Member Info for Wiggly

I don't expect a gap down because at 200mc it's massively oversold. This assessment is based on hard financial facts. Even in the worst bear case view 200m is too low and it will rise from here.

I certainly expect it to gap down on Monday.

Based on the current massively undervalued market cap I think that is highly unlikely.

Plenty will be able to study the numbers over and weekend and make an educated investment from next week. Wood is not going bust tomorrow and I'm sure major holders will be demanding the group is sold.

Huge bargain if sold for 600m to PE, so that's 90p and decent return for anyone buying now

A necessary decision but one that will definitely result in a change at the top.

Estimated total cash costs of legacy claims liabilities remain around $150 million5, which we expect to pay and extinguish over the next three years.

2026 and beyond looks much better.

Need to navigate carefully but potential for huge upside for buyers at 200m mc.

Key Updates & Adjustments

Order Book: $6.2B (strong backlog)

2025 EBITDA Growth: ~10–15% increase → $500M–$520M

2025 EBIT Growth: ~10–15% increase → $230M–$250M

FCF: Negative $(150M) to $(200M) but offset by $150M–$200M in disposals

Debt Levels:

Before disposals: Net debt ~$1.1B (same as 2024)

Debt Stability: Disposals help maintain leverage & liquidity.

Order Book Growth: Supports revenue visibility into 2026+.

Bear Case (5x EBITDA, high debt, weak growth): $1.2B – $1.4B

Base Case (6–7x EBITDA, solid execution, post-disposals): $1.8B – $2.6B

Bull Case (8x EBITDA, strong market confidence, post-disposals): $2.9B – $3.1B

Net debt excluding leases at 31 December 2024 of around $690 million3 (31 December 2023: $694 million) and average net debt in 2024 of c.$1.1 billion)

Leases are contractual obligations but not traditional debt that needs refinancing.

Lenders and analysts often exclude leases when assessing debt repayment risk.

The core debt at $690 should be easily refinanced.

Even in extreme bear case view, the drop has been overdone by 50%!

Energy companies typically trade at:

EV/EBITDA: 4x–7x (higher for renewables, lower for traditional oil & gas)

EV/EBIT: 8x–12x (varies by profitability and growth outlook)

2. Updated Market Cap Estimates

EV/EBITDA Method

EV = 4 × $450M = $1.8B → EV = 7 × $460M = $3.2B

Market Cap = EV - Net Debt ($1.2B)

Market Cap range = $600M – $2B

EV/EBIT Method

EV = 8 × $205M = $1.64B → EV = 12 × $215M = $2.58B

Market Cap range = $440M – $1.38B

3. Adjustments for Negative FCF Until 2026

The market may discount valuation due to cash burn and refinancing risks.

If investors believe positive FCF in 2026 is credible, they may price in future earnings.

If debt refinancing is difficult, market cap could be toward the lower end of estimates.

Final Estimate for Fair Market Cap (Energy Industry Adjusted)

Bear case (higher discount due to negative FCF): $400M–$1B

Base case (moderate investor confidence in 2026 FCF): $1B–$1.5B

Bull case (strong belief in future cash flows & good refinancing terms): $1.5B–$2B+

Wood Group appears significantly undervalued based on its financial metrics. However, the market is pricing in high risk factors, including negative free cash flow (FCF), debt refinancing concerns, and governance weaknesses.

Key Valuation Metrics vs. Market Cap

EBITDA: $450M–$460M

Net Debt: $1.2B

Market Cap: ~£200M ($250M USD)

EV/EBITDA: ~3.8x (very low for the sector, typically 5x–7x)

Debt Maturity: $1.2B due in October 2026

Negative FCF: ~$200M this year (expected to turn positive in 2026)

Why It May Be Undervalued:

1. Strong EBITDA but Low Valuation – At an EV/EBITDA of ~3.8x, the company is trading at a steep discount compared to typical 5x–7x industry multiples.

2. Debt is Manageable (for Now) – Net debt/EBITDA is ~2.6x, which is not extreme for an energy firm. If refinancing is secured, valuation could rise.

3. Asset Sales & Cost Savings – The company is targeting $200M in asset sales and $85M in cost savings, which could improve financial stability.

4. Potential Re-Rating If FCF Turns Positive – If investors gain confidence in 2026 cash flow projections, multiples could expand.

Valuation Upside If Refinancing Succeeds:

If Wood Group secures refinancing and turns FCF positive, it could re-rate to a 5x–6x EV/EBITDA multiple, implying a potential market cap of £500M–£1.2B ($600M–$1.5B USD).

Conclusion:

Wood Group is undervalued IF it successfully refinances debt and executes its turnaround plan. However, the market is pricing in serious risk. If refinancing is secured, the stock could have 2x–5x upside from current levels.

Debt needs refinancing. It's the same thing as trying to get a mortgage without a job or any evidence of having made any money recently. It's like going to the bank and saying 'i can't pay the loan, I have lied about my cashflow and it keeps changing ' but PLEASE refinance it.

Rubbish. Operating cash flow improving significantly and there is $6b order book. Why would lenders refinance

They should put the for sale sign up. How much could they get?

Continued improvements in operating cash flow6, which has improved from $(66) million in FY22 to c.$275 million in FY24, helped by working capital improvements, including the absence of the 2025 working capital unwind (c.$70 million)

They do look like buys?

Now and 250m market cap. That's clearly too low

Massive buys.

A complete sale would be good. How much could they get ?

Listened to call and outlook is positive

Finances nothing like PFC. Should recover very well from this level.

Tomorrow likely explosive then

It will run to 4s again and hopefully break much higher

Cant buy a bean now, but can sell full holding at 2.75