Wood Group (John) PLC Strategic Review and Trading Update (1643S)
12 November 2021 - 06:00PM
UK Regulatory
TIDMWG.
RNS Number : 1643S
Wood Group (John) PLC
12 November 2021
12(th) November 2021
This announcement contains inside information
John Wood Group PLC ('Wood' or 'the Company')
LEI: 549300PLYY6I10B6S323
Wood initiates strategic review of built environment business
and provides trading update
John Wood Group PLC ('Wood') today announces it has initiated a
strategic review of the part of its Consulting business facing the
built environment end market.
The scope of the review will consider a range of options to best
unlock value from this part of the business for shareholders that
Wood believes is not currently being recognised in its market
capitalisation. It will also assess how best to take advantage of
the positive trends and investment opportunities in energy
transition and industrial decarbonisation where the company is
already a global leader.
The built environment business provides consulting and
engineering solutions that address environmental risks, increase
climate resilience, help to build more sustainable infrastructure
and improve mobility. It operates across government,
transportation, water, industrial, energy and mining markets and
has a track record of attractive growth and resilient performance
through Covid-19. A growing order book and exposure to both
government stimulus for infrastructure development and the drive
for sustainability and climate resilience, most notably in North
America and the UK, positions the business well for future
growth.
In 2021, the part of the business that services the built
environment end market is expected to account for c$1.3bn of gross
revenue within Wood's Consulting business unit. It has
approximately 7,000 professionals, with c6,000 in the US and Canada
and the remainder largely in the UK.
Trading update
The review is taking place against the backdrop of improving
momentum in many of Wood's markets following the challenging market
conditions created by the impact of Covid-19.
Overall, we expect to deliver improved revenue and earnings in
the second half of 2021 relative to H1 2021. While we are seeing
robust activity in Consulting and Operations, the rate of recovery
in Projects has been slower than anticipated largely due to the
deferral of activity and awards into 2022.
We have maintained strength in our order book which is up c18%
at the end of September compared to December 2020, with growth in
Consulting and Operations, and representing a book to bill of 1.3x.
Whilst this also includes improvement in Projects order book, which
is up c3% compared to June 2021, it reflects lower than anticipated
lump sum engineering, procurement and construction (EPC) awards
offset by higher reimbursable project awards. The working capital
impact of lower than anticipated EPC awards together with deferred
activity will result in higher than previously anticipated full
year net debt, which we expect to be broadly in line with H1
2021.
Full year revenue is expected to be approximately $6.4bn.
Adjusted EBITDA margin is expected to be 8.5% to 8.7%.
Our next update is a full year 2021 trading update on 13 January
2022.
Notes:
1. Previous guidance for the full year 2021, as set out in our
Half Year 2021 results issued on 24 August 2021, was for revenue
in the range of $6.6bn to $6.8bn and adjusted EBITDA margin
in the range of 8.7% to 8.9%.
2. Company compiled, publicly available consensus comprises 10
analysts who have published estimates since our Half Year Results
for the period ended 30 June 2021 issued on 24 August 2021.
Consensus includes: JP Morgan Cazenove, Barclays, RBC, Morgan
Stanley, Berenberg, Exane BNP Paribas, Citigroup, HSBC, Kepler
Cheuvreux and Jefferies.
Consensus 2021 revenue is $6.7bn (range: $6.6bn to $6.8bn) and
consensus adjusted EBITDA is $587m (range: $574m-$598m).
(www.woodplc.com/investors/analyst-consensus-and-coverage)
- Ends -
About Wood:
Wood is a global leader in engineering and consultancy across
energy and the built environment, helping to unlock solutions to
some of the world's most critical challenges. We provide
consulting, projects, and operations solutions in more than 60
countries, employing around 40,000 people. www.woodplc.com
For further information:
Wood
Ellie Dixon - Acting President Investor
Relations 01224 851 369
Citigate Dewe Rogerson
Kevin Smith 020 7638 9571
Chris Barrie
Notification authorised by:
Martin J McIntyre
Group General Counsel and Company Secretary
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