General sentiment towards the oil services sector soured as the price of crude fell-away in the second half of 2014, but Enteq Upstream (NTQ) has revealed a creditable operating performance at the half-year mark. The company, which supplies directional drilling technology to the oil and gas industry, reported strong revenue growth, while its interim operating loss narrowed by 9 per cent to $2.27 (£1.43m). However, Enteq turned in adjusted cash profits of around $1m - a 120 per cent increase on 2013.
The company continues to successfully integrate its in-house technology into its product range, including the commercialisation of a data transmission system (pulser), together with new software applications. But the focus remains on the company's drive to reduce its exposure to North American land drilling and expand its footprint in industry growth markets.
To this end, Enteq has appointed Shenkai as its new distributor for its integrated MWD (Measurement while Drilling) product range in Shanghai. Shenkai specialises in oilfield products, such as mudlogging units and well control equipment, so it’s an ideal conduit for Enteq’s proprietary technology in China. Aside from the progress being made in the People's Republic, Enteq also made its first significant system shipments to the Middle East during the period.
Investec expects underlying pre-tax profits of $2.6m for the current financial year and EPS of 4.2c (from $1.4m/2.2¢ in 2014).
| ENTEQ UPSTREAM (NTQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25p | MARKET VALUE: | £15m | |
| TOUCH: | 24p-26p | 12-MONTH HIGH: | 63p | LOW: 23p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 125¢* | NET CASH: | $13.8m | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 10.6 | -2.5 | -4.2 | nil |
| 2014 | 13.6 | -2.2 | -3.7 | nil |
| % change | +29 | - | - | - |
Ex-div:- Payment:- £1 = $1.59. *Includes intangible assets of $42m, or 71¢ a share | ||||
