Wood Group shares plunge sharply after Wood Group boss claims that FTSE 250 energy services company is taking a more focused’ approach towards growth
- Wood Group shares dropped sharply following an update from FTSE 250-listed firm.
- The group released its full-year guidance, and stated that trading was as normal.
Wood Group shares dropped sharply after the FTSE 250 listed company said that it expects its revenues to continue falling.
According to the energy industry consulting and engineering business, revenue for the first ten months of 2019 will be between $5.2billion – $5.5billion. This is approximately 14 percent less than the levels 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.
Wood Group shares fall: Today’s trading update saw Wood Group’s share price drop by more than 11%
The group, however, maintained its full year guidance and stated that trading in 2022’s first 10 months was in line.
It expects that its adjusted core earnings will be in the middle of its guidance range, which is between $370million and $400million. This is 20% less than in the previous year.
According to the company, recent fluctuations in exchange rates had affected its bottom line. They reduced revenue by $200million and increased earnings by $10million.
Ken Gilmartin is the boss of the group. He stated that he now has a more focused approach for growth and targets specific markets in energy and materials to best reflect his competitive strengths. This will allow us to grow sustainably and profitably.
“Our turnaround is well underway, accelerated by the selling of Built Environment Consulting and assisted by the work done in focusing the Group on lower-risk, reimbursable, work. We have dealt with legacy issues, and our solid balance sheet will allow for the foreseeable cash outflows.
“Our strategy will bring returns to our shareholders. We have today set financial targets, including to increase EBITDA at a high single-digit CAGR in the medium term. This will allow momentum to build over time as our strategy delivers.
“Most importantly, based in the highly cash-generative nature our underlying businesses we expect positive cash flow (after the effect of legacy cash flows) from 2024.
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.