Lamprell; Recent New Holding. Trading statement 14/11/13: A recovery play getting underway!

Lamprell (152p and 3% of JIC Portfolio)

I have today bought a new holding in Lamprell. Early adopters of the JohnsInvestmentChronicle website will remember that I held this stock back in 2012 but got out, by the skin of my teeth, just before a profits warning which was the start of a pretty terrible six months or so for the Company. Simply, it got into trouble over a number of oil rig construction contracts which overran both in time and costs.

Since then there have been a number of changes at the Dubai based Company. The first step, in June 2012, was the appointment of a new non-executive chairman, John Kennedy, who brought with him a wealth of relevant experience having previously been executive Chairman of Wellstream Holdings. This was followed by further board changes with both a new Chief Executive and Finance Director, again with impeccable pedigrees, being appointed. The Company took the hit on the chin and eventually worked its way through the loss making contracts whilst putting in place a far more rigorous approach to contract management and costing. It also decided to focus on its core competencies going forward of rig refurbishment and upgrades. The problems of 2012 lead to losses for the year of £68m and the balance sheet took quite a hammering, requiring its bankers to waive certain conditions on its covenants. In August this year it was able to announce that it had “satisfied the conditions for utilisation on its new banking facilities and that it had now drawn down on these facilities”.

It has been a pretty challenging 12 months but it looks to have come out the other side. First half results to 30^th June, issued on August 29^th were ahead of expectations and were accompanied by pretty bullish outlook statements from both the Chairman and Chief Executive; “performance for the full year was expected to be ahead of our expectations” was the best bit!

1H 2013 FINANCIAL RESULTS

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About the Author

Johnrosier

Premium Member

I manage my subscription website  www.JohnsInvestmentChronicle.com in which I show my portfolio and all transactions. I blog within an hour of trading, with an explanation, and send an alert email to all my subscribers. I do not pretend to have all the answers but I hope my portfolio, and the trades, provides food for thought as well as helping those who are new to managing their own portfolios.I think what I do is unique. There are plenty of tipsters out there who will remind you of the good ones and quietly forget the duffers; I do not have that luxury as the portfolio is there for all to see. I have to confront my mistakes and deal with them. A tipster also does not show how a tip fits into the context of an overall portfolio. My portfolio of up to 30 holdings has different holding sizes based on my conviction behind the stock and its risk. I set up www.JohnsInvestmentChronicle.com in January 2012. Prior to that :In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience.  more »

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johnrosier

14th Nov '13

Lamprell (159p and 3.1% of JIC); It has issued a trading statement covering the period from 1st July to 13th November. It says that trading is in line with expectations, the outlook statement is confident and it says it has a good pipeline of new business.

Conclusion: An in-line trading statement from Lamprell is in itself reassuring given the disappointments of 2012 and that it is still on a recovery course. I wrote the shares up when I bought the holding on 21st October; Nothing has changed; Happy Holder!

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