Good morning! It's Paul here - bright-eyed & bushy tailed!

I've added 5 companies in the article header above, which have been interesting companies before, and have issued either results or trading updates today. There might be time for 1 or 2 reader requests too.




Lamprell (LON:LAM)

Share price: 63.4p (down 9.5% today)
No. shares: 341.7m
Market cap: £216.6m

(at the time of writing, I hold a long position in this share)

Project update (profit warning)

Lamprell plc is a United Kingdom-based provider of fabrication, engineering and contracting services to the offshore and onshore oil and gas, and renewable energy industries.


The company really should have entitled this announcement as a trading update. By giving it the apparently harmless title "project update", this announcement didn't appear in the "results & trading updates"  categorisation used by investegate. It's actually a profit warning;

... While we expect revenue for FY2017 to be in line with current guidance, we now expect earnings and EBITDA to be materially below current market expectations.


The problems seem to be relating to one particular project;

Lamprell provides an update in relation to the East Anglia One offshore windfarm project. As announced previously, there were start-up costs and inefficiencies in relation to the project and the learning curve has proven to be steeper than anticipated.

We remain confident of meeting our client's expectations in terms of schedule and quality but we will incur extra costs to achieve this.

As a result, we now expect the project to make a significant loss, which will be booked in 2017.


I hate to say it, but that sounds like management shortcomings. Should Lamprell really be undertaking projects where it has to learn on the job?

It sounds like the full financial impact is not fully known yet, which usually means it's likely to be more than expected;

... the Company will be in a position to make an announcement with respect to the financial impact in due course.


My opinion - we might expect this type of profit warning to trigger a 20-30% fall in share price. So why has Lamprell only dropped 9.5% today? It's still early days (I'm writing this at 09:15), so there could be delayed selling yet to happen. However, I think a…

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