Kentz 'delivers on all promises' as revenue and profit climb 50pc
Kentz, the Clonmel-headquartered global engineering services group, has delivered a bumper set of full-year results for 2010, with pre-tax profit rising 52pc to $67.2m (€47.7m) as revenue climbed 50pc to almost $1.06bn (€752m).
Releasing the figures yesterday, Kentz chief executive Hugh O'Donnell told the Irish Independent that management had "delivered on all of our promises" to investors, and added that a robust order book -- totalling $1.63bn at the end of January -- underpinned the group's positive outlook.
Kentz is majority-owned by Malaysia's Peremba group and employs almost 12,000 people. It delivers construction and engineering services to the oil, chemical and petrochemical sectors, which last year accounted for 74.3pc of its revenue. Other clients include those in the mining and power industries.
Its customers include blue-chip firms such as ExxonMobil, Chevron and Shell. It currently operates in 27 countries and almost 42pc of the company's revenue was generated in the Middle East last year, while Australasia should account for 25pc of group revenue this year.
Mr O'Donnell said that activities at Kentz had so far not been materially affected by civil unrest in the Middle East or north Africa. However, he added that last week between 150 and 170 staff in Yemen, including Kentz employees and those at a partner firm, were temporarily repatriated to other locations due to instability in the country.
Basic earnings per share rose nearly 54pc to 40.66 cent at Kentz last year, while the company also proposed a final dividend of 7 US cents per share. That brings its total dividend payment for 2010 to 10 cents per share, up 67pc year-on-year.
Chief financial officer Ed Power told the Irish Independent that when Kentz floated on London's Alternative Investment Market in 2008, it had planned to pay out between 20pc and 25pc of profits in dividends "on a progressive basis".
He said that while the dividend payment for 2010 reflected the "top end" of that scenario, it was based on the strong performance for the year.
Kentz had cash of $231.3m on its books at the end of 2010, 28.3pc more than at the end of 2009. The company reckons it could comfortably divert about $50m to acquisitions, but Mr O'Donnell declined to be drawn on whether a further acquisition was likely this year.
Last month Kentz paid about €7.4m to buy a South African engineering services firm. It was Kentz's first acquisition since the group's debut on the stock market.
Asked if Kentz was increasingly likely to be a takeover target itself, Mr Power said the group wasn't focusing on the possibility. "If someone wants to come and talk to Kentz then that's their prerogative."
Broker Brewer Dolphin yesterday raised Kentz shares to a 'buy' from 'add' with a £4.60 price target. The stock closed in London at 385p, up 7p.