Wood Group sells off consultancy division for £1.5bn as it doubles down on shareholder returns
John Wood Group has sold off its consulting business Built Environment to WSP Global for a whopping $1.9bn (£1.5bn).
The immediate use of the sale proceeds will be used to reduce Wood’s net debt, which stood at $1.4bn in December 2021, as well as strengthening its balance sheet.
Commenting on the sale, chief exec Robin Watson said:”This transaction will deliver significant value for our shareholders and marks a new chapter for Wood.
“It enables us to move onto our next strategic phase with the financial flexibility to accelerate our strategy to capture the growth opportunities ahead across both energy security and sustainability”, he added.
The outlook for Aberdeen-based energy services group remains unchanged from its full year 2021 results last month.
The group recorded a full-year revenue of $6.4bn, down around 15 per cent from the previous year.
Excluding the impact of the sale, the firm expects higher revenue in 2022 across the business, which is supported by growth in its order book.
Back in February, it was revealed that the firm was set to swallow a $100m (£73.6m) charge on a project in Poland, which has prompted investors to duck out of the stock.
Wood’s share price plunged more than 11 per cent to 200p per share by earlier this year, making it the shakiest day of London trading in almost two years.
The legacy Amec Foster Wheeler project, Aegis Poland, is expected to be completed by the second half of this year, however, management anticipate the project to cost an extra £14.7m ($20m) to finalise.
The recent named losses on the missile defence facility project come on top of the previous forecast loss of around £98m ($133m).
Shares are down five per cent in early morning trading, following the 20 per cent rise in the year to date.