand for the Group's services.

John Giddens, Chief Executive of Hallin Marine, said:

'The purchase of our own vessel, specifically designed for subsea operations,
is a transforming event for Hallin. It will enable us to significantly increase
our profit margins on a significant number of the contracts we carry out each
year. It will also give us greater flexibility and the ability to offer clients
a more complete product.

'We have worked closely with Pan-United in the run up to the award of this
contract to develop the vessel that we need at the right price. Pan-United have
a sound reputation for quality and delivery on time and we will continue to work
closely with Pan-United during the build of SOV Ullswater.'

Despite yesterday's market HMS ticked up and now the chart is looking to break to new highs, which could presage another run up.

Looking cheap having participated enthusiastically in the recent pullback!!

Confess to picking up a few more myself yesterday.

Nice news yesterday:

Hallin Marine, the AIM quoted provider of subsea solutions to the oil and gas
industry, announces its success in winning two new contracts with a combined
value of a minimum of US$4.3 million.


Hallin Marine has been awarded a one month contract valued at US$2.5 million for
diving support of a subsea pipeline installation off Thailand for local energy
major PTT and a US$1.8 underwater repair and maintenance contract by Premier Oil
for its gas field off Indonesia.


The main contractor for the Thailand project, Hyundai Heavy Industries (HHI),
awarded the contract to Hallin, which has taken the Diving Support Vessel,
Gulmar Condor, on hire under a standard charter agreement to utilise it as a
platform for Hallin Marines' Saturation Diving System and Remote Operated
Vehicle ('ROV').


The contract may be extended for up to a further two months by HHI.


The second contract Hallin has secured is an Underwater Repair and Maintenance
contract for Premier Oil's Anoa Field in the Natuna Sea.


PT Hallin Marine Indonesia, Hallin's recently established wholly-owned
subsidiary, secured the base contract that is valued at US$1.8 million for the
supply and operation of a DP1 Vessel, a Workclass ROV, together with
intervention services with offshore works, and will start within the next few
weeks.


John Giddens, Chief Executive of Hallin Marine, said:


'We are delighted with these major contract awards. These are excellent project
wins in themselves and both will produce real progress, in different ways, for
our company. The charter of the Gulmar Condor will strengthen our capability and
the second contract win for our newly established office in Jakarta, Indonesian
is a great step forward.


'The HHI contract continues to build on our strong relationship with Hyundai.
The Gulmar Condor, which we are taking on charter for the Hyundai work off of
Thailand, is an excellent diving support vessel ideally suited to our
requirements.


'The Premier Oil contract is another success for our new Indonesian subsidiary.
The works are to be carried out in Premier's Anoa Field which are Gas producing
facilities offshore in the Natuna Sea supplying Singapore via the West Natuna
Transport System Pipeline.


'Premier Oil is a highly respected oil operator and we are pleased to secure our
second subsea contract with Premier and look forward to working with them once
again.'

Another small but of course welcome contract this morning.:
$1.1 million
Hallin Marine, the AIM quoted provider of subsea solutions to the oil and gas
industry, announces the Contract Award for the provision of a Subsea
construction contract for Talisman Energy at the Bunga Raya Field, offshore
Malaysia.

At short notice Hallin has mobilised the DP1 vessel 'The Mariner', operated by
Sealion and Survey and positioning equipment, Air Diving System, Workclass ROV
and specialist subsea personnel and operators to provide support of installation
of additional offshore platform piles. This activity is part of the Water
Injection Development of the Talisman offshore installation with works expected
to be completed by end of July 2006.

John Giddens, Chief Executive of Hallin Marine, said:
'We are pleased to win our first contract with Talisman Energy in Malaysia. The
speed that we have mobilized this complex package demonstrates our
professionalism and expertise as a marine and subsea contractor.

Interesting re-the BP problems in Alaska which requires massive pipeline repair after a whistle-blower threatened to expose how long BP have been (according to him) camouflaging the problem.

Nice idea for a cracking ramp would be to speculate that HMS would get a bumper contract.
...................But they don't operate in Alaska (though once they get their own rapid response vessel it might well enable such contracts)..............

Drat........................

But interesting to see if other companies decide to come clean and get a few repairs done in areas HMS do operate in...............