Shares in John Wood Group (WG.) rose strongly after the Aberdeen-based energy services group outstripped profit forecasts and bumped up its annual dividend by a quarter. An encouraging performance from the brownfield engineering segment enabled the group to boost operating profits by over a third to $497m (£323m).
The group has taken steps to insulate its commercial activities in the face of faltering oil prices. Net debt has already been pegged-back and a combination of operating cost reductions and project deferrals are expected to generate savings of around $30m this year. Management also said that it would apply "tougher filters" to potential acquisitions. The strategic focus is now on production-related activity, with customer operating expenses given preference over exposure to the industry's dwindling capital budgets.
Despite the 'hair shirt' approach, John Wood said that near-tern growth potential exists in Middle Eastern and African markets, but management still remains bullish over long-term prospects for its North American shale activities. December's $36m acquisition of US civil constructor Swaggart Brothers is testament to that confidence.
Prior to these figures JPMorgan Cazenove expected adjusted EPS of 80¢ for 2015.
| JOHN WOOD GROUP (WG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 691p | MARKET VALUE: | £2.6bn | |
| TOUCH: | 691-692p | 12-MONTH HIGH: | 825p | LOW: 519p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 675¢* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 4.1 | 128.0 | 32.4 | 11.0 |
| 2011 | 5.7 | 94.9 | 531.0 | 13.5 |
| 2012 | 6.1 | 322.0 | 71.4 | 17.0 |
| 2013 (restated) | 5.8 | 346.8 | 81.4 | 22.0 |
| 2014 | 6.6 | 475.1 | 87.9 | 27.5 |
| % change | +14 | +37 | +8 | +25 |
Ex-div: 9 Apr Payment: 19 May £1 = $1.54. Includes intangible assets of $1.9bn, or 516¢ a share. | ||||
