Have you heard about Wood Group’s recent announcements? Let’s delve into the promising journey of this Scotland-based engineering services leader and what’s in store for them in the future.
Rising Beyond Predictions
Wood Group’s financial trajectory is showing promise. Not only have they improved their year-end outlook, but this came on the back of numerous fresh contracts. Ken Gilmartin, the dynamic CEO, has dropped hints that such victories aren’t going to stop any time soon.
Witnessing their shares in the FTSE 250 group take an upward curve, Wood revealed they’re setting the bar higher than before. With a vision of reaching the $6 billion mark in annual revenues, they’re surpassing their initial projection of $5.7 billion. And mind you, they’re only eight months into a three-year growth journey.
However, every success story has its challenges. Wood Group faced a dip in their H1 operating profits, thanks to challenges like Apollo Global Management’s unsuccessful takeover bid and the $20m setback due to the shutdown of a division.
Yet, Gilmartin remains upbeat: “Our core strength lies in leveraging our current position. Our trading performance is indicative of the positive momentum we’re building.”
Watch Out for More Victories
Gilmartin subtly added, “Though we might not openly discuss all our achievements, rest assured, we’re securing more work. Keep an eye on us, because our growth story is unfolding in the right markets.”
A noteworthy mention is Wood’s past interactions with Apollo, a US-based private equity group. After a series of negotiations, Apollo withdrew its final offer which was pitched at £1.7 billion.
An exciting segment of Wood’s operations is their projects division, which recently saw a 29.6% leap in sales, reaching $1.25 billion in just six months. This was propelled by demands from the chemicals and oil and gas realms. Yet, the highlight was their contracts with Euro Manganese and GSK, amassing roughly $50m.
Venturing beyond their comfort zone, Wood is steering towards “sustainable” projects, aiming to shift from their conventional oil and gas base. Currently, they’re competing for contracts in innovative arenas like biofuels, carbon capture, and blue hydrogen.
Analysts Weigh In
Alex Smith, a reputed analyst from Investec, pointed out Wood’s remarkable performance in the past year, praising their “solid momentum.”
Highlighting their achievements, Smith remarked, “Wood’s evident progress since their growth strategy’s revelation last November is commendable. Their success in securing pivotal contracts in primary growth sectors underscores their potential.”
Echoing this sentiment, Gilmartin shared his optimism about Wood’s future: “Last year, when we unveiled our growth strategy, we envisioned Wood’s vast potential. I’m thrilled that our outcomes validate our progress. As we gaze forward, our strategic actions, revamped business model, and aligned market growth prospects fuel the momentum we’re crafting.”
A New Financial Guardian on the Horizon?
In another crucial update, David Kemp, Wood’s chief financial officer, is gearing up for retirement. The search for someone to fill his esteemed shoes is in full swing. Meanwhile, Wood’s shares ended on a promising note, marking 154.2p.
Stay tuned, as the Wood Group continues its ascent in the market, promising bigger things in the pipeline.