ROS .. the gamblers anonymous thread !!!

#14.1m does seem a bit on the cheap side for a business that made a net profit of #1.6m in 2004. However, turnover for 2004 was actually down 10%, and both turnover and profit for H1 2005 (the busier half of ROSL's year) were down again. Is this a trend? Judging from recent reports on the Aberdeen oil economy, it looks like oil services businesses (eg. Badentoy) will be feeling the pinch in years to come, with some analysts predicting at least 20,000 Aberdeen job losses in the next decade (a tip: if you're thinking of investing in Scottish property, think Inverness-shire). The England and Japan operations are doing well, but the Norwegian plants need more business going forward as their contracts were due to run out in late 05/early 06.

It's been said here that ROSL's management will have paid for the business in just seven years. Not a chance. Once you add yearly interest on the #14.1m loan, I think they might do it in 10 to 12, and that's assuming 10 to 12 good years in a row.

At the end of the day, ROSL went to the highest bidder, and ROS got a not-too-bad deal. It wasn't a "fire sale", and we were too optimistic (a year ago) expecting up to £20m. After the Interims I was hoping for around #18m. Still, from what I can tell #14.1m was more than book value, which brings me to what's really important - the balance sheet.

At 30 June 2005 ROS had net debt of some #13.9 million. With the sale of ROSL for #14.1m, ROS are finishing the year according to Remp's plan - virtually debt-free. The sale of 7H is imminent, and since the BOS have completely written off the debt associated with 7H, it will be interesting to see what transpires.

The ongoing Tenge litigation is the only thorn left in Ramco's side. Let's hope for a satisfactory conclusion to those proceedings. I remain optimistic that Remp and Bertram will ultimately restore shareholder value. We've got unrisked GIIP of 837bcf in Donegal and the Celtic Sea alone, plus 7H oil, plus Bulgaria, plus the option on Monty, all carried for free. 2006 may turn out to be a very good year for ROS. Still a worthy punt imho, or as Dylan put it: "What's the sense in changing the horses in midstream?".

Hope you all have a good New Year.