Wood Group shares tumble after $38m sale of non-core business Terra Nova

Shares in energy services firm Wood Group have tumbled five per cent after it agreed to sell one of its non-core businesses for $38m (£28.8m).

The FTSE 250 giant confirmed the sale of conveyor systems business Terra Nova Technologies to engineering group Murray & Roberts.

Read more: Wood Group slashes losses as merger drives contract wins

The sale was part of a deleveraging programme, which earlier this month Wood Group said would be more than gradual than anticipated.

Shares fell 5.5 per cent following the announcement of the sale to 515p.

Chief financial officer David Kemp said: “Wood’s strategy going forward is to focus on asset light solutions rather than manufacture and fabrication equipment.

“The disposal makes a good contribution to our non-core asset disposal programme, which is a key element of our deleveraging plan.”

Last week the company said it narrowed losses and boosted revenues in 2018 following its takeover of engineering firm Amec Foster Wheeler.

Revenue soared 79 per cent to $11bn for the year and losses were $7.6m – down from $30m the year before as it beat market expectations.

Wood said it had secured contracts worth more than $600m as a result of the deal, up from its previous estimate of $500m.

The company said “well-aligned operational cultures” had allowed the merger to complete ahead of schedule in 12 months.

Read more: Wood Group warns of impact of future oil market volatility

Wood said it is well positioned for growth trends in the energy and industrial markets in 2019, but it warned there had been a slower recovery in the oil and gas sectors.

But shares dropped eight per cent as it warned its debt-cutting plan would be slower than anticipated.