LONDON (Alliance News) - Energy services firm John Wood Group PLC on Tuesday swung to an annual profit, with its acquisition of Amec Foster Wheeler driving significant growth.
Aberdeen-based John Wood bought peer Amec Foster Wheeler in October 2017 for GBP2.20 billion, so 2018 was the first year reported on as a combined group.
For 2018, revenue on a statutory basis rose 86% to USD10.01 billion, and including joint ventures by 79% to USD11.04 billion. Pro forma, revenue including joint ventures climbed 12% to USD9.88 billion.
Pretax profit for John Wood in 2018 was USD53.5 million, from continuing operations, after a loss of USD21.6 million in 2017. Before exceptional items, pretax profit rose 50% to USD244.8 million from USD162.9 million.
It is paying a final dividend of 23.7 US cents, taking the total for 2018 to 35.0 cents, 2.0% higher on the prior year.
Net debt declined 5.9% as of the end of 2018 to USD1.55 billion, while the order book at the same time stood at USD10.26 billion. Some 60% of forecast revenue for 2019 has been secured, John Wood said.
"John Wood returned to growth in 2018 with good momentum in trading and a significant impact from cost synergy delivery," said Chair Ian Marchant.
"Results benefited from relatively favourable conditions in the wide range of energy and industrial end markets Wood now operates in, despite a slower sector recovery in oil & gas."
All business divisions saw "high" activity, John Wood said, across various industries and geographies.
Looking to 2019, revenue growth is guided at around 5%. Combined with further cost savings, earnings are thus guided to grow in line with market expectations.
The market, John Wood said, sees adjusted earnings before interest, tax, and amortisation in 2019 of USD716 million, after USD630 million in 2018, up 69% year-on-year.
"Looking ahead, there is a very positive medium term outlook for Wood's broader end markets. The board is confident Wood is well placed to deliver good longer term growth both organically and by a return to acquisition led growth that aligns with our long term preferred capital structure," Marchant added.
Shares in London were 8.2% lower on Tuesday at a price of 549.80 pence each.
Wood Group (J) (WG.)