Wood Group chairman Sir Ian Wood said yesterday he expected the firm to make several acquisitions, including one worth more than £60million, within a year.
He was speaking after the Aberdeen-based energy services company delivered 2010 results and said it was eyeing opportunities – both organic and through acquisitions – in new markets including Angola, Brazil, Canada, Malaysia and Saudi Arabia.
Sir Ian added Uganda to the list as he outlined the group’s strategy in the wake of last week’s announcement the firm was selling its well-support operations to the oil and gas arm of American conglomerate General Electric (GE) for about £1.8billion.
Some of that cash will be used to pay off debt that Wood Group took on in the £606million acquisition of smaller rival and fellow Aberdeen company PSN late last year, but there will also be plenty left over for acquisitions as it looks to expand its business globally.
The group is now fully focused on engineering, production facilities support and industrial gas turbines after disposing of the well-support business, which Sir Ian said was only ever “at the top of the second division” in a market dominated by bigger players.
He added: “It was always a relatively hard struggle getting it anywhere near the big guys. In our remaining areas of operation, however, we are one of the big guys.”
Wood Group posted a 3.9% drop in pre-tax profits for 2010 to £156.8million, compared with £163.3million in 2009, on revenue up by 2.8% at £3.1billion.
One-off charges of £17million – relating to the PSN deal and restructuring at the gas turbines division – took a slice out of the profits.
Earnings before interest, tax and amortisation fell 4% to £212.6million, were in line with market forecasts.
Wood Group said it was raising its dividend by 10% after proposing a final payout of 4.7p to bring the full-year figure to 6.8p.
It also said it faced a better trading climate in 2011 as the oil and gas industry increased spending on global exploration and production.
Chief executive Allister Langlands added: “We are well-positioned to take advantage of the improving market conditions and will continue to pursue our strategy of targeted geographic expansion and extended services through organic and acquisition-led growth. Overall, we anticipate good growth over the next few years.”
Wood Group employs more than 29,000 people and operates in 50 countries.
Its production arm generates 47% of its revenue from the UK North Sea, but the addition of PSN in areas such as North America, the Caspian and Russia will reduce its dependence on the UK continental shelf and offer higher margin work.
The sale of the well support arm, which makes electric submersible pumps for maximising oil output, will raise £1.1billion for shareholders and a further £700million for expansion.