Wood Group publishes upbeat trading update after rebuffing bid
Wood Group has today published an upbeat trading update for the quarter ended 31 March 2024, hours after it emerged the company had rejected a bid from Dubai-based rival, Sidara.
The Aberdeen-based company said its adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) for the period grew four per cent helped by “margin expansion across all of our business units offsetting lower revenue.”
Revenue fell six per cent to $1.36bn (£1.1bn). Wood said this reflected lower project revenue and in line with its strategic shift.
At the end of March, the company’s order book stood at $6.2bn (£5bn). Wood added that it expected to report high single digit growth in adjusted EBITDA, before the impact of disposals for 2024 with performance weighted to the second half of the year.
Ken Gilmartin, CEO, said: “We are now in the second year of our growth strategy and are making good progress, with EBITDA growth, margin expansion and an order book nine per cent higher than a year ago. We continue to win exciting and complex work across energy and materials, with sustainable solutions representing 40 per cent of our pipeline.
“We are progressing with our Simplification programme and have made some significant appointments this year including welcoming Arvind Balan as our new CFO. I am proud of the strong leadership team we have in place and confident that we will deliver on our significant potential,” Gilmartin added.
Wood Group published the trading update after it emerged the group had reduced a bid, which had valued the business at £1.4bn.
The company said it had received an offer for 205p per share, but had unanimously rebuffed the offer.
Wood Group said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects.”
It’s the second time in around a year the company has been subject to a takeover approach. At the beginning of March US-based private equity firm Apollo Global Management abandoned a 240p-a-share bid for Wood after multiple attempts and offers.
Both offers have valued the group far below the 600p per share level it was trading at before the pandemic.
The company said its growth is expected to continue into 2025 and it would “deliver significant free cash flow” over the coming years.