Lamprell

HOLD

28/07/2010 Robert Tyerman

Engineering services group Lamprell has won a new $317m (£204m) contract with the National Drilling Company of Abu Dhabi.

The fully-listed company, a leading provider to the oil and gas industry, says the order is to build and supply two jack-up rigs for $158.5m apiece, to be delivered in the second quarter of 2012.

In addition, Lamprell has the prospect of optional equipment orders worth $25.2m. The contract also gives National Drilling the option to order two more rigs, also worth $158.5m each, with the same optional equipment prospects. That could bring the total value to Lamprell of this new Abu Dhabi business to $684.4m (£441m).

The National Drilling order comes a month after Lamprell won a $129m (£83m) wind turbine vessel contract from Bermuda-based Seajacks. Analysts argue this improves prospects for a reinstatement of the company's 40% dividend payout policy and see a 20% pre-tax profits increase to £32.8m this year, with £41.2m on the cards for 2011.

Highlighted by Growth Company Investor at 222.6p in June, Lamprell shares, which have traded between 276.5p and 164.75p over the past year, now stand at 255.3p. Hold on.

Tags: Deals & contracts, Dividend, Full list, Growth Stocks

Sector: Oil Equipment, Services & Distribution

Companies: Lamprell

Market cap: £511m

PE Forecast: 15.4

Share price: 255.3p