BULL POINTS:
■ Deep water windfarm expertise
■ Current projects worth more than share price
■ Awards news expected shortly
■ Experienced operational management
BEAR POINTS:
■ Will need lots more cash
■ Still exiting oil interests
SeaEnergy is still better known as Ramco Energy, which had a chequered history as an oil and gas explorer. Now it hopes to be more successful in the renewable energy sector and has re-invented itself using its expertise in deepwater projects as a provider of services to the offshore wind industry.
The UK government has signalled that offshore wind will provide a significant chunk of the UK's renewable energy capacity in the years to come. So SeaEnergy has put together a team of wind energy experts who have advertised their skills by developing the Beatrice demonstrator wind farm in the North Sea. This involved installing the biggest turbines ever deployed offshore at depths of 45 metres.
SeaEnergy's partnership with a subsidiary of Scottish & Southern Energy, Airtricity, has the contract to expand Beatrice to a 920MW wind farm, equivalent to a small power station, and its partnership with NPower Renewables won a 905MW contract, also in the North Sea. Both contracts came through a round of awards to build windfarms off Scotland's coasts. Next up will be the so-called UK Round 3 awards where SeaEnergy, in partnership with Portugal's EDP Renewables, is competing for two of the nine different zones. The results should be announced before the end of 2009.
| ORD PRICE: | 43p | MARKET VALUE: | £29.3m | |
| TOUCH: | 42-44p | 12-MONTH HIGH/LOW: | 85p | 31p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 6p | NET CASH: | nil | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | nil | -5.4 | -15.6 | nil |
| 2007 | nil | 0.6 | 2.3 | nil |
| 2008 | nil | -3.3 | -8.0 | nil |
| 2009* | nil | -4.1 | -8.0 | nil |
| 2010* | nil | -3.8 | -10.0 | nil |
| % change | - | - | - | - |
Normal market size: 5,000 Market makers: 6 Beta: 0.7 *Edison Investment forecasts | ||||
More share tips and updates...
Good news from Round 3 would give SeaEnergy's share price a significant lift, but the investment case stands up even without any award. Dean Cooper, analyst at stockbroker Ambrian, believes that SeaEnergy's shares are worth 81p each just on the basis of its Scottish Round awards.
True, there are significant risks, especially the fact that SeaEnergy, on top of the £7m it raised this summer, will need another £31m between mid-2010 and 2013 when it reaches financial close on its projects. SeaEnergy is still exiting some oil and gas interests, although the values involved are small. Nonetheless the total £38m required by 2013 could result in a business with projects worth up to £400m, according to Ambrian.
