Rig builder Lamprell to cut costs further, shares jump

(Reuters) - Oil-rig builder Lamprell Plc (LAM.L) said it was implementing further cost reductions in the face of contract cancellations, pushing its shares up more than 10 percent.

Shares in the company rose as much as 10.7 percent to 62 pence on Thursday morning on the London Stock Exchange, earning a spot among the largest gainers on the FTSE small-cap index (.FTSC).

Oil services and equipment companies have suffered from contract cancellations as explorers and producers fetched lower prices since the fall in oil prices in mid-2014.

The company, which mainly focuses on contracts around the United Arab Emirates, said in April that it had cut about 10 percent of its workforce in light of challenging market conditions.

On Thursday, Lamprell said it would take on further cost-reduction activities to address an expected fall in revenue for 2016 and 2017.

The rig-builder said it expected 2017 revenue to be between $400-$500 million, depending on how the bids that it submitted are awarded going forward.

For the six months ended June 30, the company reported revenue of $451.3 million, up 28.4 percent from a year earlier.

(Reporting by Sanjeeban Sarkar and Pranav Kiran in Bengaluru; Editing by Amrutha Gayathri and Sunil Nair)