Former stock market darling Gulf Keystone Petroleum showed signs today of bouncing back from a shareholder rebellion, buoyed by a rising share price and fresh management.
Some in the City say GKP still has a top--heavy cost base and isn’t paying a high enough dividend, but new chief executive Jon Harris reported a half-year profit of $65 million compared to a loss of $33 million last time.
The company points out that with dividends of $100 million the stock is yielding 22% and says the cash on the balance sheet is there for future growth.
Over the summer a shareholder vote led to the departure of then CEO Jon Ferrier, while chairman Jaap Huijskes clung on and is expected to remain.
GKP shares today rose 13p to 168p, leaving the business valued at £360 million. That’s a far cry from a few years ago when the firm was a go-go stock popular with City traders and London cabbies alike.
Stifel, the broker, has a 250p target price for the stock. Peel Hunt an even punchier 300p.
Harris said: “We continue to deliver against our commitment to balance investment in growth and returns to shareholders. Today, we are pleased to declare an interim dividend for 2021 of $50 million, bringing total dividends this year to $100 million.”
GKP’s principle asset is in Kurdistan – the company says former difficulties with the local government are in the past.
Revenues rose 162% to $131 million.