Reviewing the performance of LSE listed Petrofac Ltd and NMC Health Plc

Reviewing the performance of LSE listed Petrofac Ltd and NMC Health Plc

Petrofac Ltd

Petrofac Ltd (LON: PFC) is Jersey, United Kingdom-headquartered provider of services to the oil and gas production and processing industry, which assists companies in transforming the value of their assets across the oil and gas life cycle. The company engages in designing and building oil and gas infrastructure, along with operating maintaining and managing oil and gas facilities, which includes training of personnel. The company was admitted to the Official List of the London Stock Exchange in 2005 and started its business in 1981 as a producer of modular plant in Tyler, Texas, USA. The group has grown to establish a robust global business with around 11,500 employees, which seeks to help its clients unlock the full value of their energy assets by responding to the different needs of each client. Leading integrated, independent and national oil and gas companies of the world are a part of the diverse client portfolio of the group, which focuses on building on its track record in core markets to win new businesses and strengthen its position. The group seeks to ensure effective risk management, cost control and project execution through a range of flexible and innovative commercial models, which are tailored to the needs of each client. For detailed design of both onshore and offshore facilities, the company offers a full suite of engineering services including front-end engineering and design (FEED) and conceptual and feasibility studies, which help in driving continuous improvement and maintain its competitive edge.

The shares of the company have their listing on the main market segment of the London Stock Exchange. There they trade with the ticker name AZN. The shares of the company also form part of the FTSE 250 index.

Trading Update

The company on 17 December 2019 came out with an update on the performance of the company prior to the full year results release of the company for period ending on 31 December 2019 on 25 February 2020.

  • As per the update release of the company, it expects its trading for the year to be in line with the guidance.
  • The new order intake of the company in the year to date was US$3.0 billion.
  • Net debt of the company as on 31 December 2019 is expected to be around US$0.1 billion

 

Stock Performance at the London Stock Exchange

Source – Thomson Reuters

At the time of writing of this report on 20 December 2019 the shares of the company were trading on the London Stock Exchange for GBX 382.80.

The shares of the company during the past 52 weeks of trading at the London Stock Exchange have registered a 52-week high of GBX 562.00 while also registering a 52-week low of GBX 367.60. The company has a market capitalisation of £1.33 billion on the London Stock Exchange at the time of writing this report on 20 December 2019.

The average stock’s traded volume as on the above date and time stood at 555,168 and the stock's average traded volume for 5 days was 2,252,523.00 ; 30 days- 1,118,846.50 and 90 days – 1,187,613.76 and the beta of the stock of the company on the date was 0.56, which compared to the benchmark index reflected a lower volatility and the stocks trading volumes on the London Stock Exchange on an average for 5 days was up by   +101.33 % as compared to the 30 days’ average traded volume and in last one month, the shares have generated a return of -3.08% and also a return of -19.62 % return on year to date basis.

Outlook

The company expects to report a revenue of US$5.5 billion for the full year, in this Engineering & Construction (E&C) division is expected to contribute around US$4.4 billion, Engineering & Production Services (EPS) is expected to contribute around US$0.9 billion and the balance to be contributed by the Integrated Energy Services (IES) division.

The company however is expecting a lower overall revenue in 2020 on account of a decrease in order intakes and new contracts being taken in at lower margins.

NMC Health Plc

NMC Health PLC (LON: NMC) is a United Arab Emirates (UAE) domiciled diversified health care company, which operates numerous healthcare facilities in the middle eastern country with the company domiciled in Abu Dhabi with the company is involved in business ranging from trading, information technology in addition to health care services, the company is also among the top ranked amongst the largest fertility service providers in the world and the largest private healthcare group in the UAE. The shares of the company have their listing on the main market segment of the London Stock Exchange. There they trade with the ticker name NMC. The shares of the company also form part of the FTSE 100 index. The company is the first from Abu Dhabi to list on the London Stock Exchange

Trading Update

The company on 18 December 2019 came out with a response on the allegations being made by research firm Muddy Waters LLC regarding reported values of the company’s asset values, cash balance, reported profits and debt levels. The research firm had not only alleged that the valued of the above have been incorrectly stated but also alleged that company had overpaid on a number of its acquisitions, artificially inflated margins and had a poor corporate governance on account of being controlled by a small group of UAE based billionaires.

The clarification given by the company in its response stated that its has been prudent in making all necessary regulatory disclosures and has been transparent enough with all the regulations of the London Stock exchange. It stated there is nothing much that the company has with itself that it can add at this point and further stated that the allegations made by Muddy Waters LLC appear principally unfounded, baseless and misleading  and contain many errors of fact, and that the company in due course will respond in detail on the allegations.

Stock Performance at the London Stock Exchange

Source – Thomson Reuters

At the time of writing of this report on 20 December 2019 the shares of the company were trading on the London Stock Exchange for GBX 1264.00.00.

The shares of the company during the past 52 weeks of trading at the London Stock Exchange have registered a 52-week high of GBX 3,059.00 while also registering a 52-week low of GBX 1,192.00. The company has a market capitalisation of £3.20 billion on the London Stock Exchange at the time of writing this report on 20 December 2019.

The average stock’s traded volume as on the above date and time stood at 3,711,837 and the stock's average traded volume for 5 days was 3,433,118.40 ; 30 days- 1,117,249.30 and 90 days – 805,538.19 and the beta of the stock of the company on the date was 0.66, which compared to the benchmark index reflected a lower volatility and the stocks trading volumes on the London Stock Exchange on an average for 5 days was up by +207.28 % as compared to the 30 days’ average traded volume and in last one month, the shares have generated a return of -40.77% and also a return of -43.84 % return on year to date basis.

Outlook

Muddy waters LLC has a long history of unearthing shady transactions and corporate wrongdoings. The company had previously attacked AIM listed Burford Capital with similar allegations which had wiped out nearly 40 per cent of its market capitalisation.

NMC’s shares are some of the most heavily shorted shares on the London Stock Exchange and all the analysts that cover this stock have given a buy recommendation on this stock.

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