MedservRegis plc - Updated Financial Analysis Summary
On 18 May 2016, Medserv plc published an updated Financial Analysis Summary (FAS) providing an overview of the 2015 results, a comparison of the 2015 actual results with the forecasts published in the previous FAS, as well as the forecasts for the current financial year ending 31 December 2016.
These are the main highlights of the current year forecasts of Medserv plc:
2016 Forecast
- Revenue is expected to grow by 4.2% to €43.96 million largely reflecting continued heightened activity at the Malta base, a significant drop in the contribution from the Cypriot base as well as the inclusion of the METS Group revenue from 24 February 2016 totalling €16.3 million.
- The Malta base is expected to continue offering support services in the Bahr Essalam (Libya) exploratory and production project. Additionally, the Malta base will be providing support services in connection with the replacement of a vessel offshore Libya later on this year as well as support services related to exploratory drilling offshore Libya between July 2016 and June 2017.
- Revenue from Cyprus is expected to drop materially during 2016 in view of uncertainties and delays being experienced by its client. Nonetheless, Medserv will be seeking to extend its operational licence in Cyprus as its client intends to resume exploratory operations at some point in the near future. In the meantime, Medserv has been invited to participate in a tender for another client.
- On 24 February 2016, Medserv concluded the acquisition of METS which will now be consolidated with the Group’s results. The acquired business is expected to generate €16.3 million in revenue (based on known and secured business) which will offset the sharp decline in income from Cyprus. Out of the three businesses of the METS Group, the base in Oman is expected to remain the largest contributor. Meanwhile, the bases in UAE and Iraq have experienced a slowdown in the first quarter of this year but are expected to rebound during the second quarter.
- The forecasts also include the support services to be provided from a pop-up base in Portugal which is expected to generate €3.8 million in revenue as works are expected to commence shortly and be concluded by the end of the year.
- As a result, the Group’s EBITDA is expected to grow by 12.9% to €11.5 million. However, after accounting for an increased depreciation charge (due to additional depreciation of METS) and finance costs (following the Group’s latest bond issue to finance the acquisition of METS), the Group’s pre-tax profit is expected to decline by 26% to €4.45 million. On the other hand, the Group is expected to benefit from a tax credit which will lead to a largely unchanged net profit figure from continued operations of €4.63 million.