Interim Results - Part 2
Wood Group (John) PLC
08 September 2003
John Wood Group PLC
Group profit and loss account
for the six month period to 30 June 2003
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Revenues including share of joint ventures
Continuing operations 944.4 809.1 1,689.6
Acquisitions 2.6 - 44.9
____________________________________________
947.0 809.1 1,734.5
Discontinued operations - 3.6 3.6
____________________________________________
Revenues including share of joint ventures 947.0 812.7 1,738.1
Less share of joint ventures revenues (128.4) (136.4) (305.6)
____________________________________________
Group revenues 818.6 676.3 1,432.5
Cost of sales (621.1) (513.6) (1,091.6)
____________________________________________
Gross profit 197.5 162.7 340.9
Net operating expenses (147.6) (119.3) (249.1)
____________________________________________
Operating profit of Group undertakings (after US$6.8m (June 2002 :
US$4.8m) goodwill amortisation) 49.9 43.4 91.8
Share of operating profit in joint ventures (after US$ 0.6m (June 2002 :
US$0.9m) goodwill amortisation) 15.7 12.6 31.5
Share of operating profit in associates 1.8 2.8 6.5
____________________________________________
Total operating profit : Group and share of joint ventures and
associates 67.4 58.8 129.8
Total operating profit comprises:
____________________________________________
Continuing operations 67.2 59.0 129.4
Acquisitions 0.2 - 0.9
____________________________________________
67.4 59.0 130.3
Discontinued operations - (0.2) (0.5)
____________________________________________
Net interest payable - Group (5.9) (4.3) (8.3)
- Joint ventures (1.3) (1.5) (2.7)
- Associates (2.2) (2.1) (4.1)
____________________________________________
Profit on ordinary activities before taxation 58.0 50.9 114.7
Taxation on profit on ordinary activities (22.2) (19.8) (44.4)
____________________________________________
Profit on ordinary activities after taxation 35.8 31.1 70.3
Equity minority interests (2.1) (2.8) (6.0)
____________________________________________
Profit for the financial period/year 33.7 28.3 64.3
Dividends (5.3) (6.7) (16.1)
____________________________________________
Retained profit for the financial period/year 28.4 21.6 48.2
____________________________________________
Basic earnings per ordinary share (cents) 7.1 8.3 15.7
Diluted earnings per ordinary share (cents) 6.9 6.5 13.8
Diluted earnings per ordinary share pre-amortisation (cents) 8.4 7.8 16.5
____________________________________________
John Wood Group PLC
Group balance sheet
as at 30 June 2003
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Fixed assets
Intangible assets 226.5 185.2 227.3
Tangible assets 234.8 132.9 206.7
Investments in joint ventures
____________________________________________
Share of gross assets 278.7 275.4 280.0
Share of gross liabilities (198.2) (212.7) (209.2)
Goodwill arising on acquisition 9.2 8.9 9.4
____________________________________________
89.7 71.6 80.2
Investments in associates 8.5 8.3 8.8
Other investments 2.4 1.1 1.2
____________________________________________
Total investments 100.6 81.0 90.2
____________________________________________
561.9 399.1 524.2
____________________________________________
Current assets
Stocks 168.7 155.5 152.6
Debtors 396.7 350.9 349.2
Cash at bank and in hand 65.7 49.5 56.2
____________________________________________
631.1 555.9 558.0
Creditors: amounts falling due within one year
____________________________________________
Bank loans and overdrafts (13.2) (8.1) (10.7)
Other creditors (300.0) (256.7) (281.6)
____________________________________________
(313.2) (264.8) (292.3)
____________________________________________
Net current assets 317.9 291.1 265.7
____________________________________________
Total assets less current liabilities 879.8 690.2 789.9
Creditors: amounts falling due after one year
Bank loans (279.6) (172.5) (222.7)
Other creditors (15.7) (2.8) (17.0)
____________________________________________
(295.3) (175.3) (239.7)
____________________________________________
Provisions for liabilities and charges (12.3) (11.3) (11.4)
Net assets excluding pension liability 572.2 503.6 538.8
____________________________________________
Pension liability (16.3) (5.3) (16.3)
____________________________________________
Net assets including pension liability 555.9 498.3 522.5
____________________________________________
Capital and reserves
Called up share capital 23.3 23.2 23.3
Share premium account 200.4 200.1 200.3
Capital reduction reserve 88.1 88.1 88.1
Profit and loss account 227.4 175.3 196.2
____________________________________________
Total equity shareholders' funds 539.2 486.7 507.9
Equity minority interests 16.7 11.6 14.6
____________________________________________
555.9 498.3 522.5
____________________________________________
John Wood Group PLC
Statement of group total recognised gains and losses
for the six month period to 30 June 2003
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Profit for the financial period/year 33.7 28.3 64.3
Actuarial loss recognised in the pension scheme - - (14.0)
Movement in deferred tax relating to pension liability - - 4.2
Exchange movement on retranslation of foreign currency net assets 2.8 (5.9) (1.2)
____________________________________________
Total gains recognised since last annual report 36.5 22.4 53.3
____________________________________________
Reconciliation of movement in group shareholders' funds
for the six month period to 30 June 2003
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Profit for the financial period/year 33.7 28.3 64.3
Dividends (5.3) (6.7) (16.1)
____________________________________________
28.4 21.6 48.2
Issue of new shares 0.1 216.1 216.2
Redemption of convertible redeemable preference shares - (29.6) (29.6)
Expenses of share issue - (11.5) (11.9)
Actuarial loss recognised in the pension scheme net of deferred tax - - (9.8)
Exchange movement on retranslation of foreign currency net assets 2.8 (5.9) (1.2)
____________________________________________
Net increase in shareholders' funds 31.3 190.7 211.9
Opening shareholders' funds 507.9 296.0 296.0
____________________________________________
Closing shareholders' funds 539.2 486.7 507.9
____________________________________________
John Wood Group PLC
Group cash flow statement
for the six month period to 30 June 2003
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Net cash inflow from operating activities 38.6 39.2 127.9
____________________________________________
Dividends from joint ventures 1.6 1.8 7.7
____________________________________________
Returns on investments and servicing of finance
Interest received 2.2 4.4 7.5
Interest paid (6.8) (8.2) (15.5)
Non-equity dividends paid - (6.5) (6.5)
____________________________________________
(4.6) (10.3) (14.5)
Taxation
____________________________________________
UK corporation tax paid (2.7) (1.0) (0.4)
Overseas tax paid (13.1) (14.1) (22.6)
____________________________________________
(15.8) (15.1) (23.0)
____________________________________________
Capital expenditure and financial investment
Purchase of tangible fixed assets (48.7) (24.4) (105.9)
Sale of tangible fixed assets 1.9 0.8 5.1
Purchase of other investments (1.2) - -
Disposal of investments - 0.1 0.2
Repayment of loans from/(loans to) joint ventures 3.9 (3.8) 6.2
____________________________________________
(44.1) (27.3) (94.4)
____________________________________________
Acquisitions and disposals
Acquisition of minority interests - (16.4) (18.2)
Purchase of subsidiary undertakings, net of cash (16.5) (18.7) (77.1)
acquired
Disposal of subsidiary undertakings 5.7 - -
Investment in joint ventures - - (0.6)
Purchase of intangible assets (1.0) - -
Deferred consideration - - (0.4)
____________________________________________
(11.8) (35.1) (96.3)
____________________________________________
Equity dividends paid (9.5) (2.8) (7.5)
_____________________________________________
Net cash outflow before management of liquid resources and financing (45.6) (49.6) (100.1)
_____________________________________________
Management of liquid resources
Decrease/(increase) in cash placed on deposit 5.2 7.2 (0.9)
_____________________________________________
Financing
Increase/(decrease) in bank loans 54.2 (206.5) (153.6)
Issue of ordinary shares 0.1 216.1 216.2
Redemption of convertible redeemable preference shares - (29.6) (29.6)
Expenses of share issue - (11.5) (11.9)
_____________________________________________
Net cash inflow/(outflow) from financing 54.3 (31.5) 21.1
_____________________________________________
Increase/(decrease) in cash 13.9 (73.9) (79.9)
_____________________________________________
John Wood Group PLC
Notes to the interim accounts
for the six month period to 30 June 2003
1. Preparation of interim accounts
The interim report and accounts have been prepared on the basis of the
accounting policies set out in the group's 2002 Annual Report and Accounts.
The interim accounts were approved by the Board of Directors on 5 September
2003. The results for the six months to 30 June 2003 and the comparative
results for the six months to 30 June 2002 are unaudited. The comparative
figures for the year ended 31 December 2002 do not constitute the statutory
financial statements for that year. Those financial statements have been
delivered to the Registrar of Companies and included the auditors' report
which was unqualified and did not contain a statement either under section
237 (2) or section 237 (3) of the Companies Act 1985.
2. Segmental reporting
Business segments
Revenues EBITDA EBITA Operating profit
Full Full Full Full
Interim Interim Year Interim Interim Year Interim Interim Year Interim Interim Year
June June Dec June June Dec June June Dec June June Dec
2003 2002 2002 2003 2002 2002 2003 2002 2002 2003 2002 2002
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
__________________________________________________________________________________________________
Engineering & Production
Facilities
Group 450.0 382.1 823.7 48.2 37.0 82.5 39.4 33.8 75.7 35.9 30.9 69.2
Joint ventures 73.0 74.3 169.1 9.9 7.8 19.3 8.4 6.1 16.0 8.2 5.8 15.6
__________________________________________________________________________________________________
523.0 456.4 992.8 58.1 44.8 101.8 47.8 39.9 91.7 44.1 36.7 84.8
__________________________________________________________________________________________________
Well Support
Group 189.8 178.3 354.8 19.1 15.9 32.7 13.5 11.0 22.5 12.3 10.0 20.4
Joint ventures 1.2 2.1 5.2 - (0.5) (0.5) (0.1) (0.6) (0.8) (0.1) (0.6) (0.8)
__________________________________________________________________________________________________
191.0 180.4 360.0 19.1 15.4 32.2 13.4 10.4 21.7 12.2 9.4 19.6
__________________________________________________________________________________________________
Gas Turbine Services
Group 162.0 98.4 220.7 18.6 16.3 32.3 13.9 13.1 25.0 11.8 12.2 22.8
Joint ventures 54.2 60.0 131.3 9.1 9.3 20.5 8.0 8.0 18.1 7.6 7.4 16.7
__________________________________________________________________________________________________
216.2 158.4 352.0 27.7 25.6 52.8 21.9 21.1 43.1 19.4 19.6 39.5
__________________________________________________________________________________________________
Total excluding
discontinuing
operations 930.2 795.2 1,704.8 104.9 85.8 186.8 83.1 71.4 156.5 75.7 65.7 143.9
Gas Turbine Services
- discontinuing
operations 16.8 17.5 33.3 (0.2) (1.6) (2.3) (0.9) (2.2) (3.5) (0.9) (2.2) (3.5)
__________________________________________________________________________________________________
Total 947.0 812.7 1,738.1 104.7 84.2 184.5 82.2 69.2 153.0 74.8 63.5 140.4
__________________________________________________________________________________________________
Comprising
__________________________________________________________________________________________________
- Group 818.6 676.3 1,432.5 85.7 67.6 145.2 65.9 55.7 119.7 59.1 50.9 108.9
- Joint ventures 128.4 136.4 305.6 19.0 16.6 39.3 16.3 13.5 33.3 15.7 12.6 31.5
__________________________________________________________________________________________________
Central costs
(including
central
depreciation) (8.8) (7.2) (16.5) (9.2) (7.5) (17.1) (9.2) (7.5) (17.1)
Share of
operating
profit in
associates 1.8 2.8 6.5
__________________________________________________________________________________________________
Total 947.0 812.7 1,738.1 95.9 77.0 168.0 73.0 61.7 135.9 67.4 58.8 129.8
__________________________________________________________________________________________________
Net interest
payable (9.4) (7.9) (15.1)
__________________________
Profit before
taxation 58.0 50.9 114.7
__________________________
Notes
1. EBITDA represents operating profit (including the share of joint ventures
but excluding the share of associates) before deduction of depreciation and
goodwill amortisation. EBITA represents EBITDA less depreciation
(including joint venture depreciation). Operating profit of group
undertakings for the six month period to June 2003 amounts to US$49.9m
(June 2002 : US$43.4m) and operating profit of joint ventures amounts to
US$15.7m (June 2002 : US$12.6m). Depreciation comprises group depreciation
of US$20.2m (June 2002 : US$12.2m) and joint venture depreciation of
US$2.7m (June 2002 : US$3.1m). Goodwill amortisation comprises group
amortisation of US$6.8m (June 2002 : US$4.8m) and joint venture
amortisation of US$0.6m (June 2002 : US$0.9m).
2. The discontinuing operations of the Gas Turbine Services business relate to
Aero engine overhaul companies which the group has decided to divest.
3. Revenues arising from sales between segments are not significant and have
been eliminated in the above analysis.
4. The Group's associate is not part of any of the current business segments.
John Wood Group PLC
Notes to the interim accounts (continued)
for the six month period to 30 June 2003
2. Segmental reporting (continued)
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
____________________________________________
Net operating assets
Engineering & Production Facilities
- Group 274.5 182.0 226.2
- Joint ventures 41.6 36.0 42.0
____________________________________________
316.1 218.0 268.2
____________________________________________
Well Support
- Group 194.0 210.1 179.9
- Joint ventures 3.1 2.1 2.6
____________________________________________
197.1 212.2 182.5
____________________________________________
Gas Turbine Services
- Group 223.7 130.8 207.6
- Joint ventures 84.4 75.5 73.7
____________________________________________
308.1 206.3 281.3
____________________________________________
Total allocated excluding discontinuing operations 821.3 636.5 732.0
Gas Turbine Services - discontinuing operations 22.6 27.2 22.1
____________________________________________
Unallocated (21.6) 7.7 (16.3)
Net operating assets 822.3 671.4 737.8
Net debt - Group (227.1) (131.1) (177.2)
Net debt - Joint ventures (39.3) (42.0) (38.1)
____________________________________________
Net assets 555.9 498.3 522.5
____________________________________________
3. Dividends
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
_____________________________________________
Dividends on non-equity shares
First convertible preference shares - 0.2 0.2
Second convertible preference shares - 0.4 0.4
First convertible redeemable preference shares - 0.6 0.6
Second convertible redeemable preference shares - 0.7 0.7
Dividends on equity shares
Interim proposed 5.3 4.8 -
Interim paid - - 4.7
Final proposed - - 9.5
_____________________________________________
Total dividends 5.3 6.7 16.1
_____________________________________________
The proposed interim dividend is 1.1 cents per share and will be paid on 16
October 2003.
John Wood Group PLC
Notes to the interim accounts (continued)
for the six month period to 30 June 2003
4. Earnings per share
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
_____________________________________________
Basic EPS
Earnings 33.7 26.4 62.4
Weighted average number of shares 474.7 316.9 396.2
EPS (cents) 7.1 8.3 15.7
Diluted EPS
Earnings 33.7 28.3 64.3
Weighted average number of shares 491.1 437.4 465.4
EPS (cents) 6.9 6.5 13.8
Diluted EPS pre-amortisation
Earnings 41.1 34.0 76.9
Weighted average number of shares 491.1 437.4 465.4
EPS (cents) 8.4 7.8 16.5
The calculation of basic earnings per share for the six months ended 30 June
2003 is based on the profit for the period, divided by 474,741,000 ordinary
shares being the weighted average number of ordinary shares in issue during the
period excluding shares held by the Group's employee share ownership trusts. The
diluted number of shares takes account of share options where the effect of
these is dilutive. Diluted EPS pre-amortisation is disclosed to show the results
excluding the impact of goodwill amortisation. The calculation of adjusted EPS
in the periods to June 2002 and December 2002 reflects the conversion of
preference shares to ordinary shares for the period prior to the IPO.
5. Taxation
The taxation charge for the six months ended 30 June 2003 reflects the
anticipated effective taxation rate of 33.9% on profit before taxation and
amortisation for the year ending 31 December 2003 (June 2002 : 35.0%).
6. Acquisitions and disposals
In January 2003 the Group disposed of Wood Group Drilling Products, a company
within Well Support.
In April 2003 the Group acquired the assets of Barber Industries, an established
manufacturer and supplier of wellhead equipment, valve safety systems and rig
savers to the Canadian oil and gas production and pipelines industries, for a
consideration of US$10.8 million.
In May 2003 the Group acquired Dutch engineering company Korndorffer Contracting
International (KCI) for a consideration of US$5.7 million. KCI specializes in
design engineering for oil and gas clients in the Netherlands.
John Wood Group PLC
Notes to the interim accounts (continued)
for the six month period to 30 June 2003
7. Net cash inflow from operating activities
Unaudited Unaudited
Interim Interim Full Year
June 2003 June 2002 Dec 2002
US$m US$m US$m
_____________________________________________
Operating profit from group undertakings 49.9 43.4 91.8
Depreciation of tangible fixed assets 20.2 12.2 26.1
(Gain)/loss on sale of fixed assets (0.4) - 0.6
Amortisation of goodwill 6.8 4.8 10.8
(Increase) /decrease in stocks (9.2) 3.8 7.3
Increase in debtors (38.0) (15.3) (8.0)
Increase in amounts due from joint ventures (4.3) (11.5) (13.5)
Increase in creditors 13.6 5.6 17.2
Increase/(decrease) in provisions 0.9 (3.1) (3.0)
Exchange adjustments (0.9) (0.7) (1.4)
_____________________________________________
38.6 39.2 127.9
_____________________________________________
8. Analysis of net debt
1 Jan 2003 Cash flow Exchange 30 June 2003
US$m US$m US$m US$m
______________________________________________________________________
Cash 31.4 13.9 0.5 45.8
Deposits 24.8 (5.2) 0.3 19.9
Bank loans and overdrafts due within one year (10.7) (2.1) (0.4) (13.2)
Bank loans due after one year (222.7) (52.1) (4.8) (279.6)
______________________________________________________________________
Net debt (177.2) (45.5) (4.4) (227.1)
______________________________________________________________________
9. Pension commitments
The pension liability at 30 June 2003 is as calculated at 31 December 2002 as
adjusted for current service cost, interest cost and expected return on assets.
No interim revaluation has been carried out and accordingly there is no
actuarial gain/loss in the statement of total recognised gains and losses. The
figures for gains and losses for the full year together with the surplus/deficit
at the year end will be presented in the 2003 Annual Report. The group's
defined benefit scheme was closed to new employees with effect from 6 April
2003, with transitional arrangements for existing employees.
John Wood Group PLC
Shareholder information
Payment of dividends
The Company declares its dividends in US dollars. As a result of the
shareholders being mainly UK based, dividends will be paid in sterling, but if
you would like to receive your dividend in dollars please contact the Registrars
at the address below. All shareholders will receive dividends in sterling unless
requested. If you are a UK based shareholder, the company encourages you to
have your dividends paid through the BACS (Banker's Automated Clearing Services)
system. The benefit of the BACS payment method is that the Registrar posts the
tax vouchers directly to the shareholders, whilst the dividend is credited on
the payment date to the shareholder's Bank or Building Society account.
Shareholders who have not yet arranged for their dividends to be paid direct to
their Bank or Building Society account and wish to benefit from this service
should contact the Registrar at the address below. Sterling dividends will be
translated at the closing mid-point spot rate on 26 September 2003 as published
in the Financial Times on 27 September 2003.
Officers and advisers
Secretary and Registered Office Registrars
C E M Watson Lloyds TSB Registrars Scotland
John Wood Group PLC PO Box 28448
John Wood House Finance House
Greenwell Road Orchard Brae
ABERDEEN EDINBURGH
AB12 3AX EH4 1WQ
Tel: 01224 851000 Tel: 0870 601 5366
Stockbrokers Auditors
Cazenove & Co Limited PricewaterhouseCoopers LLP
Credit Suisse First Boston Chartered Accountants
Financial calendar
6 months ended Year ending
30 June 2003 31 December 2003
Results announced 8 September 2003 Early March 2004
Annual General Meeting - Late April 2004
Ex-dividend date 24 September 2003 Late April 2004
Dividend record date 26 September 2003 Late April 2004
Dividend payment date 16 October 2003 Late May 2004
Wood Group has developed an Investor Relations website which can be accessed at
www.woodgroup.com.
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