Good morning

Kentz contract award

I’m on the road for a lot of today with the mighty Alkane Energy so just wanted to point out that Kentz has announced a ‘significant’ contract this morning in Canada. The contract, which is for Imperial Oil in the Athabasca oil sands in Northern Alberta is yet another win in Canada which is very good and I know CEO Chris Brown has concentrated hard in this region for a while.

Trying to guess what the contract is worth is not easy but ‘significant’ usually means pretty spicy and I take it to mean between 5 – 10% of the order book which at present stands at $2.6bn, so we could easily be talking $200m here which is most pleasing. The fact that it runs until 2016 also gives a clue about the size and duration of the work and in TSS the margins are good too.

Kentz is chronically undervalued at 386p which gives it a market cap of £445m when compared to the order book which will soon be tapping on $3bn, is absurd. On a P/E basis the company is sub ten and with figures due on 25th March I am expecting to be impressed, this is a steal at this price.

Kentz Corp 1 Year chart

Kentz Corp 1 Year chart

More later but this afternoon I’m afraid.