Gilmartin blasts Wood’s ‘underperformance’
Ken Gilmartin, who took over as CEO of Wood Group last year, said the company had failed to deliver for shareholders after the company posted an operating loss of $568 million. He said the board is looking to sell a number of businesses.
The loss was due to an impairment charge and adjusted EBITDA came in at $385 million, flat on last year at constant currency.
In a statement critical of the Aberdeen company’s performance, Mr Gilmartin said it had “not delivered for our shareholders in recent years” and blamed “company-specific issues including insufficient discipline in project selection, high levels of restructuring and a series of legacy issues arising from the acquisition of Amec Foster Wheeler in 2017”.
Mr Gilmartin, who succeeded Robin Watson at the helm of the company, added: “We tackled these issues head-on in 2022 and launched a new chapter for the group with the transformative sale of Built Environment Consulting, reset of our balance sheet and launch of our profitable growth strategy.
“As we look ahead, we have instilled a structure and discipline into the business which will mitigate against future issues and allow us to grow from these strong foundations.”
He said the company is currently evaluating its portfolio and has identified underperforming businesses that do not fit with the focused strategy, generate negative margin and represent around 4% of revenue.”We are considering options in respect of these businesses,” he said.
“We have a new leadership team, with seven of nine members of our Executive Leadership Team appointed to their roles in 2022 and 2023. Our wider senior leadership team has also undergone change, and we have added key hires throughout 2022 to strengthen our commercial offering, including recruiting leading subject-matter experts.”
The board reported a significant order book of $6 billion , up 4% at constant currency and an order book for delivery in 2023 of $3.9 billion, up 10% on last year
Mr Gilmartin made no mention of the takeover talks with Apollo which has a new deadline of 19 April to decide whether to bid for the company.
Apollo has made a 237p cash approach, its fourth proposal, and Wood requested an extension to talks to allow today’s results to be presented.
With the shares at 199p, down 2% today, investors seem unconvinced that a deal will go through.
Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “While most of the attention in the build up to these results was about recent bids for Wood, the operational story for the company has not changed dramatically.
“Wood has continued on its transformation programme and looks to be making reasonable progress – particularly on debt, which is down significantly on previous levels.
“Apollo’s bid of 237p is substantially higher than Wood’s current share price and, while today’s results show the company still has some work ahead of it, they also underline why potential suitors can see value in the business.”