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.

Shares magazine Play of the week yesterday.

Cheers Frampton, wondered why there was a bit more action over the last few days. Interesting one to watch I think, what was the foundation to Shares magazines recommendation if its not too long and you have the time.

J.

Investors Chronicle printed the article below on the 2nd July.

Hamworthy ready to grow via expansion
Aim-hopeful Hamworthy already has an impressive portfolio of fluids technology, as well as a solid client base, underpinning its 98m-strong order book. And now it expects to grow both organically and via acquisition as it takes advantage of a fragmented marketplace.

A sizeable business, Hamworthy has a long and successful trading history. Founded in 1911, the group provides marine and offshore fluid-handling systems focused on gas handling, pumping and waste-water management.

While there are no plans to raise any new money, Japanese private equity house Nikko - which currently owns Hamworthy - is selling 75 per cent of the group to institutions, for around 30m. When trading begins, Hamworthy is expected to be valued at around 40m.

The company will continue to benefit from increased safety and environmental legislation, which will help it build on last year's profits of 5.8m and sales of 92.9m. Trading is expected to start later this month, and Collins Stewart is broker to the issue.


Hamworthy is a well-established company, which has a strong board, including Gordon Page, who is currently the non-executive chairman of Cobham. It is a refreshing change to have a company with a strong trading history joining the junior market. Meanwhile, its niche offering in a growing marketplace makes it an attractive proposition.



Some more info can be found on the Hamworthy website:-

http://www.hamworthy.com/investor/presentations.asp

Shares summary: "A world beater in liquid natural gas pumps and equipment that was sold too cheap. It could be too good to be true but these shares need no hamming up to be exciting in the hard-to-enter conservative marketplace of gas and oil shipping.
Historic PE March 2004: 9
Prospective PE March 05: 7.5
Prospective PE March 06: 6
With a following wind these shares should double over the next year or so."

This looks interesting but I haven't got any available funds at the moment.

Thanks for the info, I intend to do some more research over the weekend but this looks a good investment at the moment. Most of my money is already tied up but I'm tempted to pull some cash out of one of my poorer performers and go with HMY! It looks to be a good share to hold long or short.

I agree, but knowing my luck I'll take cash from a share just before it does a big rise!

lol, I know that feeling!!

Just bought a small amount having sold EPO - a gamble that went wrong, this looks a much safer bet, I won't be losing any sleep over it.

I bought a few this morning also, will see how things go and hope for an upward run to the end of the year. Will probably go quiet over the next few days until there is another news release or coverage in the papers. Fingers crossed.

With all the buys going through this morning the offer price should tick up soon.

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.