LONDON (Alliance News) - Lamprell PLC shares dropped heavily in early trade on Monday after the company said that,though it expects its 2014 performance to come in slightly ahead of its expectations, it does not expect this to be repeated in 2015 and said its revenue for the coming year will be about 10% lower than the market view.
Lamprell said 2014 had been an "exceptionally strong" year for the company, meaning it expects to slightly beat its expectations for the year, but it said this will not be replicated in 2014 owing to projects being at different stages of their construction cycles and a weaker market environment.
The oil and gas services company said that though the volume of 2015 revenue secured by the end of 2014 was in line with seasonal trends, it anticipates that securing the remaining revenue volume in 2015 to meet market guidance will be challenging in the current environment.
As a result, it expects its revenue for 2015 to be around 10% lower than current market expectations. It anticipates its financial performance will be below market expectations by a similar amount, with a heavy weighting to the second half of the year owing to the phasing of the construction cycle.
The company said it will take actions to mitigate the anticipated revenue weakness and would provide a further update on this when it releases its full-year results for the year to December 31 on March 19.
"With the recent slump in the oil price, winning work in 2015 is going to be a challenge as the industry adjusts to the new realities. We are entering this period in a position of relative strength with a strong balance sheet and a high backlog. We will continue to focus on maintaining our competitive position in the sector," said Jim Moffat, Chief Executive Officer of Lamprell.
Shares in the company were down 11% to 100.00 pence in early trade on Monday, one of the worst performers in the FTSE All-Share. The stock hit a new 52-week low of 95.81p at the open.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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