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Engineer Kentz reports strong year in 2011

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Engineering giant Kentz Corp Ltd (LON:KENZ) expects 2011 revenues and profits to be marginally ahead of consensus, it said in a pre-close statement today.

The firm reported another strong year with growth in revenue, profit and backlog.

Separately, it announced that it has appointed Christian Brown as its new chief executive with effect from February 1 this year - succeeding Hugh O'Donnell who has been in the role for 12 years.

Kentz posted a record backlog of US$2.40 billion at the end of the year, an increase of 50 per cent from December 2010, underpinned by further new awards and natural growth on existing contracts.

The company now has a pipeline of prospects which stands at over US$10 billion, it told investors.

Papua New Guinea shows opportunity for growth, the firm said, as shown by further new contract wins.

Kentz had around US$223 million in cash at the end of the year, which supports continued growth.

In today' statement, O'Donnell said: "2011 was another strong year for Kentz with growth in revenue, profit and backlog.

"We anticipate continued development in both our core and emerging markets such as Russia, Australia and Canada. Overall, the outlook is very positive, underpinned by the solid project pipeline of our core clients, which gives us confidence for 2012 and beyond."

Broker Brewin Dolphin rates the stock a 'buy' with a target price of 600 pence.

"Kentz has an impressive track record of meeting and exceeding market expectations, and delivering consistent growth. With backlog, pipeline and balance sheet all strong, we see this continuing," it said in a note.

It added that the company was trading broadly in line with its peers but saw scope for earnings upgrades throughout the year.

The broker added it believes Kentz is a quality business which would be a solid buy for the long term.

The firm's 2011 results are due to be published on March 26 this year.

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