"Our timing wasn't particularly good," admits Enteq Upstream's (NTQ) chief executive Martin Perry. The company raised £57m in 2011 and early 2012 to acquire innovative drilling technology businesses in the North American oil and gas sector. But shortly thereafter, natural gas prices plunged and drilling activity fell dramatically - along with Enteq’s share price.
Last year, the market broadly stabilised and drilling for oil - the price of which remains reasonably high - improved. "Steady is the word I would use to describe market conditions now," says Mr Perry. Sales of Enteq's bundled drilling equipment are starting to pick up again and like-for-like revenues increased 24 per cent in the year to end-March, with new customers representing greater than 25 per cent of total turnover.
Nevertheless, Enteq is pressing ahead with cost-cutting - especially at its head office - as it focuses more on organic growth rather than its previous 'buy and build' strategy. This, as well as the downturn, resulted in non-cash impairment charges of $9.8m (£5.8m) during the year. Strip that out and Enteq is actually modestly profitable: cash profits climbed to $1.9m from $0.1m the year before.
Broker Investec Securities expects adjusted EPS of 4.2¢ for 2015 and 5.7¢ in 2016 (from 2.2¢ in 2014).
ENTEQ UPSTREAM (NTQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37p | MARKET VALUE: | £22m | |
| TOUCH: | 36-38p | 12-MONTH HIGH: | 66p | LOW: 31p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 129¢* | NET CASH: | $18.8m | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2012 | nil | -3.3 | -28.8 | nil |
| 2013 | 15.4 | -0.7 | -1.3 | nil |
| 2014 | 24.6 | -11.5 | -19.6 | nil |
| % change | +60 | - | - | - |
*Includes intangible assets of $44m, or 75¢ a share £1=$1.69 | ||||
