Were shares in Petrofac (PFC) oversold following the revelation that former global head of sales David Lufkin had pleaded guilty to 11 counts of bribery? The muted market reaction to the oil services group’s full-year numbers suggests not.
Despite a sooner-than-forecast swing to net cash, and what chief executive Ayman Asfari characterised as a "healthy new order intake", investors were forced to swallow a 21 per cent drop in net profits within the core engineering and construction division and a further $82m (£62m) of exceptional items booked in the second half of the year.
At $9.6bn, the backlog has again thinned, and is now down 18 per cent since the end of 2016, the year when client capital budgets were widely seen to have troughed. Though the bid pipeline is described as "busy", Mr Asfari acknowledged "a higher degree of uncertainty in the level of awards in the near term".
How much this caution relates to collateral effects of the Serious Fraud Office investigation is indeterminable. But Petrofac still felt it necessary to declare its "utmost respect for the robust, highly structured and rigorous processes of its clients" in its summary of the probe’s recent developments. The group also saw fit to mention the "common practice" of using agents within the industry, its retention of "comparatively few agents", and preference for "regional and local infrastructures".
| PETROFAC (PFC) | ||||
| ORD PRICE: | 411p | MARKET VALUE: | £1.42bn | |
| TOUCH: | 410-411p | 12-MONTH HIGH: | 679p | LOW: 376p |
| DIVIDEND YIELD: | 7.0% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 204¢ | NET CASH: | $90m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 6.24 | 171 | 35.1 | 65.8 |
| 2015 | 6.84 | -335 | -103 | 65.8 |
| 2016 | 7.87 | 100 | 0.3 | 65.8 |
| 2017 | 6.40 | 45.0 | -8.5 | 38.0 |
| 2018 | 5.83 | 107 | 18.9 | 38.0 |
| % change | -9 | +138 | - | |
| Ex-div: | 25 Apr | |||
| Payment: | 24 May | |||
| £1=$1.33 | ||||
