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FTSE 250-listed Wood Group shares fall sharply

Wood Group shares fall sharply as boss says FTSE 250 energy services firm is adopting a more ‘focused’ approach to growth

  • Wood Group shares fell sharply after the FTSE 250-listed firm posted an update 
  • The group held its full-year guidance and said trading had been as expected 

Wood Group shares fell sharply after the FTSE 250-listed company said it expects its revenue to continue falling.

The energy industry engineering and consulting business said it expects revenue for the first 10 months of the year to come in at between $5.2billion and $5.5billion, which is around 14 per cent lower than levels seen over the same period in 2021. 

Wood Group shares were down 11.48 per cent or 18.30p to 141.10p today, having fallen by around 30 per cent in the last year.  

Share price shifts: Wood Group saw its share price fall over 11% today amid a trading update 

But, the group held its full-year guidance and said trading in the first 10 months of 2022 had been in line with expectations.

It expects its adjusted core earnings to come in around the middle of its guidance range of between $370million to $400million. This is about 20 per cent lower than the previous year. 

The company said it had seen its bottom line affected by recent exchange rate movements, which hit revenue by $200million and earnings by $10million.

Ken Gilmartin, the group’s boss, said: ‘We are now taking a more focused approach to growth, targeting specific priority markets across energy and materials that best match our competitive strengths. This tighter focus will help ensure we can grow both profitably and sustainably.

‘Our turnaround is progressing well, accelerated by the sale of Built Environment Consulting and helped by the work done to focus the Group on lower risk, reimbursable work. We have addressed legacy issues and our strong balance sheet will allow us to deal with the defined schedule of resulting cash outflows.

‘Our strategy will deliver returns for our shareholders and today we have set out new financial targets, including to grow EBITDA by mid to high single digit CAGR over the medium term, with momentum building over time as our strategy delivers. 

‘Most importantly, based on the highly cash generative nature of our underlying businesses, we expect positive free cash flow (after the impact of legacy cash outflows) from 2024 onwards.’

In a trading update issued ahead of today’s capital markets day, the group outlined its new strategy and medium-term financial targets, flagging a focus on ‘attractive end markets where we are differentiated’. Such markets, the company said, include Oil & Gas and Chemicals, Hydrogen and Carbon Capture and Minerals and Life Sciences.

The group also said it is expecting its net debt to fall to between $350million to $400million by the end of the year. 

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Read more at DailyMail.co.uk



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