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.

Same here.

cheers GF.

News from tradewinds paper this morning. "Qatar reveals tender winners" the article is too big for me to copy out and I cant seem to get into the website this morning so below is a brief rundown

"Qatar's LNG producers have named the winners of its latest massive tender. A consortium of key japanese owners and Teekay shipping have scooped 12 giant LNG carrier newbuildings worth a theoretical $2.76 billion following the latest tender from Qatar's LNG producers..."

Well informed sources say the grouping of Mitsui OSK lines, K line, NYK, lino Kaiun plus trader Mitsui has won long-term contracts to back eight of the Q-flex, or 215,000 cbm, LNG carrier newbuildings.

Teekay has been awarded four similar ships.

Leading LNG carrier builder daewoo shipbuilding looks set to build five of the Qatar ships, Samsung four and Hyundai three. There are options to upgrade any of the vessels to the larger Q-max size of around 250,000 cbm.

Expected delivery 2008

Qsat is due to launch its next tender later this year for eight large LNG ships.

Three more tenders for a further 26 LNG carriers are to follow."

I think this sets up some great news for HMY with their results next week.

I hope so Paul. Would there be a chance of HMY being a nominated supplier or does it not work that way.

MS

I have just re-read what i posted...its meant to be a further 36 LNG carriers not 26.
Mickey...The first rung on the ladder is to at least get the owners nominated who are going to buy and run the ships, and get the charter details agreed...once that is done (which it has just been) Qatar matches the owners with one of the yards they have reserved Slots at, and the theoretical order becomes a firm order. It is at this point that all the secondary contractors ie HMY recieve their orders. There is a very strong possibilty that HMY will have won the contracts for the re-liquefaction plants on these ships and I would expect some news on this shortly.

Thanks for that Paul. It keeps me up to speed.

MS

Paul
Does Hamworthy have a lot of competition for the work or are there just a small number of players in this field and all can expect to gain some orders?
Leslie

There are very few players in this market, and IMO they are one of, if not the leader! This is from their website

"With more than 60 years of experience in design and manufacturing of refrigeration systems we are one of the pioneers in building LPG carriers and subsequently LNG carriers. Our experience is second to none for LNG applications and we often have had to development new technologies to meet new global market requirements, an example being our state-of-the-art Moss inert gas generators and nitrogen generation systems
Hamworthy plc holds a worldwide license for the sale and fabrication of the Moss RS LNG Reliquefaction system."

There are a few companies who are into the handling of LPG which can be handled at higher (-45C) and therefore easier temperatures. LNG however at about -162C is a different proposition and it is here that HMY with the MOSS LNG Reliquifaction system have a clear lead. It saves an enormous amount of money each year on running costs for the ships which is why all the tenders are now for diesel ships rather than steam turbines as in the past.

Looks like we are off to a flyer this morning...

may have something to do with this:

http://moneyextra.uk-wire.com/cgi-bin/articles/200505310700068895M.html

More general news about LNG.

Liquid gold Qatar leads the way with huge export projects
Other Articles
Tuesday May 31 2005

THERE is Qatar and there is everyone else, is now a common statement in the LNG industry.

And no wonder. Qatar and its oil major partners are raising the industry benchmark with their huge projects to export gas to the UK and US, notably through the largest ships and liquefaction trains ever built.

Within the next three years, this tiny nation will become the worlds largest exporter of LNG, thanks to the series of RasGas and Qatargas projects. Not long after that, Qatar Gas Transport (Nakilat) will take over the mantle as the worlds leading LNG shipping company.

After Februarys announcement of a project with Shell, Qatargas 4, the emirate now has five LNG ventures in construction or under development.

The Shell project takes committed LNG capacity up to 77m tonnes a year by 2010/2011, of which no less than 57m tonnes will be built at Ras Laffan Industrial City during the next five years. By that time, a staggering $68bn will have been invested in Qatars LNG industry.

The foundation for this dynamic growth is Qatars North field, which is one of the worlds largest single non-associated gas fields, with recoverable reserves estimated at more than 900trn cu ft.

The North field represents 9% of the worlds proven gas reserves.

Although Qatar has several major projects in hand, it is Qatargas II which has become the template, both for its scale and innovation.

Qatargas II, a joint venture between Qatar Petroleum and ExxonMobil to ship LNG to the UK, has an impressive roll-call of firsts.

It is the first integrated LNG project taking in everything from the upstream field development and liquefaction through to shipping and import terminal ownership.

Qatargas II has also broken the mould in terms of LNG technology. It is building the worlds largest liquefaction trains, each with a capacity of 7.8m tonnes a year, and the first LNG carriers in excess of 200,000 cu m.

The economies of scale gained have enabled Qatar to conquer remote markets, such as the US.

In terms of financing, Qatargas II has also marked a turning point, setting new benchmarks for size, pricing, terms and structure.

A record $7.6bn in energy project financing has been raised by the project, with unprecedented operational flexibility and expansion terms.

The funds were raised from 57 institutions in the first-ever financing on a full LNG chain-integrated basis.

Qatargas II also marks the entry of Qatar into every part of the LNG value chain. Qatar not only holds a majority stake in the LNG joint venture, but will also part-own the fleet of ships and the largest interest in the import terminal.

And what a fleet of ships Qatar will have under its control.

Earlier this year, Qatars Minister for Energy Abdullah bin Hamad al-Attiyah said the intention was to order 70 ships, the majority with a capacity of more than 200,000 cu m, by 2010.

The total cost will be more than $15bn within a five- to six-year time frame and all the ships will come from South Korea, where Qatar has already reserved building slots.

Nakilats strategy is to form joint ventures with established shipping companies which acquire the building slots and then time-charter vessels on a 25-year basis to the LNG project.

Qatar acquired the block of building slots to prevent ten or 12 shipowners all trying to chase the same shipbuilders and to keep control of the technology with the yards.

In every time charter agreement, the Qatari interests have the right, but not the obligation, to own a minimum of 30%.

Qatar is clearly at the forefront of technological change, which always carries some risks.

However, Hassoum Kharbotli, of Qatar Petroleums project finance division, says that Qatars LNG projects have always been on time and always on spec.

With so much excitement in Qatars LNG industry, it now seems hard to believe that in 1971, when the North field was discovered, gas was held in such low regard that the nations government was said to be disappointed the field did not contain oil.

From tradewinds website today. Same details as articles posted on moneyam, but good to see the industry press covering HMY too.


"Hamworthy heads upwards

UK gas systems manufacturer Hamworthy has increased annual profit as orders rolled in for LNG reliquefaction kits.

It posted net earnings of 5.38m ($9.78m) in the year to 31 March, compared to 3.02m in the previous 12 months.

Revenues climbed to 113.89m from 90.6m.

Gordon Page, the companys chairman, said: Strong order intake has continued in most business sectors except for offshore which has experienced delays to a number of projects. We look forward to a year of continued growth.

Gas reliquefaction systems for ships were the biggest contributor to both sales and profit growth.

Total order intake was up at 152.9m, from 125.6m in the previous year.

Hamworthy installs its systems on LNG and LPG carriers, tankers, cruiseships and floating production ships.

Its gas systems, including LNG reliquefaction, produced turnover of 44.8m, up from 28m the year before.

Operating profit rose to 2.5m from 0.1m.

It won orders for 12 LNG systems from Korean yards in the third and fourth quarters.

It added: The LPG reliquefaction business had a quieter though satisfactory year.

Looking ahead, the company said it was considering more company acquisitions to boost shareholder value."

A very good set of results - nice to see HMY performing well across all of its divisions. With all the news about LNG its easy to forget that HMY has a strong presence in other areas of marine activity, especially those such as overboard discharges, sanitation and venting of VOCs, where enviromental legislation is providing business.

Looking great for the future. Unless you're in the industry it's hard to take in the sheer size of the Qatar project. It looks and is massive, not that I've been there, too hot for me. Paul thanks once again for the info.

MS

Yes excelent results but no doubt we will have the post results sell off due to traders getting in before the results.

cheers GF.

You're right GF.

MS

Anyway CityWire like the results................

Everything shipshape at Hamworthy

Published: 15:22 Tuesday 31 May 2005
By: Cliff Feltham, Companies Correspondent

Britains shipbuilding industry has all but vanished but there are still useful profits to be made from supplying some of the essential systems used at sea.

Shares in Hamworthy (HMY) have more than doubled since last July's float on the back of growing demand for systems to handle fluids such as waste and liquefied gas at sea. Tankers, cruise ships and offshore oil and gas facilities all need its products.

Sales in the 12 months to end March increased by more than 25% to 113.9 million generating pre-tax profits of 6.4 million, a rise of 52%. The shares were steady at 229p valuing the firm at 85 million. They were floated at 109p. There is a final dividend of 3.2p.

Another good year seems to beckon with the order book standing at 121 million of which half the work is due to be delivered in the current year. The highlight of the year was winning orders worth 48 million from shipbuilders Daewoo, Hyundai and Samsung for liquid natural gas reliquefaction systems in the Far East.

The system allows gas which boils off during transportation to be recycled. The group is looking at other possible applications for its technology.

Back To Latest News Printable Version

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Inert gas systems saw sales climb sharply. They are supplied to both gas ships and tankers with both sectors enjoying strong conditions.

Pump systems suffered a slight fall in operating profits reflecting reduced business for spares and service work. But there are hopes the wastewater system division targeting the cruise ship sector will see a pick up with a number of new vessels entering service.

The business, based at Poole in Dorset, provides advanced environmentally friendly ways of dealing with waste products on ships. Cruise ship operators are facing tighter environmental regulations governing the discharge of waste at sea.

Up until now the group has focused on organic growth but chief executive Kelvyn Derrick is signalling 'selective' acquisitions.

Citywire Verdict:
Hamworthy has delivered a good, solid performance after its first year on the market. The company is a either a market leader or has a dominating presence in most of the areas it serves. Over 80% of its sales are related to the production and transportation of oil and gas by tankers and gas ships. Expect moves to reduce this reliance probably through acquisitions. The shares still look good value.

cheers GF.

citywire recommends again:
".... Another alternative energy source is liquid natural gas (LNG) which is a methane gas cooled to minus 260F. Since LNG is a natural gas, it burns clean and is environmentally friendly. At the moment LNG makes up only 6% of the worlds natural gas trade but is expected to grow on average 6.7% per year.

A stock that offers an indirect exposure to LNG is Hamworthy . This was mentioned as a trading idea on 10 February at 198p, the shares are now trading at a mid price of 235.5p, an increase of 18%. The company designs and makes LNG handling systems for tankers and has a healthy order book worth about 130 million. This stock is well worth keeping an eye on and should the shares slip below 230p it might be worth considering a top-up on existing long positions.ENDS.


Well worth going back to this view from Citwire, as the post results sell off as certainly been overdone.

cheers GF.

Overdone indeed. Quite amazing how this sort of sell off exposes the power of the BORSON brigade. There must be a lot of people paying high tax/commission percentages for this short-termism. And this with one of the safer bets around. At this bargain price I'd certainly top up if I had funds.

Cheers, Madison

Certainly getting buyers coming back into the market for these.

cheers GF.