LONDON -- Lamprell
The engineering services contractor admitted project delays and additional costs will mean the group's loss for the year is to be "significantly greater than previously expected."
During August, Lamprell's half-year results showed a $47 million loss and indicated full-year losses would be between $12 million and $17 million.
Lamprell also confirmed today that it remained in discussions with its lending banks regarding covenants. The firm also said it was confident of having "sufficient cash flow to fund its ongoing activities and debt repayments."
Furthermore, Lamprell said senior management changes would now be required and the firm has appointed external advisors to assess the "full extent" of the problems.
John Kennedy, Lamprell's chairman, commented:
Lamprell's position in the refurbishment market remains pre-eminent. After three months with the company, I believe the fundamentals of the business continue to be sound and the order book and new contract pipeline remain strong. However, I am extremely disappointed in the need to make this latest trading update and feel that a refreshed management team will bring a more focused sense of delivery to all our stakeholders.
Today's statement follows an update in July, when Lamprell first claimed "a further review of its financial position" had unearthed additional costs relating to project delays.
That update in turn followed a botched profit alert in June, when Lamprell issued bad news through an AGM statement released five minutes after the market had closed.
And the AGM fiasco was preceded by a controversial profit warning in May, which saw two senior managers sell shares around 360 pence to raise a total of 1.6 million pounds just two weeks before.
With Lamprell's shares down a thumping 81% since their May peak, clearly the business has its problems. Certainly in today's knife-edge market, smaller companies can be punished severely if they hit trouble.
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