Lamprell pulled its half-year dividend and reported losses broadly in line with the guidance given in the last of the three profit warnings issued by the specialist rig engineer this year.
Despite a solid rise in sales, profits went into reverse as supply chain problems and delivery delays on its Windcarrier turbine installers resulted in $46.2m (£29.2m) in contract losses during the six-month period. The succession of profit warnings and deterioration in trading has meant Lamprell has shredded two-thirds of its market value since the start of the year. As a consequence, the group has breached its bank covenants and confirmed that banking agreements will need to be restructured before the year-end.
Operationally, the group has maintained a strong forward order book at $1.5bn, and has also overhauled management at a divisional level since the profit warnings, while working on improving processes, systems and controls. Investor confidence, however, remains in short supply. Analysts at Investec Securities make the point that "the shares are unlikely to recover until the market regains confidence that existing contract losses are ringfenced and the impact on 2013, as opposed to 2012, are accurately quantified".
The broker predicts a full-year loss per share of 8.7¢ (EPS of 26.5¢ in 2011).
| LAMPRELL (LAM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90p | MARKET VALUE: | £233m | |
| TOUCH: | 89-90p | 12-MONTH HIGH: | 369p | LOW: 67p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | NA | |
| NET ASSET VALUE: | 180¢* | NET DEBT: | 8% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 384 | 18.6 | 8.6 | 4.0 |
| 2012 | 528 | -46.7 | -18.1 | nil |
| % change | +38 | - | - | -100 |
£1 = $1.58 *Includes intangible assets of $228m, or 87¢ a share | ||||
