REG - Gulf Marine Services - Annual Report & Notice of AGM
18/04/2024 18:00
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RNS Number : 2357L Gulf Marine Services PLC 18 April 2024
FOR IMMEDIATE RELEASE 18 April 2024
Gulf Marine Services PLC
('Gulf Marine Services', 'GMS', 'the Company' or 'the Group')
2023 ANNUAL REPORT AND NOTICE OF 2024 ANNUAL GENERAL MEETING
The Company advises that the 2023 Annual Report, the Notice of the 2024 Annual
General Meeting and Form of Proxy are being made available to shareholders
electronically today, 18 April 2024. The 2023 Annual Report (in pdf and ESEF
compliant format), the Notice of 2024 Annual General Meeting and Form of Proxy
are available on the Company's website at www.gmsplc.com
(http://www.gmsplc.com) .
In accordance with LR 9.6.1, copies of the above documents have also been
submitted to the FCA's National Storage Mechanism and will shortly be
available for inspection on the National Storage Mechanism's website,
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Hard copies of the 2023 Annual Report, Notice of the 2024 Annual General
Meeting and Form of Proxy are today being posted to those shareholders having
elected to receive paper copies.
In accordance with Disclosure Guidance and Transparency Rule 6.3.5, additional
information is set out in the appendices to this announcement. This
information is extracted from the 2023 Annual Report. The appendices should
be read in conjunction with the Company's Full Year 2023 Results Announcement,
issued at 07:00 on 4 April 2024, RNS Number 2402J. This material is not a
substitute for reading the full 2023 Annual Report.
The Company will hold its Annual General Meeting (the 'AGM') at 2:30 p.m. (UAE
time) on Wednesday, 5 June 2024 at Gulf Marine Services WLL, Office 403,
International Tower, 24th (Karama) Street, Abu Dhabi, United Arab Emirates.
The Board recognises that the AGM is an important event for shareholders in
the corporate calendar and is committed to ensuring that shareholders can
exercise their right to vote and ask questions in connection with this
meeting. Accordingly, for those shareholders that do not wish to attend, or
those that wish to attend and are unable to do so, questions in connection
with the business of the AGM can be submitted on reasonable notice by email to
cosec@gmsplc.com in advance of the AGM and, in so far as relevant to the
business of the meeting, questions will be responded to by email and taken
into account as appropriate at the meeting itself. We are not planning to
have a Directors' presentation at the AGM and it will be held strictly to
conduct the business of the AGM.
Voting at the AGM will be by way of a poll so that all the votes cast in
advance by shareholders appointing the Chairman of the Meeting as their proxy
to vote on their behalf can be taken into account. Shareholders have one vote
for each ordinary share held when voting on a poll and this procedure ensures
that every vote can be cast.
The results of the AGM will be announced as soon as practical after it has
taken place.
Shareholders wishing to vote on any of the matters of business at the AGM are
encouraged to submit their votes (as soon as possible) in advance of the
meeting and in any case, by 11.30am (UK time) on 3 June 2024 through the proxy
and electronic voting facilities and to appoint the Chairman of the meeting as
their proxy for this purpose. Further details are included in the Notice of
the AGM.
Appendix A
Statement of Directors' Responsibilities
The following responsibility statement is repeated here solely for the purpose
of complying with DTR 6.3.5. This statement relates to, and is extracted from,
page 76 of the 2023 Annual Report.
These responsibilities are for the full 2023 Annual Report and not the
extracted information presented in this announcement or otherwise.
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole;
· the strategic report includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
· the Annual Report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
The Directors of the Company and their responsibilities as at 3 April 2024 are
set out below:
Mansour Al Alami, Executive Chairman
Hassan Heikal, Deputy Chairman, Non-Executive Director
Lord Anthony St John of Blestso, Senior Independent Non-Executive Director
Charbel El Khoury, Non-Executive Director
Jyrki Koskelo, Independent Non-Executive Director
Haifa Al Mubarak, Independent Non-Executive Director
Appendix B
Principal risks and uncertainties
The following has been extracted from pages 14 to 18 of the 2023 Annual
Report:
The rating of the principal risks facing the Group in the next five years are
set out below, together with the mitigation measures. These risks are not
intended to be an exhaustive analysis of all risks.
Risk Mitigating factors and actions
1 Utilisation
Utilisation levels may be reduced by the Strengthening Client Engagement and Foster Loyalty
following underlying causes: The Group maintains strong client relationships through consistent
communication and a demonstrated history of delivering secure and reliable
services. GMS has formulated strategies for fleet upgrades aligned with
anticipated client needs in the future. These initiatives aim to craft
• Customer concentration leading to potential changes in our contract commercial proposals that foster loyalty, encouraging customers to commit to
profile and pipeline. Risks of potential loss of some clients to competitors. longer-term contracts involving a greater utilisation of vessels
through incentivisation.
• ADNOC continues to expand its fleet thus controlling the UAE market.
Diversification Strategies Across Business Segments and Geographies
• Fleet capabilities may no longer match with changing client requirements. The Group actively seeks opportunities to optimise vessel utilisation and
Clients may increase the standard specification required for a Self-Elevating consistently evaluates avenues for diversifying its market presence by
Support Vessel (SESV), which might require the Group to upgrade some of its expanding its client portfolio.
fleet to be compliant.
Customisation Capabilities for Client Needs
The Group is capable of modifying assets in order to satisfy client
requirements. Further, GMS' vessels are adaptable to compete for a wider
market share, enabling the Group to maximise the utilisation level and charter
day rates.
To comply with LIMS (Lifting Integrity Management System) the Group has
involved engineering companies to perform technical studies on existing
equipment to extend the life of equipment (time limited).
2 Inability to secure an appropriate capital structure
Poor financial performance, such as declining Focus on Deleveraging
revenues or profitability, can make it more difficult for the Group to attract Conscious focus on deleveraging has resulted in reduction in leverage levels
financing or negotiate favourable terms. to 3.05 times compared to 4.4 times in 2022. Group anticipates net leverage
ratio to be below 2.5 times before the end of 2024.
Investors Relationship Management
Maintain strong investor relations and ensure timely dissemination of
Regulatory News Service (RNS) updates.
A low share price may prevent GMS from raising sufficient levels of equity to
recapitalise the business.
Increased share price
The share price has increased from 4.65 pence as of 31 December 2022 to 14.5
pence as of 31 December 2023, reflecting investors' confidence in the Group's
business strategy.
As warrants were issued in January 2023, this may impact the Group's ability
to attract new investors as there would be a potential dilution if these
warrants are exercised.
3 Arabian Peninsula Local Content Requirements
Arabian Peninsula region National Oil Companies (NOCs) have local content Local Content Requirements
requirements as part of their tender processes, which varies for each country,
designed to give preference to suppliers that commit to improving their local GMS fully embraces local content regulations, reflecting its extensive
content and levels of spend and investment in-country. This may prevent GMS experience
from winning new contracts or lead to financial loss and/or a reduction in
profit margins on existing contracts, which will ultimately impact operating in serving NOCs in the Arabian Peninsula region. The Group maintains offices
cash flows and net profitability. in Arabian Peninsula region countries where it operates, actively overseeing
its supply chain to prioritise the enhancement of local content. When
required, GMS collaborates with local partners in targeted markets to
strategically position itself for project acquisition. Notably, during the
tendering phase, companies with superior audited local content scores are
typically offered first refusal to match any lower bids.
Market Knowledge and Operational Expertise
The Group has well-established long-term relationships in the Arabian
Peninsula region which provides an understanding of clients' requirements and
operating standards.
Local Content
The Group continues to explore ways to improve its local content scores in all
the regions in which it operates. We are tracking the scores in two
jurisdictions.
4 Inability to deliver safe and reliable operations
Geo-political events or pandemic may impact ability to safely operate assets Safety Commitment and Operational Reliability
due to restricted crew travel in certain countries.
Our highest priority is providing safe and reliable operations. This is
achieved through a resilient Health, Safety, Environment and Quality (HSEQ)
management system and a strong safety-focused culture. Management has
The Group may suffer commercial and reputational damage from an appropriate safety practices and procedures including disaster recovery plans
environmental or safety incident involving employees, visitors or and comprehensive insurance cover across our fleet.
contractors.
Training and Compliance
Inadequate preparation for situations, such as sudden equipment failure,
inability to fulfil Our employees undergo continuous and rigorous training on operational best
practices.
client requirements and unpredictable weather could have a negative impact on
the business.
Scheduled Maintenance
Incomprehensive insurance coverage may lead to financial loss. The Group adheres to regular maintenance schedules on its vessels to ensure
compliance with the highest safety standards.
Business Continuity Plan
The Group has implemented a business continuity management plan, which it
regularly updates to ensure the reliability of its operations, including the
capability to transfer crew and source spares from different regions to
maintain safe operations.
Management continues to review and improve the current management systems and
monitors the performance of HSEQ.
5 Liquidity and covenant compliance
The business is exposed to short-term liquidity Liquidity Management
management risks due to high interest rates and inflation, which could impact The Group continues to manage liquidity carefully through focusing on cash
the debt service obligations and the Group's bank facilities covenants. collection from its customers.
Reduced liquidity could impact future operations and lead to an event of Optimising Capital Expenditure
default. This would give lenders the right to accelerate repayment of the
outstanding loans, and then exercise security over the Group's assets. The Group continues to restrict capital expenditure to essential spending as
well as specific client requirements, but without jeopardising the safe and
reliable operations of its vessels.
Breach of covenant - All covenants are closely monitored due to the Group's
performance being very sensitive to many internal and external factors such as
utilisation, operational downtime, interest rates and other variables. Covenant Compliance
The management team and Board regularly examine future covenant compliance
based on the latest forecasts and take necessary measures to avoid any
potential where a future breach of covenant is at risk. The Group monitors its
various covenants throughout the remaining period of the loan.
Focus on Deleveraging
Management continues to focus on making early repayments of the bank loans to
reduce the interest costs, improve our leverage position and meet our covenant
requirements.
6 People
Attracting, retaining, recruiting Effective Communication, Training and Engagement Initiatives
and developing a skilled workforce. Communication has remained a key practice of management. GMS held a full
two-day strategy meeting at the Group's headquarters in Abu Dhabi. This
brought together the Board and Senior Management in a productive forum
discussing longer-term plans for the business. It included presentations and
Losing skills or failing to attract new talent to the business has the discussion on each key aspect of the Group's operations, recent and future
potential to undermine performance. industry developments and ongoing and future strategic plans.
Further, events like our recent Abu Dhabi headquarters celebration,
recognising employee milestones from 10-25 years of tenure, reinforce our
united culture. As the Group matures and longtime experts pass their torches,
we are committed to developing the next generation of leaders equipped to
guide our mission.
Remuneration Policy
The Short-Term Incentive Plan (STIP) is based on a single Business Corporate
Scorecard to ensure all staff are aligned and incentivised around delivering a
single set of common goals.
Equal Opportunities
GMS is engaged in fair and transparent recruitment practices. It has a
zero-tolerance policy towards discrimination and provides equal opportunities
for all employees.
Further, GMS adds value through development programs, promotion from within
the organisation and focus on growing talent.
Resource Planning
The Group has identified all critical roles held by individuals and have
adopted processes
to ensure the smooth transition in the event of changes in those personnel.
Also, in the short term, the Group utilised recruitment specialists and
head-hunters to fulfil key positions as the need had arisen.
7 Legal, economic, and political conditions
Political instability in the regions in which Emergency Response Planning and Insurance
GMS operates (and recruit from) may adversely affect its operations. For all our major assets and areas of operation, the Group maintains emergency
preparedness plans. Insurance cover over the Group's assets is reviewed
regularly to ensure sufficient cover is in place.
As the majority of crew for certain key positions come from Eastern Europe and
Southeast Asia, political instability may hamper the recruitment, retention
and deployment of personnel. Workforce Planning and Monitoring
Workforce planning and demographic analysis is undertaken in order to increase
diversity within the Group. Multiple new recruitment agencies registered to
source and diversify crew composition across different geographies.
Monitoring Inflation and Interest Rates
Management is continually monitoring the liquidity position from changes in
inflation and a focus on cost reduction. During the year, GMS has recruited a
Cost Controller to monitor and manage financial expenditures to ensure
adherence to budgetary constraints and optimise cost efficiency. The key aim
of the Group is to deleverage through early repayments, which will reduce the
impact of interest.
8 Compliance and regulation
Non-compliance with anti-bribery and corruption regulations could be Code of Conduct
detrimental to stakeholder relations and lead to reputational and financial
loss. The Group has a Code of Conduct which includes anti-bribery and corruption
policies, and all employees are required to comply with this Code when
conducting business on behalf of the Group. It is mandatory for employees to
undergo in-house training on anti-corruption. All suppliers are pre-notified
GMS' operations are subject to international conventions on - and a variety of of anti-bribery and corruption policies and required to confirm their
complex federal and local laws, regulations and guidelines relating to - compliance with these policies.
health, safety and the protection of the environment. Compliance with these
has become increasingly costly, complex and stringent. Failure to
appropriately identify and comply with laws and regulations, could lead to
regulatory investigations. Regulations
A central database is maintained which documents all of GMS' policies and
procedures which comply with laws and regulations within the countries in
Compliance with recently introduced UAE Corporate Tax Regulations, including which GMS operates.
adherence to transfer pricing requirements, poses potential administrative and
financial obligations for the Group. A dedicated Company Secretary is in place to help monitor compliance, in
particular for UK legal and corporate governance obligations.
External Review
The internal auditors help ensure compliance with GMS policies, procedures,
internal controls and business processes.
Engagement of Tax Consultant
A reputed tax consultant has been engaged to assist with a Group tax health
check, a review of Group's transfer pricing policy and implementation of
corporate tax in the UAE.
9 COVID-19 pandemic - Removed during 2023
10 Cyber-crime - security and integrity
Phishing attempts result in inappropriate Cybersecurity Monitoring and Defence
transactions, data leakage and financial loss. The Group is at risk of loss GMS operates multi-layer cyber-security defences which are monitored for
and reputational damage through financial cyber-crime. effectiveness to ensure they remain up to date.
GMS engages with third-party specialists to provide security services.
11 Climate change
Climate change poses both transition and physical risks to the Group. Legal and Policy Monitoring
The Group carefully monitors legislative developments to ensure compliance
with all relevant laws both in the UK and the Arabian Peninsula region. The
The transition risks come from the decarbonisation of the global economy. TCFD disclosure in this report explains our assessment and response to
climate-related risks to be transparent with our stakeholders.
This could result in changing investor sentiment making new investors harder
to find. It may bring changing client preferences leading to reduced demand
for our services.
Physical Infrastructure
The Group monitors weather patterns to ensure conditions are suitable for our
New legislation could require us to increase reporting and possibly substitute offshore employees and vessels. Onshore buildings and offshore vessels are
our products and vessels for greener alternatives. designed to withstand the heat in the Arabian Peninsula region.
Physical risks include rising temperatures, which could further impact working
hours, and rising sea levels, which could affect where our vessels can
operate. Environmental Impact
GMS aims to minimise its environmental impact by installing energy and water
efficiency measures. We also ensure our machinery and engines are regularly
The physical risks also interact with principal risk 4 - Our inability to maintained so they operate efficiently.
deliver safe and reliable operations.
Long-term Planning
GMS has a proven track record in the renewables sector which provides
versatility in our business model. Our vessels are built to be as flexible as
possible to maximise utilisation.
We are aware that we may need to consider changing sea levels and
environmental legislation when replacing vessels that are being retired in the
long term.
- Ends -
Enquiries: GMS +44 (0) 207 603 1515
Mansour Al Alami, Executive Chairman
Celicourt Communications +44 (0)20 8434 2643
Mark Antelme
Philip Dennis
Notes to Editors:
Gulf Marine Services PLC, a company listed on the London Stock Exchange, was
founded in Abu Dhabi in 1977 and has become a world leading provider of
advanced self-propelled self-elevating support vessels (SESVs). The fleet
serves the oil, gas and renewable energy industries from its offices in the
United Arab Emirates, Saudi Arabia and Qatar. The Group's assets are capable
of serving clients' requirements across the globe, including those in the
Middle East, South East Asia, West Africa, North America, the Gulf of Mexico
and Europe.
The GMS fleet of 13 SESVs is amongst the youngest in the industry, with an
average age of eight years. The vessels support GMS's clients in a broad range
of offshore oil and gas platform refurbishment and maintenance activities,
well intervention work and offshore wind turbine maintenance work (which are
opex-led activities), as well as offshore oil and gas platform installation
and decommissioning and offshore wind turbine installation (which are
capex-led activities).
The SESVs are categorised by size - K-Class (Small), S-Class (Mid) and E-Class
(Large) - with these capable of operating in water depths of 45m to 80m
depending on leg length. The vessels are four-legged and are self-propelled,
which means they do not require tugs or similar support vessels for moves
between locations in the field; this makes them significantly more
cost-effective and time-efficient than conventional offshore support vessels
without self-propulsion. They have a large deck space, crane capacity and
accommodation facilities (for up to 300 people) that can be adapted to the
requirements of the Group's clients.
Gulf Marine Services PLC's Legal Entity Identifier is 213800IGS2QE89SAJF77
www.gmsplc.com (http://www.gmsplc.com)
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