Oil and gas engineering specialist John Wood benefited from the increase in pipeline and undersea engineering work, along with rapid growth in US shale gas regions, to post a 55 per cent rise in half-year operating profits to $166m (£105m). The increasing uncertainty in global markets and volatile commodity prices have had no discernible impact on order intake and management is sticking with its forecast that cash profits will rise by 30 per cent this year.
Acquisitions boosted support services division Wood Group PSN, with sales rising 37 per cent to $1.77bn and underlying operating profits 38 per cent ahead at $90m. However, losses in Oman continued to hold the division back and, after adjusting for acquisitions, a 7 per cent rise in revenue only managed to lift profits by 3 per cent.
Weakness in downstream projects continued to affect the engineering division because of lower capital expenditure in the US; however, the division still benefited from a range of sub-sea and pipeline projects and overall sales rose 27 per cent to $872m, with higher volumes and better pricing boosting operating profits by 44 per cent to $104m. The Wood Group GTS business, which sells aftermarket services to energy providers, was helped by maturing contracts to deliver sales growth of 46 per cent to $700m and profits 69 per cent higher at $38m.
Broker Investec Securities forecasts pre-tax profits for 2012 of $369m, giving EPS of 85.9¢ (from $254m and EPS 60.2¢ in 2011).
JOHN WOOD GROUP (WG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 823p | MARKET VALUE: | £3.06bn | |
| TOUCH: | 822-824p | 12-MONTH HIGH: | 847p | LOW: 461p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 557¢* | NET DEBT: | 5% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 2.47 | 56.8 | 444 | 3.9 |
| 2012 | 3.35 | 151 | 33.9 | 5.7 |
| % change | +36 | +166 | -92 | +46 |
Ex-div: 29 Aug Payment: 28 Sep *Includes intangible assets of $1.6bn, or 432¢ a share £=$1.57 | ||||
