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Posts: 262
Opinion: No Opinion
Posted: November 7, 2024
Wood Group's Q3 trading update shows solid momentum with revenue up 15% year-to-date, reflecting strong performance across its energy and consulting sectors. The company highlights particular strength in projects tied to renewable energy and energy transition, while also noting contract wins that support sustained growth. However, the update acknowledges some pressures in the traditional oil and gas sectors. The group maintains its 2023 guidance, reinforcing its commitment to revenue growth and improved operational efficiencies.
A 51% share price drop on positive revenue growth could reflect investor concerns over factors not detailed in the trading update, such as potential profitability challenges, industry pressures, or unexpected future costs. Before considering an investment, examining Wood Group's cash flow, debt levels, and sector outlook—especially in energy and renewables—would be key. Additionally, understanding the specific reasons behind the steep drop could clarify if the stock is undervalued or if caution is warranted. Consulting financial analyses or industry reports could provide deeper insights.
Wood Group’s recent Q3 trading update led to a significant 51% drop in its share price due to lower-than-expected cash flows and higher-than-anticipated net debt, which surprised investors. Despite reported growth in revenue and adjusted EBITDA, challenges in working capital and the higher net debt have overshadowed these gains. The company is also experiencing pressure after previously rejecting a buyout bid from Apollo Global, with some shareholders questioning that decision given the subsequent volatility in share price.
Given the significant price drop, some investors might view Wood Group as a potential buy at these lower levels. However, it’s essential to weigh the risks: the company’s financial performance indicates continued headwinds with cash flow management, which may limit near-term upside. Additionally, the general bearish outlook on the stock—evidenced by price dips below key moving averages—suggests it may not yet have found a stable bottom.
In summary, while Wood Group might appear undervalued after this decline, it remains a high-risk proposition. Potential buyers may want to monitor future developments closely, especially any updates on cash flow management and debt reduction initiatives in upcoming quarters.
Posts: 262
Opinion: No Opinion
Posted: May 3, 2019
RNS Number : 9469X
Wood Group (John) PLC
03 May 2019
Wood closes sale of Terra Nova Technologies
Wood today confirms it has completed the sale of conveyor systems business Terra Nova Technologies (TNT), as originally announced on 25 March. Following a strategic review of its portfolio, Wood identified potential asset disposals which are expected to generate proceeds in the range of c$200m-c$300m. This transaction makes a good contribution to the asset disposal programme.
The TNT business was sold to Cementation Americas, a firm owned by Murray & Roberts Holdings Ltd, for $38m, representing a multiple of 5.2x 2018 EBITA of $7.3m.
Posts: 262
Opinion: Buy
Posted: December 18, 2018
RNS Number : 7426K
Wood Group (John) PLC
18 December 2018
Wood wins $66 million Sellafield control systems framework
Wood has won a contract to supply programmable digital control technologies to the Sellafield nuclear site in Cumbria, UK.
The 10-year framework, worth $66 million, covers all stages of system design, manufacture and assembly of equipment, obsolescence management and maintenance support to project work and decommissioning carried out by Sellafield Ltd.
The contract will help Sellafield Ltd and its wider supply chain to deliver safe, sustainable and cost-effective solutions to full lifecycle controls integration supply at the site.
It was secured by a joint approach from nuclear and automation and controls specialists within Wood, augmenting best-in-class experience from the automotive and oil & gas sectors with nuclear competence, stakeholder relations and site-specific knowledge.
Bob MacDonald, CEO of Wood Specialist Technical Solutions, said: "We are looking forward to working with Sellafield Ltd and demonstrating the strength and depth of controls integration expertise across the whole of Wood, bringing together our nuclear expertise with our automation and controls capability.
"Securing this important framework is proof of the rationale for acquiring Amec Foster Wheeler 12 months ago and a good revenue synergy. We could not have won this contract as separate businesses.
"Our aim is to provide Sellafield Ltd with long-term supply chain capability and capacity, implementing standardised solutions, building innovation into design and delivery, managing obsolescence, and reducing lifecycle costs."