Lamprell blow from overruns on wind farms
LAMPRELL shares were yesterday blown off course after the specialist engineer was forced to take hefty provisions to cover cost overruns in the wind farm industry.
The shares fell 39½p to 224½p as the company, which makes rigs and boats for the offshore energy industry, said it would have to take a $14.3million (£9.3million) hit in three projects to supply liftboats to wind farms.
The liftboats are used to help install wind turbines. Lamprell said the problem stemmed from incurring higher than-expected labour, material and sub-contracting costs on meeting the contracts, all of which are on a fixed price.
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It discovered the cost overruns “having substantially completed the detailed design phase” of the projects. It said the vessels would be delivered on time next year.
This provision will cause a blow to investor confidence
The share fall came despite Lamprell saying earnings for the full year would be in line with City forecasts, helped by the release of contingency funds.
“This provision will cause a blow to investor confidence,” Brewin Dolphin analyst Greig Aitken said, but added the contracts were signed in a competitive environment.
