(Alliance News) - FTSE 250-listed John Wood Group PLC said Wednesday its performance in the first half is ahead of a year prior.
Shares in the oilfield services company were up 6.6% in London in early trading at 445.40 pence each, making it the best mid-cap performer on Wednesday.
John Wood said its revenue in the six months to June 30 is in line with a year before but the company has seen earnings growth and margin improvements.
The company said the margin improvement was led by its energy activities within its Asset Solutions unit in Europe, Africa, Asia & Australia. The company's Environment & Infrastructure Solutions unit also saw margin improvements, John Wood said.
Excluding the impact of moving to a new accounting method, the company's earnings before interest, tax, depreciation and amortization is expected to be about 7% higher than a year before. Operating profit is expected to be about 25% ahead of the prior year period.
"Our first half performance is ahead of prior year. We have delivered significant growth in operating profit together with Ebitda margin improvement. This has been led by our activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with the delivery of further cost synergies. Our expectation of revenue growth, strong earnings growth and cash generation in 2019 is unchanged," said Chief Executive Robin Watson.
John Wood expects full year revenue growth of about 5%, weighted towards the second half. Expected cost synergies of about USD60 million will lead to adjusted Ebitda growth, the company said.
For 2018, revenue on a statutory basis stood at USD10.01 billion, and including joint ventures revenue was USD11.04 billion. Pretax profit from continuing operations in 2018 was USD53.5 million. Before exceptional items, pretax profit was USD244.8 million.
The company's net debt is expected to be about USD1.6 billion at the end of June, in line with its 2018 year end position.
The company's Asset Solutions unit is split into two businesses: Americas and Europe, Africa, Asia & Australia. Each business contributes around 35% of the company's revenue.
In the Americas, John Wood said its Asset Solutions revenue was up on a year before but Ebitda was "slightly down". In Europe, Africa, Asia & Australia, revenue was flat on a year before but Ebitda saw "good growth".
In the company's Specialist Technical Solutions unit, representing about 15% of group revenue, John Wood said its revenue and Ebitda was in line with the year before.
Environment & Infrastructure Solutions, which contributes about 15% of revenue, delivered "good" growth in revenue and saw an "improved" margin performance in the first half.
Following the company's USD140 million part refinancing in the first quarter, John Wood said it has made further progress on refinancing its existing term loan facility, which is due to mature in October 2020.
In June, John Wood said it was able to secure USD364 million from a private placement from US investors.
"This extends the maturity of our debt profile and further diversifies our sources of long term finance at competitive rates, with the majority comprising a mix of seven to 12 year redemption dates at a fixed rate of around 5%. The refinancing has no material impact on our expectations for the full year interest expense," the company added.
Wood Group (J) (WG.)
