Lamprell: is it a potential net current asset value investment?

PUBLISHED: Dec 14 2016 @ 06:06 | Comments (0) |

In October I mentioned that I was going to examine Lamprell (LSE:LAM) to see if its share price had fallen below its net current asset value per share and it met the other criteria for NCAV investment.

Back then the share was quoted at 73p, giving a market capitalisation of £250m. A quick, rather crude, net current asset value, calculation gave me a figure of US$346m or £274m.

It also had a good profits after tax history:

Half year to June 2016: loss $4.4m

2015: $65m

2014: $118m

2013: $36m

2012: loss $110m

2011: $63m

2010: $65m

2009: $28m

I shouldn’t dally

In the time it’s taken for me to get on with the analysis the share price has risen to 98p for a MCap of £335m, a 34% rise in less than two months. Congratulations to those who followed up my flagging of this one, got off their back-sides, went ahead with the analysis, and actually bought back then.

The questions now are:
•Is it currently a NCAV investment with the requisite margin of safety?
•If not, what price limit should I set while it sits on my watch-list?

Net current asset value

$m	Dec 2014 (crude measure)	Dec 2015 (crude measure)	June 2016 (crude measure)	June 2016 after one-third of inventories and one-fifth of receivables deducted
Non-current trade and other receivables (advances to suppliers and pre-payments)	12	13	11	9
Non-current cash and bank deposits	13	9	13	13
Inventories	15	29	32	21
Receivables	392	416	412	330
Cash	359	281	208	208
Assets for disposal	15	–	–	–
CURRENT ASSETS	806	748	676	581
Less current liabilities	-365	-294	-240	-240
Less non-current liabilities	-118	-102	-90	-90
NET CURRENT ASSET VALUE	$323m or £256m	$352m or £279m	$346m or £275m	$251m or £199m
NCAV per share (343m shares)	75p	81p	80p	58p

Thus, under both the crude method of NCAV and the margin of safety method this share does not qualify for my NCAV portfolio.

But, another factor that may be……..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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