Good growth at Wood
By BFN News | 07:41 AM | Wednesday 11 May, 2011
Energy services company John Wood Group said overall it has delivered good growth in the first four months and anticipates the full year will be in line with expectations.
Following the acquisition of PSN and disposal of the Well Support division, Wood said the refocused Group is set to grow its position as a world leading engineering business.
In Engineering, year to date performance and a strong order book support expectations of good EBITA growth in 2011.
In the Production Facilities business, the North Sea has seen reasonable activity levels and we have extended a number of longer term contracts. Project related activity has been healthy, although there is the potential for projects to be delayed as field economics are reassessed.
PSN is performing in line with expectations.
In Gas Turbine Services, the group is benefiting from cost reduction measures and seeing an improving outlook for our services in the power market. Demand for oil and gas maintenance activities remains reasonable, however performance has been impacted by test cell downtime and overhaul delays in the Middle East and North Africa.
In Power Solutions, work on the Dorad and GWF projects is progressing well and will contribute more significantly to profit in the second half.
Well Support performed strongly up to the date of disposal on 26th April.
The Group said its financial position remains strong and it anticipates good operating cash flow for the year. Following the acquisition of PSN and disposal of the Well Support division, it plans to return cash to shareholders of not less than $1.7bn and an update on this, including the mechanism to be used, will be provided later this month. Following the return of cash, our balance sheet will continue to provide a strong platform for organic and acquisition led growth in key markets.
Overall, the Group has delivered good growth in the first four months of the year and anticipates that the full year performance will be in line with expectations. The long term fundamentals for oil & gas and gas fired power generation remain strong and Wood believes the refocused group is well positioned to deliver good longer term growth.
A trading update for the six months to 30th June 2011 will be provided on 1st July 2011.
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