Wood Group shares fall sharply as boss says FTSE 250 energy services company is taking a more ‘targeted’ approach to growth
- Wood Group shares fell sharply after the FTSE 250-listed company released an update
- The group maintained its guidance for the full year and said trading went as planned
Shares of Wood Group fell sharply after the FTSE 250-listed company said it expects revenue to continue to fall.
The energy engineering and consulting firm said it expects revenue for the first 10 months of the year to be between $5.2 billion and $5.5 billion. billion, about 14% lower than the levels seen during the same period in 2021.
Shares of Wood Group were down 11.48% or 18.30p at 141.10p today, after falling around 30% last year.
Share price swings: Wood Group saw its share price drop more than 11% today in a trading update
But the group stood by its full-year forecast and said trading in the first 10 months of 2022 had been in line with expectations.
It expects its adjusted core earnings to be in the middle of its guidance range of between $370 million and $400 million. This is about 20% less than the previous year.
The company said it saw its bottom line affected by recent currency movements, which hit revenue by $200 million and profit by $10 million.
Group boss Ken Gilmartin said: “We are now taking a more targeted approach to growth, targeting specific priority markets in energy and materials that best match our competitive strengths. This closer focus will help us to ensure growth that is both profitable and sustainable.
“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 and reimbursable work. We have resolved legacy issues and our strong balance sheet will allow us to meet the defined schedule of resulting cash outflows.
“Our strategy will deliver returns for our shareholders and today we set new financial targets, including mid- to high-single-digit EBITDA CAGR growth over the medium term, with momentum building over the over time as our strategy unfolds.
“Most importantly, based on the highly cash-generating nature of our underlying businesses, we expect positive free cash flow (after the impact of legacy cash outflows) from 2024.”
In a business update released ahead of today’s capital markets day, the group outlined its new strategy and medium-term financial targets, with a focus on “attractive end markets where we differentiate ourselves. “. Those markets, the company said, include oil and gas and chemicals, hydrogen and carbon capture, and minerals and life sciences.
The group also said it expects its net debt to fall to between $350 million and $400 million by the end of the year.