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(Alliance News) - John Wood Group PLC on Thursday reported a drop in its quarterly sales, but maintained an upbeat outlook.
The Aberdeen, Scotland-based consulting and engineering for energy and materials sectors said revenue in the first quarter of 2024 was USD1.36 billion, down 6.8% from USD1.46 billion the year before.
This was because Projects revenue fell by 15%. In addition, John Wood said that the unit's order book was lower than a year ago. In addition, Investment Services revenue was down 32% due to the expected run-down of activity in its facilities business.
Group adjusted earnings before interest, tax, depreciation and amortisation were up 4% with margin expansion across all of its business units offsetting lower revenue, John Wood said.
It added that its order book at March 31 was USD6.2 billion, up from USD5.7 billion a year ago.
Looking ahead, the company said it continues to expect high single digit growth in adjusted Ebitda before the impact of disposals. Performance will be weighted to the second half, reflecting the typical seasonality of the business, it added. Operating cash flow performance is also expected to continue to improve, partly through improved cash management.
As for 2025, John Wood continues to expect its Ebitda to exceed its medium-term target.
Chief Executive Officer Ken Gilmartin 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 9% higher than a year ago. We continue to win exciting and complex work across energy and materials, with sustainable solutions representing 40% 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. We are today reiterating our Ebitda guidance for 2024 and our outlook for 2025".
John Wood on Wednesday said it had received an "unsolicited, preliminary and conditional" proposal from Sidara, regarding a possible cash offer.
The proposal valued each John Wood share at 205 pence each, the entire share capital at GBP1.41 billion.
John Wood concluded that it "fundamentally undervalued Wood and its future prospects," and rejected the proposal unanimously.
Sidara has until June 5 to either announce a firm intention to make an offer for Wood or withdraw its approach.
Sidara later on Wednesday said it is "considering its next steps" after John Wood rejected the takeover approach.
Sidara is the trading name of Dar Al-Handasah Consultants Shair and Partners Holdings Ltd, a planning, design, engineering and project management firm, founded in Beirut, with more than 300 offices in 60 countries.
Sidara said further announcements will be made in due course, but there can be no certainty that an offer will ultimately be made.
Shares in John Wood were down 0.3% at 192.30p each in London on Wednesday afternoon, giving it a market capitalisation of GBP1.34 billion.
By Sabrina Penty, Alliance News reporter
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