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(Alliance News) - John Wood Group PLC on Tuesday announced improved annual earnings, lifted its outlook and announced a "simplification programme" to trim costs.
The Aberdeen, Scotland-based engineering and consulting business said revenue in 2023 rose 7.9% to USD5.90 billion from USD5.47 billion. Its pretax loss narrowed to USD62.7 million from USD691.4 million.
Adjusted earnings before interest, tax, depreciation and amortisation grew 8.8% to USD423 million from USD388 million.
It reported cash flow from operating activities of USD48 million, a swing from an outflow of USD361 million.
"We made significant progress in this first year of our three-year growth strategy. We delivered strong revenue and adjusted Ebitda growth, and we significantly improved operating cash flow," Chief Executive Officer Ken Gilmartin said.
"We continue to see clear business momentum, with a higher order book, double-digit growth in our pipeline and positive pricing trends in both pipeline and order book. It is encouraging that the fastest growing parts of Wood are the higher-margin Consulting business, and our sustainable solutions across all areas."
Gilmartin said Wood Group has launched a "simplification programme to drive efficiency". It is eyeing annualised cost savings of around USD60 million from 2025. The programme will have an "initial focus on central costs", where costs are expected to be trimmed by around USD10 million this year.
Looking to 2024, it expects adjusted Ebitda growth towards the top end of its mid to high single digit target. In 2025, it predicts Ebitda growth "above our medium-term target".
"We are on-track to deliver significant free cash flow in 2025, as previously guided," it said.
Wood Group did not resume its dividend, which it had axed following the onset of the Covid-19 pandemic.
Shares in the company traded 1.7% lower at 145.70 pence each in London on Tuesday morning.
By Eric Cunha, Alliance News news editor
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