Apparently, this thread didn’t yet have Lamor’s CEO’s visit to Sami Miettinen’s neuvottelija (negotiator) podcast from last April, if you’re interested in listening.
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The Financial Supervisory Authority has approved Lamor’s prospectus for the listing.
The prospectus has been published on Lamor’s website →
In Lamor’s offering, the subscription amount in the public offering is a minimum of 150 and a maximum of 25,000 shares. The subscription price in the public offering is EUR 4.83/share, meaning the minimum subscription is EUR 724.50.
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A lot to read, but it looks quite promising. Expensive with this year’s orders, but next year already has quite a few orders materializing?
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Revenue growth has been weak; I suspect the current boost is temporary, and I doubt that costs will scale with growth. It’s an interesting company, but the financial side makes me hesitant. I’ll pass.
It’s good to remember that Lamor is not a SaaS/tech company, so the scalability of sales/revenue is not as dramatic, because the core business itself requires equipment to clean oil from the sea, and funding is now being sought for this. Lamor has also only been operating under its current management since 2019, so in my opinion, it’s not realistic to expect exponential growth with this kind of business model after two years of operations.
I’m going to watch the company presentation today, and unless anything truly concerning comes up, I will subscribe to the offering because it’s a really important business for the environment as well 
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Right. There are positives, but as stated earlier, revenue has shrunk from 5 years ago. Secondly, I suspect this will also be left oversubscribed by 50-60 units.
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I’m repeating a bit of what has already been mentioned here. So, is the 247 million euro order book mentioned in the prospectus based on already signed contracts? If this is accurate, then the situation is pretty clear. You won’t find order books this large, 10 times the revenue, anywhere else. I must say, I am very positively surprised by Lamor’s extensive international networking. In addition to oil spill response, plastic waste collection systems in river environments will surely act as a growth driver. There are also pilot projects underway in six countries for those. Business Finland has chosen them as the winners of the growth engine competition in 2020…
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Also of concern was the fragmentation of the segment; machine cleaning, etc., are grouped together. How large is the Lamor segment there? And I suspect that after next year, the company’s revenue will return to normal. I’ll pass, because better opportunities are coming for me soon. Otherwise, I probably would have been in.
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Marked a small position. It would be interesting to know if there has been demand? I guess that can’t be seen anywhere in real time.
The biggest risk for Lamor lies in the successful execution of projects, both operationally and financially.
The company itself wants to see itself as a “solution xxxx” provider, but these large deals are still purely projects and are partially predictable, but far from completely so. This is because there are countless variables involved in such large-scale projects, which are never entirely repeatable.
I have been involved in fairly large “turnkey” deliveries for a long time in the cruise ship industry, and the first vessel in a series or an individual vessel always poses a huge operational and financial risk to successfully complete the project as desired. Many things evolve right up to the handover, and getting additional work remunerations approved is extremely difficult…
Another significant risk is the leap in projects to a completely different operational and financial level. The controller needs to be vigilant with cash flows to avoid stumbling due to a lack of working capital if surprises arise in a project.
If everything goes well, the returns can be good, and the company will continue to have the opportunity to grow with larger projects. The basic old business model is unlikely to be able to grow at all compared to these large projects.
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Lamor’s goal is to transform from a equipment supplier to a provider of services and comprehensive solutions.
→ Brochure, p. 49:
The business transformation process is thus underway, and challenges may arise. Sometimes, equipment manufacturers have faced issues where an expanded service offering has led to increased costs, but revenues have not risen proportionally to the investments.
Lamor is also moving towards implementing larger projects. Managing large-scale projects can be more challenging. A highly profitable project can turn otherwise if project management and pricing fail.
- According to the brochure (p. 11), Lamor primarily uses project-specific agreements with subcontractors, which are made at the start of each project.
- For example, in the 2019 financial year, Lamor mentions (brochure, p. 105) that the Ecuador service project was “very profitable.”
- Lamor succeeded in increasing its operating profit in the 2019 financial year (brochure, p. 107) by enhancing its operational efficiency. The company did not participate in projects where “margins were lower than usual” and managed to reduce general business expenses.
However, Lamor states that the company possesses strong internal project management capabilities. → Brochure p. 102:
Perhaps these examples of individual projects can provide some insight.
Among Lamor’s previous projects, the brochure mentions, for example, the oil spill response project in Peru. → Brochure p. 67
- This short film tells about Lamor’s oil cleanup efforts in Peru, including the remediation of contaminated soil and the treatment of oily waste. (Video published on June 3, 2016)
- Lamor has been supplying oil spill response equipment to Peru since the 1990s. The subsidiary Lamor Peru was established in 2013. In 2014 and 2016, major oil spills occurred in oil company Petroperú’s pipelines in Peru.
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Current thoughts on the IPOs of Lamor and Digital Workforce:
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Here is a recording of today’s company presentation:
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In the company presentation’s Q&A section, I felt it became apparent that the strategy might be a bit lost. Are they just dabbling and trying everything? Hopefully, they maintain focus.
The 130M valuation level is concerning, even though they have a good number of orders in the pipeline.
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In addition to the normal business and pricing related aspects, one can ponder the duration of the public offering. The terms of the offering do not specify discontinuation due to oversubscription. In practice, all offerings recently have been heavily oversubscribed and discontinued at the earliest possible time. Since there seems to be no possibility of discontinuation, the situation could be that shares are available for one or two euros, which again makes no sense from an investment perspective.
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The marketing brochure states:
“The subscription period for the public offering begins on November 25, 2021, at 10:00 AM and is estimated to end on December 2, 2021, at 4:00 PM.”
I haven’t seen the word “estimated” anywhere else. Is it possible that this will be interrupted earlier?
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It’s not being discontinued; that was mentioned multiple times in the company presentation.
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Now there’s no time to watch the presentation. Did it become clearer whether Lamor really has an order backlog of over 200 million euros in the pipeline?
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At 38 minutes into the recording, Lamor’s order book is discussed, including orders from Saudi Arabia and Kuwait.
Lamor’s order book on September 30, 2021, was EUR 228.0 million, of which:
- EUR 20 million for the rest of the year (October 1, 2021 - December 31, 2021)
- EUR 76 million for 2022
- EUR 132 million for financial years from 2023 onwards.
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@Omavaraisuushaaste has also made their own analysis of Lamor’s offering:
Let’s spoil the summary a bit:
Lamor’s share offering is an opportunity to be part of a rare business that is nonetheless globally immense in size. The story is credible, and growth in both revenue and operating profit is very realistic to expect even in the short term. At the same time, however, I still want to remind you that we are currently still living in peak stock market times. The market is still extremely hot right now, and every IPO currently has a bit of air (just like stock prices in general).
Lamor’s offering is therefore by no means cheap, but reasonably priced compared to future promises, so I see it as a potential investment target for both quick profits and the long term. The company is on the verge of something new, which of course increases the company’s risk because growth strategies always increase risks - no matter how large the ready order book.
It is also good to remember with Lamor that companies whose markets are difficult to enter often command a slightly higher price tag simply because the business risk is smaller than that of ordinary cyclical companies. At the same time, Lamor is also a so-called “safe” growth company, which reduces its risk compared to ordinary story-based growth companies.
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