Oil and gas engineer Wood Group lifts outlook after new contracts

August 22, 2023 10:22 AM AEST | By PAMEDIA
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Wood Group has upgraded its revenue and profit guidance for the year after it was boosted by new contracts.

Shares in the London-listed oil and gas engineering business climbed higher on Tuesday morning as a result.

It comes months after lengthy and unsuccessful takeover attempts by US private equity firm Apollo.

In May, Apollo abandoned attempts to buy Wood after five takeover approaches were rejected. Its final offer had valued the business as £1.7 billion, or 240p a share.

On Tuesday, Wood provided a positive trading update for investors, reporting that its adjusted core earnings for the year are forecast to be “ahead of our previous expectations”.

It came despite the firm revealing a drop in operating profits over the half-year to June 30 due to costs related to the failed takeover talks and a 20 million dollar (£15.6 million) write-down linked to its power and industrial, engineering, procurement and construction business which was closed last year.

Operating profits had fallen by 26% to 23 million dollars (£18 million) for the period.

Wood also hiked its revenue forecasts for the year, telling shareholders it expects annual revenues of around six billion dollars (£4.7 billion), after previously predicting it would hit 5.7 billion dollars (£4.5 billion).

It had reported a 16.2% increase in revenues to 2.98 billion dollars (£2.3 billion) for the latest six months.

Ken Gilmartin, chief executive officer, said: “When we announced our growth strategy in November last year, we set out a plan for Wood to deliver on its significant potential, and I am delighted that our results show the clear progress we are making.

“We have made a good start to the year, delivering growth in revenue, EBITDA, headcount and our pipeline, all while furthering our inspiring culture.”

Wood Group also announced that chief financial officer David Kemp is to retire from the role, with a process now under way to appoint his successor.

The firm’s shares were up 3.8% in early trading.


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