Shareholders in GYG (GYG:135p), the global leader in new-build and refit superyacht painting, have enjoyed a benign passage since the company listed its shares, at 100p, on the Alternative Investment Market (Aim) in early July. If maiden results this week are anything to go by, then expect the share price to make waves beyond the 150p target price I outlined at the IPO (‘Floating a profitable passage’, 4 Jul 2017).
Boasting a 17 per cent market share, GYG completed 167 refit projects in 2016 with an average contract value of just over €200,000 (£175,000), a sum the owners can easily recoup by chartering out their prized status symbols. Clients include half of the largest superyacht owners in the world and, with a retention rate of 86 per cent for repeat business, GYG clearly has strong customer relationships. Importantly, the number of billionaires, who are the only people who can afford to build and maintain superyachts, shows no sign of waning, rising fivefold to 1,826 between 1995 and 2015, and is predicted to hit 2,500 by 2020.
This market growth is feeding through to GYG’s bid pipeline for refit and new-build projects, which now stands at €385m, and rising, offering scope for the company to exceed the 7 per cent revenue growth rate posted over the past three financial years. In fact, buoyed by the acquisition of south of France-based rival, ACA Marine, GYG’s revenues increased by 19 per cent to €33.9m in the six months to end-June, accounting for half of house broker Zeus Capital’s full-year estimate, and in line with guidance of full-year adjusted pre-tax profits rising from €5.1m to €7m to produce EPS of 10.4¢.