The Lamprell Group has played an important role in the development of the offshore industry in the Arabian Gulf for over 30 years, providing increasingly specialised services to the offshore oil industry. Lamprell is managed by British nationals, with its corporate headquarters in Sharjah, one of the United Arab Emirates, Lamprell operates a full service jackup rig refurbishment facility in Sharjah and a modern, well equipped fabrication facility in Jebel Ali Free Zone, Dubai.

Lamprell located in the most important oil and gas region in the world, in one of the key commercial centres in the UAE.

Lamprell has its own core skilled and experienced workforce as well as access to additional skilled labour from the local labour supply market.


AIM Rule 26 Disclosure

This, in addition to the Group�s safety focused culture and experienced project management skills, helps to ensure customer satisfaction is maximised whilst risks are reduced.

Lamprell has built up its strong market position by offering a differentiated service to its clients based on safe working practices and completing projects on time, on budget and to a high quality. Accordingly, we believe that the Company has established a position of sustainable competitive advantage in the region.

A good balance Edmond ............

Edmond Jackson's Stockwatch: Lamprell (LAM) | Fri, 22/03/2013

The latest 2012 preliminary statement from this engineering services provider to the international oil and gas industry shows its new management team achieving a platform for recovery after serial woes last year. The FTSE SmallCap shares in Lamprell (LAM) are testing 150p, up at least 50% since I featured them as a recovery play for 2013, then reiterated it in January following news of waivers on bank covenants.

While the pick was a good one - an essentially sound business with actionable temporary problems - the turnaround is also benefiting from "a robust and expansive oil and gas industry" and the shares' rally also from the "risk-on" sentiment fuelled partly by quantitative easing. This has largely anaesthetised markets against ongoing global risks, yet as the news over Cyprus shows, some are inflammable. Operationally and financially the business appears to have passed its nadir, so the main future risk is whether the oil and gas industry gets hit by external factors.

Lamprell financial highlights Year to 31 December 2012 2011
Revenue ($ million) 1,045.50 1,147.90
Operating loss/profit ($m) -84.5 90.2
Loss/profit before income tax and before exceptional items ($m) -105 74
Loss/profit before income tax and after exceptional items ($m) -109.7 63.5
Loss/profit after income tax ($m) -110.5 63.3
Diluted loss/earnings per share (US cents) -42.4 26.5
Net cash/debt as at 31 December ($m) 104.1 -101.7
Dividend per share (US cents) 0 8

In terms of limiting downside risk, there is an equivalent 47.2p a share of net tangible assets, although the real prop is customers' confidence after last year's publicity over mismanaged contracts.

This is shown by new contracts with an aggregate value of $930 million (£614 million) last year supporting a current backlog (order book) of $1.3 billion and a bid pipeline of $4.1 billion. Just recently the Jindal Group has entered a second jack-up rig contract, which underlines market credibility. The preliminary statement notes a joint venture for land drilling rig services in Saudi Arabia, "enhancing our strong presence in that market... we plan to leverage our long-term relationships with our Saudi partners and our well-established expertise in the land rig sector".

A new chief executive and finance director are now in place and there has been a clean sweep of the previous senior management team - a desirable yet rarely achieved goal in recovery situations. Usually certain individuals are kept under the guise of ensuring continuity and because wholesale replacement is difficult and expensive; however this may not achieve a break with the past.

Yet Lamprell appears to have achieved such in four months, with a new organisational structure prioritising project management and execution aligned with reporting structures. This should cut, if not eliminate, nasty surprises.

While the losses story conveys "Lamprell in the red" with no dividend, this is historic news, hence the shares firming near 150p despite wider market falls. Bear in mind that projections are difficult at this stage and what forecasts exist do not anticipate significant profit; hence the forward price/earnings multiple is currently high, over 20 times. This reflects the board's expectation for 2013 as "a recovery year, with stable revenues as compared to 2012 and a gradual return to profitability during the year". Timing issues make it hard to determine whether profit or loss will result but the circa 50% re-rating in the shares shows the market recognises the stepping stones put in place.

Recent broker views and targets are mixed, with Bank of America Merrill Lynch (the company's broker) upgrading from 140p to 180p and advising 'buy' while JP Morgan Cazenove reiterates 'underweight' with a 114p target. Yet this is typical of a situation where brokers promoting the shares became embarrassed and moved on, such that the company is left with its own in support and others cautious.

Besides ongoing contract news, a restructure of debt facilities with revised covenants is the next milestone to watch for, although the preliminary statement does not give clues as to timing. The profile of borrowings is short term, however they have been cut from $251.1 million to $159.3 million in context of balance sheet cash up from $149.4 million to $263.4 million, which altogether removes the risk of catastrophic loss to shareholders - among the reasons for a sub-70p share price low last year. The rather rapid improvement in the debt/cash profile also shows Lamprell's problems as relatively short term and manageable.

The new team looks to be defining the art of the modern turnaround; I believe doubts that remain relate more to general industry risk (according to global economics and politics). Among reasons for the decline in 2012 turnover was a substantial fall in the renewables segment which saw lower activity, not solely delays in Lamprell's execution. Yet offshore platform construction saw an approximate trebling of revenue and it is likely going to need some major geopolitical event to compromise momentum in oil and gas activity.

I would therefore distinguish Lamprell from the kind of recovery shares that can be a flash in the new year pan - rising with the classic January risk rally then reversing. This happens when the industry involved remains weak, company finances challenged and past cultures/people continue.

While this set of results is red-inked, it crucially underlines a radical departure from the past, and in a healthy industry, hence patient shareholders should continue to be rewarded.

nice to have a sensible appraisal in english rather than technical analyst gobbledegook

Liberum Capital Buy 142.25 139.50 175.00 175.00 Retains

Nice to have a Barsteward as a cynic

Instead of PFC on the Portfolio ............

cynic - 01 Mar 2013 09:58 - 505 of 505
this one is turning into a real bad egg, despite consistently turning in annual growth in mid teens

note - some nasty one's can not keep their mouth shut, it seems they were born in a cold stable.

MJ/MRSI/menorca1 (et al) - back in your cage you silly boy ...... you've managed to keep a civil tongue for the last few weeks, so try your best to keep it that way; you then remain interesting to read

as it happens, i hold both LAM and PFC

you can try to have what you have not got

but you do not need to try, you got plenty of nastiness may I say ( keep it for you cold stable family ), so I will allways have an answer and put you down like a DOG you are.

try to read back, try to remember, you suppose to learn from your old suffering life, do not try to give hard time to posters here.

stop hidding yourself under mama's shirt and go complaning to MAM.

You have been a GRASS all your bl@dy life.


re - cynic - 28 Feb 2013 13:37 - 497 of 500
have already requested that this arschloch be removed once again

Ruprecht - behave or i'll have to take away your favourite saucepan and spoon .... it seems you forgot to take your medication this morning so please go and take it straight away

all settle

go back where you belong now

plenty of Vodka, but you prefer....cat's milk

plenty of noyse but not Luton

plenty of problems but not the court room

plenty of cash but not for the TAX man ( tax avoidance )
people call it ... crooks

you really are truly pathetic at times; probably more to be pitied than castigated, but it's a close call

I know which one you are ...

refugee and crook

send him back

never mind the crook's book will take 24 years to be sorted

            EVENING FUN

Cyprus Banks 'To Reopen Tomorrow' After Bailout Deal

A little bird has told me, that tomorrow a Rusian Lady,
plans to go to the "Licki" Bank of Cyprus,
with a large suitcase and withdraw all her money.

I would advise her, to go to the bank with her normal hand bag,
because her account of "suspicious money" will be restricted,
with not enough money to fill her small hand bag.

note
Licki = Laiki
           

From the "IC" last Friday

Home > Shares > News & analysis
Lamprell fined by the FSA

The share price of Lamprell (LAM) has partially recovered since it bottomed-out at 62p midway through November, and while there’s some evidence to suggest that the new management team is making progress on the operational front, the 2012 full-year report reflects a dreadful year that culminated in a £2.4m fine from the UK Financial Services Authority for failing to report late-running or over-budget projects to the market in good time.

The specialist rig engineer made a succession of profit warnings in 2012, citing supply chain issues and delivery delays on its Windcarrier turbine installer. The end result being that Lamprell booked a pre-exceptional operating loss of $84.5m (£55.6m), against a profit of $90.2m in the previous year. Admittedly, Lamprell fulfilled some contracts during the latter stages of 2012, which brought down year-end trade/receivables by £270m to $398m. The forward order book at $1.3bn has contracted by 12 per cent since the end of July, but all major projects are progressing to schedule. Post year-end Lamprell received waivers from its lenders with regard to covenants on its existing debt facilities.

BoA/Merrill Lynch believe that Lamprell with be earnings neutral in 2013, and predicts a recovery in adjusted EPS to 17¢ in 2014.

LAMPRELL (LAM)
ORD PRICE: 144p MARKET VALUE: £375m
TOUCH: 143.5-144p 12-MONTH HIGH: 369p LOW: 62p
DIVIDEND YIELD: nil PE RATIO: na
NET ASSET VALUE: 156¢* NET CASH: $104m

Year to 31 Dec Turnover ($bn) Pre-tax profit ($m) Earnings per share (¢) Dividend per share (¢)

2008 0.74 85.5 39.1 8.7
2009 0.43 28.4 13.2 3.5
2010 0.50 65.2 30.2 12.3
2011 1.15 63.5 26.6 8.00
2012 1.05 -109.7 -42.5 nil

£1 = $1.52 *Includes intangible assets of $220m, or 84¢ a share

IC VIEW:
The restructuring seems to be working and assuming Lamprell can make a modest $49m operating profit on $1.1bn of sales in 2014, then the shares are only rated on 13 times forward earnings. High risk, but the shares rate a speculative buy especially as a close above 153p would be a strong point-and-figure and swing-chart buy signal.

HSBC Neutral 0.00 141.75 140.00 160.00 Reiterates

if the IC view is not a misprint, then trying to guess results in 2014 would be beyond the powers of Mystic Meg or let alone the Oracle at Delphi

re - if the IC view is not a misprint, then trying to guess results in 2014

Some posters "ALLWAYS" talk from their backside
or maybe as I said before, they have idea of nothing but bla,bla,and bla.
sounds like an unhappy person trying to find faults were there are none

post 398 says.....
BoA/Merrill Lynch believe that Lamprell with be earnings neutral in 2013, and predicts a recovery in adjusted EPS to 17¢ in 2014.

menorca1 says....

17¢ : 1.52$ = 11.2p EPS

Share price 143p : 11.2p = PE of 12.79 as IC said 13 for 2014

IC wrote .... assuming Lamprell can make a modest $49m operating profit on $1.1bn of sales in 2014

like wot i sed b4

What misprint?

IC is taking brokers forecast .... ...BoA/Merrill Lynch that is why was posted at the same time

Just take it on the chin instead of going around and around

We all assume you had NEVER any idea and now is well clear

FFS - you are so obsessed with being abusive that it has clearly made you a very sad person indeed

anyway, i hold LAM and (of course) PFC in this sector and am happy to continue to doing so

re - bad person

You were spoted long time ago as ( cynic person ) that was the reason you decided on using that nickname cos is describe you VERY WELL.

Time an time again posters have been putting up with it but not me, were I noticed those arrogant posting.

When ask about it and not able to win the battle, then change the subjet as above.

You are not only a looser, but also a LIAR ( caught you many many times ) and naturally a "cynic"

note - Caught You In A Lie - song

just go and take your medication and stop making a total idiot of yourself by with your wild and totally unsupportable personal allegations and abuse