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.

That's what I thought, totally useless though eh :O)

Edmond Jackson's Stockwatch: Lamprell
By Edmond Jackson | Tue, 18/06/2013 - 00:00

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

In a March comment piece on FTSE SmallCap company Lamprell (LAM), I noted that "besides ongoing contract news, a restructure of debt facilities is the next milestone to watch for", and this has now been achieved.

The Dubai-based oil industry services group reports in US dollars, and its new $181 million (£115 million) facility comprises two loans of $100 million and $60 million and a $21 million revolving credit facility - all to mature in June 2016, albeit with the first loan amortising over the period and an option to extend the second by a year.

The average interest rate is estimated at 6.7%, presumably with regard to the risks while also enabling Lamprell to progress its turnaround. Significantly this enables the group to proceed without a rights issue, after dilution or a loss of control to creditors was feared when problems intensified last July. It marks a key step to de-risking the group, improving the shares' risk/reward profile.

Lamprell financial summary


Consensus estimate
Year ended 31 Dec
2008 2009 2010 2011 2012 2013 2014
Turnover (£million) 508
263
322
739
643


FRS3 pre-tax profit (£m) 58.6
17.6
41.7
40.8
-67.5


Normalised pre-tax profit (£m) 60.7
17.5
27.6
47.4
-62.5
0.34
36.7
FRS3 earnings per share (pence) 26.6
7.98
18.9
17
-26.1


Normalised earnings/share (p) 27.6
7.93
12.5
19.8
-24.2
0.13
14.1
Cash flow per share (p) 6.64
-6.61
67.1
-19
54.1


Capex per share (p) 16.9
5.05
7.14
15.3
4.37


Dividend per share (p) 8.77
1.98
4.54
8.32
5.15
0
2.95
Net tangible assets per share (p) 65.6
65.5
81.6
74.9
44


Source: Company REFS.
The chart is quite jagged since I advocated the group as a recovery share for 2013, at about 100p, and reiterated this in January. Its price recently tested 180p then fell briefly below 140p and is currently just under 150p.

A share like this is prone to get swayed by the "risk on/risk off" sentiment swings dominating markets, hence investors need to keep a measure of the turnaround that is evolving. A trailing stop-loss approach would have triggered a 'sell' order after the fall from a 179p one-year high, but this volatility is more to do with quantitative easing (QE) driven greed in markets turning to fear, while Lamprell's turnaround is proceeding to plan under a new chief executive and finance director.

Another key concern has been whether client loyalty would erode following mismanagement issues that erupted last year. The operational update within the 17 May interim management statement conveyed resilience: "The various major engineering, procurement and construction projects currently underway in each of Lamprell's three large facilities in the United Arab Emirates are progressing according to plan."

A strong position in oil rig-refurbishment projects in the Middle East was central to why I thought there was a decent chance of a turnaround. The market has looked robust due to the fairly long lead times clients have to operate around; and global energy demand sustaining oil prices. This also improved the odds that bankers would support the company towards a refinancing.

Bear in mind that any drop in oil prices is liable to knock sentiment towards oil industry services shares, as markets would anticipate a slowing in companies' order books. Oil demand needs watching, especially with regard to developing countries, where credit risks are increasing.

Lamprell says it "maintains a substantial order book extending to [the first quarter of] 2015 which at the end of April 2013 was $1.2 billion. The group's bid pipeline was then in the order of $4 billion..." This looks plenty supportive, just bear in mind that slight changes in (expectations for) the order book for example at Petrofac (PFC) has created far more substantial changes in its market value (27% volatility from Petrofac's 2013 high to low). The market is looking very long term, or just being twitchy.

Consensus forecasts in Company REFS (see table) are based on just two brokers: Investec, which advised 'sell' on 22 May; and Arden, 'neutral' on 31 May. Both have upgraded their 2014 profit and earnings forecasts however. At 148p a share this implies an 18-month forward price/earnings multiple just over 10 times, although there is scope for variability on such a timescale, which also explains diverging share price targets of 114p to 175p on a summary of five brokers' views.

As regards the likes of JP Morgan Cazenove reiterating 'underweight' with a 114p target, I feel this can reflect analysts taking a cautious view, possibly after the humiliation of a 'buy' stance being trashed by events. Investec advises 'sell' but has still upgraded its target price from 90p to 145p. I would not be swayed by brokers' continuing negativity so long as the turnaround proceeds to plan and the macro context is reasonably supportive. It generally pays long-term investors to buy into industry-leading firms during a crisis that can be fixed, also subsequent months if sentiment is weak.

Announcements from 2013 portray a respectable turnaround, underlined by the latest news on debt facilities. In the short term, sentiment can still be hit by any of various macro risks - such as QE tapering, developing countries' credit and mounting worries over the Syrian conflict spreading in the Middle East.

Shareholders can take confidence in Lamprell's improving risk profile and if the price does drop amid market jitters, then it is another chance for buyers. The more significant risk is whether any of several potential crises may disrupt economic growth, meaning a fall in energy demand which could cause client hesitation for service providers.

Yet the forecasts of a resumed dividend for 2014, possibly involving guidance from management, show confidence in a robust turnaround. Holders can also take comfort from this if markets are set for a volatile summer.

For more information see www.lamprell.com.

StockMarketWire.com
Analysts at JP Morgan Cazenove have upgraded their recommendation on the suffering oil rig engineering company Lamprell (LON:LAM) to "neutral" from "underweight" following their recent site visit to the company"s Jebel Ali and Hamriyah yards. The broker is encouraged that the "back to basics" strategy is starting to pay off and is confident that the recent profit warnings are now behind the company. Analysts have increased their price target by 44 per cent to 164 pence per share (previously 114 pence) implying a potential upside of around 14 per cent. Earnings per share estimates have been increased to 1.4 cents (from 0 cents) for 2013 and by 6 per cent to 21.48 cents for 2014. Separately, Liberum Capital upgraded its recommendation on Lamprell to "buy" from "hold", on Monday, after the company announced that it had successfully negotiated new banking facilities, providing security of funding for the business over the medium term. Analysts at Liberum left their price target unchanged at 175 pence per share.

Spotted that earlier Harry, you beat me to it :O) Reduced the Limit Buy on the spreads to 147.0 more in hope than expectation.

Going nowhere during last week despite the market moving higher, the link suggests no shortage of demand for rigs and services. Right in LAMs back yard too. Massive ramp up in oil supply/demand ... ergo MORE RIGS!

Emirates Steel is seeking to cater for the offshore oil and gas sector at a time when Abu Dhabi is looking to offshore production to meet new capacity targets.

link ... http://www.thenational.ae/business/economy/emirates-steel-all-out-to-keep-oil-and-gas-sector-supplied

MACD is looking bullish

Holding strong for a down day, was marked down at the start

StockMarketWire.com
Bank of America Merrill Lynch has downgraded its recommendation on oil services engineering company Lamprell (LON:LAM) to "neutral" from "buy" after lowering its revenue expectations until there is a greater level of clarity over the company's bidding pipeline. The City broker has cut its price objective to 160 pence per share from 180 pence. Separately, Citigroup reiterated its "neutral" recommendation and 160 pence a share price target, in a note to investors on 2nd July.

looks like LAM will be out of favour for a while, still a lot to do to repair the damage done last year.

Update on Refinancing of Debt Facilities

Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, is pleased to announce that, further to its announcement on 17 June 2013 that the Group had received binding commitment letters and agreed heads of terms for the arrangement of a new secured banking facility, it has signed a definitive agreement with the lenders for such facility.

The agreement is subject to certain conditions precedent, which Lamprell anticipates being satisfied in the next few weeks, at which time the new facilities will replace the Group's existing funded facilities.

Commenting on these new facilities, Chairman John Kennedy said:
"Lamprell is delighted with this facility for which our new executive team, led by Jim Moffat, successfully negotiated. We are particularly appreciative of the support and confidence of our banking consortium and will continue to progress and develop our business to realise the growth and profitability objectives capable of the Company."


- Ends -

Looking better.

Breaking out from recent highs

Marked down to 144.50p at 11am is now up on the day to 149p

on breaking 150p then 160 will be the number to look for

Bullish engulfing and a finish above the 50ma - more volume would have been more convincing.

Update on Refinancing of Debt Facilities

Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, is pleased to announce that, further to its announcement on 19 July 2013, the Group has satisfied the conditions for utilisation on its new banking facilities and that Lamprell has now drawn down on these facilities. The agreement remains subject to certain conditions subsequent which Lamprell anticipates being satisfied in the next few weeks.

Notice of Results

Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, will announce its results for the six months ended 30 June 2013 on Thursday 29 August 2013.

sp down 4% @ 134P today on news of replacement CFO

not an entirely fair comment; most stocks across the board are down

cynic yes but not by nearly 5%, replacing a CFO after he has been in the job for a short time has an unsettling effect on the market.

hadn't realised that, for though i watch this one, i don't follow it closely ..... very bad for company image to keep changing key personnel