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(Alliance News) - John Wood Group PLC on Thursday reported that revenue and profit fell in line with guidance for 2021, as the energy services provider wrestled with challenging market conditions.
However the Aberdeen-based firm noted a stronger second half of trading with "improving momentum" across its businesses.
Shares surged 15% to 229.90 pence in London on Thursday morning.
John Wood posted revenue for the year ended December 31 of around USD6.4 billion, down 14% on a like-for-like basis, with growth in Consulting and Operations more than offset by a significant decline in Projects.
Adjusted earnings before interest, tax, depreciation and amortisation are expected between USD550 million and USD560 million, a drop of 9% on a like-for-like basis, with improved Ebitda in Consulting offset by a decline from Projects and Operations. Operating profit before exceptional items is expected at around USD195 million to USD205 million, down from USD214 million last year.
The order book at year-end was significantly up year-on-year, the company said, supporting its expectations for increased activity in 2022.
"2021 saw improving momentum across our businesses, against a backdrop of continued challenging market conditions," commented Chief Executive Robin Watson.
"Together with significant growth in our order book, this enables us to start 2022 confident that activity levels are improving. We also continued to make good progress in de-risking the group's project portfolio and in driving margin improvement in 2021."
John Wood also reemphasised plans to sell its built-environment unit within Consulting. After a review the group said it had concluded that a full sale process was the best option to deliver value for shareholders and that the process is now underway. A sales agreement is expected to be announced in the second quarter.
The built-environment business provides consulting and engineering solutions that address environmental risks, increase climate resilience, and help to build more sustainable infrastructure.
In 2021, the part of the business that services the built-environment end-market is expected to account for about USD1.3 billion of revenue within John Wood's Consulting unit.
Net debt on December 31 was USD1.4 billion, up from USD1.3 billion, due to lower collections, mostly in the Project business. John Wood said its current ratio of net debt to adjusted Ebitda of 3.2 times is below its bank covenant maximum of 3.5 times but is "significantly higher than our target leverage". It said the sale of the Built Environment business, plus increased business activity in 2022, will help fix this.
Annual results will be published on March 8.
By Will Paige; willpaige@alliancenews.com
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