30 Jun 2014 07:00
30 June 2014
LAMPRELL PLC("Lamprell" and with its subsidiaries the "Group")
PRE-CLOSE TRADING STATEMENT
Lamprell (ticker: LAM), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, issues the following pre-close trading update for the six months to 30 June 2014.
The Group has seen strong operational and financial performance since the start of 2014 with the delivery of four major projects in H1. The Company has also been successful in converting its bid pipeline with two rig orders from Ensco and Shelf Drilling respectively and the recent contract award from Petrofac for modules to be deployed in Abu Dhabi.
Operational performance is being driven by a number of factors, notably the strong project execution in all four of the major projects delivered in H1 2014, which has resulted in those projects being delivered ahead of budgeted margins. This has also been supported by some early savings from productivity improvements being implemented across the Group. As announced previously, we expect to start seeing the benefits from these initiatives during the course of 2014 although the full run rate is not anticipated to be achieved until late 2015. We have also seen improved performance in 1H 2014 in our land rig services business.
In addition to this strong operational performance, we have taken steps to reduce our overheads following the delivery of the four major projects earlier this year and we continue to look for opportunities to reduce them further.
During the period, the Group has successfully completed the Rights Issue announced on 16 May 2014, and expects to complete the associated debt refinancing during the course of July.
As a result of the above, the Company now expects earnings for the year as a whole to be ahead of expectations although this will be heavily weighted towards the first half of the year. Our bid pipeline remains strong and we remain focused on the conversion of our pipeline of opportunities into further contract wins.
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