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Highlights
- FTSE250-listed Wood Group (John) Plc shares were up by over 20%, following the announcement of its business update.
- In 2021, Wood Group Plc undertook a strategic review of its business and has decided to sell its built environment business to deliver the best value for its shareholders.
FTSE250-listed project management and engineering solution provider Wood Group (John) Plc (LON: WG.) shares were up by over 20%, following the announcement of its full-year business update for the financial year ended 31 December 2021.
Full-year result
The company reported revenue of around US$6.4 billion, which dropped by 14% in comparison to last financial year primarily due to a decline in project division business. However, the consulting and operation segment’s revenue rose during the period, helping in offsetting some impact of business decline in project division.
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As a result of good performance throughout the year, the company expects full-year operating profit to be around US$195 million-$205 million. Moreover, the company anticipate the positive momentum to continue in 2022 because of growth in their order book and significant improvement across all business units. The net debt of the company was around US$1.4 billion.
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Strategic Review
In 2021, Wood Group Plc undertook a strategic review of its consulting business and concluded that it would sell its Built Environment business to deliver the best value for its shareholders. A sales agreement regarding the same will be announced in the second quarter of 2022. The consulting business segment will continue to focus on other segments like solutions for carbon capture technologies, hydrogen, and other energy transition resolution for its clients.
Shift towards energy transition projects
The company’s share price saw buying interest from investors as the company could take a leadership position and perform well in decarbonisation and energy transition segment. In the second half of 2021, the company received several contracts, including a large EPC contract from the US-based Renewable Energy Group along with a solar project to power the onshore oil and gas operation for another US-based company.
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In addition, the company is a lead contractor for various decarbonisation projects in the UK. In 2021, it further increased its business presence in the green hydrogen market and became a member of the Hydrogen Council in the UK. Moreover, it plans to accelerate the production of green hydrogen through a partnership with HYGEN Energy for decarbonising transport in the UK.
The company is looking to capture investment opportunities and positive demand trends within the energy transition segment and help its clients in their decarbonisation journey.
Stock Performance
(Image Source: Refinitiv)
Wood Group Plc last close was at GBX 240, up by 20.48%, after announcement of its business update. The current market share of the company stands at £1,378 million as of 13 January 2022.
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