Napoleon wanted lucky generals, and two bosses at oil rig contractor Lamprell would certainly fit the bill.
The company has just issued a profit warning which has seen its shares slump nearly 60%, down 167.1p to 127.7p. But less than two weeks ago integration and development director Scott Doak sold 200,000 shares at 363.693p while vice president Kevin Isles sold 250,000 shares at 361.70p.
In an emergency trading statement brought forward from tomorrow, the company said delays in delivering equipment and the award of new contracts, along with increased costs relating to windfarm installation vessels, meant it would make a small loss in the first half of the year.
It said full year revenues would be in line with last year at $1.1bn with a profit margin of 3.5%, well below the board's expectations. As a result it is reviewing its cost base.
Analyst Keith Morris at Investec said:
Lamprell has pre-empted its interim management statement with a severe profit warning for 2012 based on delays, under-utilisation of resources and further costs on the wind farm vessels. Full year profits are now likely to be around $38m-$40m rather than our previous forecast of $117m. We cut to hold (from buy) with a new target price of 200p (was 450p) based on 10 times our new 2013 estimated forecast.
We expect a substantial discount to the sector will persist until investor confidence is rebuilt and the company loses its "accident prone" reputation.
