Oil rig refurbisher and maker Lamprell (LAM) is in demand as it reports a strong first half will see its 2014 numbers outpace expectations. Shares in the UAE-based company rise 3.2% to 160.5p, bringing its year-to-date advance to 14.4%.
The upward revision to guidance is accompanied by a warning that the year will be first half weighted but today's news is nonetheless a welcome departure for shareholders who have endured several profit warnings in the past.
It follows the delivery of four major projects in the first six months of the year and new orders from Ensco, prospective London float Shelf Drilling and Petrofac (PFC). Two years ago the group warned on profits five times as it ran into serious operational difficulties on a number of fixed-price contracts. It eventually posted a loss of $111 million. An indication that the four key contracts delivered so far this year are running ahead of budgeted margins is therefore particularly encouraging.
The new orders are also worthy of note as Lamprell warned in March revenue growth would elude it in 2014 and 2015 as it worked to rebuild the order book. The company is seeing some benefit from a reduction in overheads and planned productivity improvements.
Today's announcement also reveals that a $120 million rights issue unveiled in May (16 May) has been successfully completed with plans to finalise the refinancing of debt in July.