Lamprell shares plunge after it warns over looming losses
OIL rig maker Lamprell yesterday saw its stock plummet after it warned that it was heading for a first half loss triggered by delays in obtaining key equipment.
The bleak outlook sent investors running for cover with shares diving by more than 60 per cent after the emergency announcement.
The blow came two weeks after the firm’s integration and development director Scott Doak sold 200,000 shares at 363.693p while vice president Kevin Isles sold 250,000 shares at 361.70p.
FTSE 250-listed Lamprell blamed global problems in getting specialised machinery for the unexpected change in outlook which raised the alarm over falling revenues.
Another problem highlighted by the company was the delivery of two windfarm vessels to a project. Lamprell downgraded its profit margin expectation for 2012 to 3.5 per cent, which it said was considerably behind its original view, but added that it expected a recovery in profit in the second half of the year as the supply issues ease.
It said in a statement: “It is anticipated that the delay in revenue generation together with the additional costs will result in the group incurring a small loss.”
The downbeat outlook was in contrast to positive guidance outlined by the group six weeks ago in March, when it predicted continued growth.
Analyst Keith Morris at Investec said full year profits are now likely to be around $38m (£23.8m) to $40m rather than a previous forecast of $117m.
Oriel Securities analyst David Round said Lamprell appeared to be downgrading 2012 expectations by around 60 per cent and added that he was putting his “buy” recommendation under review.
The Group’s net debt at 14 May was $173m – representing an increase of $71m since the end of last year. It said it had an order book of $1.5bn up until the first quarter of 2015 and that its margins would recover by 2013.
Lamprell’s shares closed 56.9 per cent lower at 127p.