By Daniel Hunter
Sheridan Admans, investment research manager at The Share Centre, picks Petrofac as his share of the week.
“Final results for the year ending 2011 saw Petrofac report strong profit and revenue growth, which supported a dividend increase of 25% to 54.6 cents," he said.
"The company expects growth to continue in 2012, led by expansion into new geographic regions and bidding for smaller contracts which it believes are quicker to deliver.
“Targeting other geographic regions diversifies some of the specific risks it faces by having so much exposure to North Africa and the Middle East, a region which remains highly volatile with regards to political tensions.
“Petrofac also has a focused acquisition strategy and hopes this will allow it to build on its capabilities and attract talent, although it is not looking for a large scale purchase.
“We continue to recommend investors ‘buy’ Petrofac as it continues to demonstrate excellent growth potential. Developments in smaller, more nimble contracts and diversifying its geography reliance should smooth returns over time.
"Investors should note that the company’s performance over the years has been good, its balance sheet looks healthy and forward valuation metrics suggest there remains potential for growth.”
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