Thursday January 8, 09:16 AM
UPDATE 2-Wellstream sees growth in 2009 after solid 2008
LONDON, Jan 8 (Reuters) - British oil and gas industry equipment supplier Wellstream Holdings (LSE: WSM.L - news) said business remains
buoyant despite falling oil prices as it forecast 2008 results in line with expectations and continued growth in 2009.
Wellstream, which designs and makes flexible risers and flowlines, said revenues grew more than 35 percent in 2008.
It said its sales backlog increased from 295 million pounds at June 30 last year to about 330 million pounds at Dec 31, slightly lower than the 336-million-pound order book it had at the end of 2007.
'The fundamentals of the sector continue to be attractive and our outlook for 2009 remains one of continued growth,' the group said in a trading statement, citing its robust balance sheet and strong customer base.
At 0858 GMT, the shares had recovered early losses of more than 4 percent to stand about 1.6 percent higher at 451 pence, outperforming a 0.5 percent rise in the European oil and gas sector.
Analysts at Arden Partners (LSE: ARDN.L - news) said the sales backlog of 330 million pounds was lower than the 350 million pounds that the company said it had in November, which the broker said reflected wider market uncertainty.
Arden said it was continuing to advise investors to buy the shares. 'Whilst this statement may dampen sentiment in the short term, we continue to believe product-backed companies provide investors with quality earnings streams in what are becoming more challenging markets,' the broker said in a note.
Merrill Lynch (NYSE: MER - news) , which also has a 'buy' recommendation on the stock, said in a note that Wellstream's upbeat comments about 2009 were 'a clear positive, in our view, considering the uncertainty surrounding the pace of contract awards in the sector.'
(Reporting by Philip Waller; editing by John Stonestreet) Keywords: WELLSTREAM/
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