Bid target Kentz says it will win more global contracts
Wednesday 28 August 2013
Kentz, the engineering support specialist, has promised its shareholders it will win more lucrative contracts worldwide in the oil and resources sector.
The company has rejected a £680m indicative offer from Amec and a lower approach from Germany's M&W, both of whom have until 16 September to come up with firm bids.
Chris Brown, the chief executive, said: "We have had no other approaches and we have made clear that the two we did receive undervalue the business. There are no other offers in the house at the moment but if one were to come, we would evaluate it on the same basis."
Amec offered between 565p and 580p a share for Kentz, and the shares were down 2p to 565p yesterday.
Mr Brown said that while the Takeover Code prevented him from talking specifically about growth prospects or anything verging on a profit forecast, he was "excited" about the future.
He said: "Our current prospects, or work we have specifically bid for, is up 48 per cent at $6bn [£3.8bn]. And contrary to some people's view of the hydrocarbons sector, we are still winning business even in Australia, which is supposedly all over. We have an agile, decentralised model working in 30 countries and opportunities, whatever stage a project is at."
The company usually expects to win about a third of the contracts it bids for. It has raised the interim dividend by 20 per cent to 6.6 cents, and Mr Brown said that if it did not spend its $219m cash balance on acquisitions, it would look at returning some of that to shareholders, "probably early next year".
First-half revenues rose by 2 per cent to $775m, with pre-tax profits up 3 per cent at $53m. Headline profits before tax rose by 8 per cent to $55m while earnings per share were up 23 per cent to 33.25 cents.
Mr Brown dismissed reports there has been a falling out between himself and his chairman, the Malaysian businessman Tan Sri Razali.
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