Companies: LAM   

Specialist engineering group Lamprell moves from AIM to the main market on Thursday amid concerns over some customers’ finances.

Domiciled in the Isle of Man and operating from its base in the United Arab Emirates, the company, which carries out work for the international oil and gas industry, increased profits 33 per cent to $48 million (£30 million) in the first half-year on turnover up 29 per cent to $318 million. Lamprell has won some hefty orders, including a £102 million contract with international drill rig concern BassDrill, and ended August with an $818 million order book.

However, the company, whose chief operating officer David Moran is leaving the board to become head of corporate communications, says it is aware that ‘industry participants, which may include customers, suppliers and contractors of Lamprell’, are seeking new financing or negotiating existing bank facilities.

Lamprell’s directors have been talking to customers ‘to mitigate the potential risk of bad debts or funding issues’ and the company says customers have ‘expressed confidence in their ability to obtain financing for existing projects’.

Chief executive officer Peter Whibread cites a new $14.8 million contract with Ensco Oceanics to upgrade the Ensco 53 rig in Sharjah and the company’s expansion into Thailand as encouraging pointers to the future, even ‘at a time of market uncertainty’.

Lamprell shares crashed from 575p to 120p between June and October, but have now rallied somewhat to 186.5p, up 24.25p this morning, at which level they value the company at an undemanding £373.5 million.

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Lamprell	LSE	£236.83m	118.25p	-5.50p
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