FTSE 250-listed Wood Group shares fall sharply

Shares of Wood Group fell sharply after the FTSE 250-listed company said it expects sales to continue to fall.

The energy industry engineering and consulting firm said it expects revenues for the first 10 months of the year to be between $5.2 billion and $5.5 billion, which is about 14 percent lower than the level of the same period in 2021.

Wood Group shares were down 11.48 percent or 18.30 pence today to 141.10 pence, after dropping about 30 percent over the past year.

But the group maintained its full-year expectations, saying trading in the first 10 months of 2022 was in line with expectations.

It expects its adjusted core earnings to be around the middle of its target range of $370 million to $400 million. That is about 20 percent less than last year.

The company said it had impacted its operating results due to recent exchange rate fluctuations, which reduced sales by $200 million and profits by $10 million.

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

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

“Our strategy will deliver returns to our shareholders and today we set new financial goals, including growing EBITDA at mid- to high-single-digit CAGR over the medium term, building momentum over time as our strategy delivers results. books.

“Most importantly, based on the highly cash-generating nature of our underlying business, we expect positive free cash flow from 2024 (after the impact of old cash outflows).”

In a trading update 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.” Such markets, the company said, include Oil & Gas and Chemicals, Hydrogen and Carbon Capture and Minerals and Life Sciences.

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