Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
Shares of engineering firm Lamprell (LSE:LAM) lost nearly two-thirds of its market value in trading today, after the company said its profit margin for 2012 will be “below the Board’s original expectation”, making it one of the biggest losers on the London Stock Exchange.
At 12:00 GMT, Lamprell lost £1.77, or 60% of yesterday’s closing price, to £1.17, its lowest in nearly three years, after saying that the group incurred a “small loss” in the first half of the year, but are expecting a recovery during the second half.
Lower Demand
The UAE-based provider of rigs for the oil and gas industry cited the “current tightening in the worldwide supply chain for specialised jack-up rig components” to cause delays in the delivery of their contracts. This has impacted revenue generation and under-utilisation of resources, including personnel, even as the order book remains “substantial”.
“During the year to date the Group’s financial performance has been adversely affected mainly by progressive delays in key specialised vendor equipment deliveries for new build jackup projects together with the progressive slippage in the timing of expected new project awards and delayed client deliverables,” Lamprell said in a statement issued today.
Expecting revenue for 2012 is to be around US$1.1 billion, at only a 3.5% profit margin. The Board of Lamprell believes that margin performance will come in 2013.
The Group also revealed a huge increase in debt, adding $71 million to the December 2011 figure of $102 million, to $173 million as of 14th May 2012.
Still Optimistic
The trading statement issued earlier today replaced its interim management report scheduled to be released on 17th May 2012. With this still in mind, Lamprell’s Board of Directors said they remain optimistic of the long term prospects of the company, with the company’s order books expected to be $4.8 billion by the end of April 2015.
“We see continued strength in our operating markets, our bid activity remains at a historically high level and the Board remains optimistic that the long term prospects of the Group remain promising,” the Board’s statement read.
Company Spotlight
Lamprell is a leading builder of drilling rigs used in the oil and gas industry as well as other offshore vessels and structures. The company was established in the 1970’s and joined trading on the Alternative Investment Market in 2006.
In 2008, the company moved to the main listing of the London Stock Exchange and is a part of the FTSE 250 Index.
References
↑ Official Company History
↑ Lamprell Company Profile
