Companies: LAM   

Offshore oil services specialist Lamprell expects 2006 results ‘will comfortably exceed’ market hopes and has won £27.5 million of new orders.

In an optimistic trading update, United Arab Emirates-based Lamprell, which lifted operating profits fivefold to £15.5 million between 2003 and 2005, said last year’s results should easily outstrip current City estimates. House broker J.P. Morgan Cazenove, which brought the company to AIM in October with a £229.5 million placing at 195p, has upgraded its 2006 earnings forecast by nine per cent to 26.3 cents (13.15p) a share.

That represents an 83 per cent earnings increase over 2005 on revenues now estimated by the broker to exceed $322 million (£160 million). Lamprill upgrades and refurbishes offshore jack-up rigs and builds floating production, storage and offloading (FPSO) systems, as well as upgrading and refurbishing land rigs. Last year’s strong growth suggests the company has managed to overcome feared capacity constraints at its facilities in Sharjah and Dubai.

Chairman and chief executive officer Philip Whitbread said Lamprell has ‘improved its market position and gained new clients across all core activities’. He said prospects have been improved by new orders, a $30.3 million (£15.15 million) contract to build six ‘process modules’ for Italian group Saipem and a $24.8 million (£12.4 million) process module and turntable/manifold order from Single Buoy Moorings Inc.

Lamprell shares, which hit 245p earlier this month, were 3.5p off this morning at 230p, against a background of current relative oil price weakness, valuing the company at £460 million. The strong order position in a business working with long lead times implies further improvement could be resumed.

Lamprell	LSE	£180.25m	90.00p	1.00p
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