Aberdeen company Wood has unveiled a strategy “refresh” and boss Ken Gilmartin says the Granite City and wider north-east will be at the heart of it.
The global engineering and consulting firm is adopting a “tighter focus”, targeting priority markets across energy and materials that “best match our competitive strengths”.
Shareholders were unimpressed by a capital markets day statement and trading update from the group today.
Wood revealed a drop in revenue, sending its London-listed stock plunging nearly 16% to £1.34.
Mr Gilmartin, who took over as chief executive of the global engineering and consulting firm earlier this year, said the type of “ lower risk, reimbursable” projects likely to deliver better profits and returns for shareholders could be anywhere – wherever the company can apply its expertise.
Work that fits the bill on the Aberdeen-headquartered firm’s doorstep definitely appeals, he said.
North-east opportunities
Several large energy transition projects planned for the north-east are on Wood’s radar.
The company has already been involved in engineering, process design and construction planning for Acorn, the carbon capture and storage (SSC) plant proposed for St Fergus gas plant, near Peterhead.
Acorn lost out in the first phase of Westminster’s £1 billion CCS development fund, instead being relegated to a “reserve” cluster.
If the project is given the green light in a much-awaited “track two” phase, it will mean more opportunities for contractors.
Likewise, high-profile plans to make Aberdeen a hydrogen “hub” in Scotland’s race towards net-zero carbon emissions would require the kind of “world-leading” expertise
Mr Gilmartin was keen to highlight after Wood announced its “refreshed strategy”.
The company’s north-east heritage a key part of that, he told The Press and Journal.
Wood’s CEO said: “Our base in Aberdeen is very important to us, and it’s equally important to be able to showcase our expertise on our doorstep.”
‘World-class talent”
The firm will steer clear of projects involving significant risk but there are many opportunities, locally and globally, to apply its front-end design and consulting capability, he said.
He added: “It is our ability to deploy that world-class talent and come up with solutions for complex projects that will be important to us going forward.
“We are building on very strong foundations and that started in Aberdeen. We employ over 1,000 people in the city and are recruiting more.
“Aberdeen is central to the future of Wood but we are also a global company, employing some of the best and brightest minds to give us the technical resources we need as a global player.”
The group has taken on “somewhere in the region of 3,000” new recruits this year and is currently advertising for another 2,000 globally, he said.
‘Huge potential’
Announcing the new strategy and medium-term targets, including an ambition to grow earnings before interest, taxes, depreciation, and amortisation (Ebitda) by a “mid-to-high single digit” figure annually, Mr Gilmartin said: “There is huge potential in
Wood.
“We have over 35,000 highly skilled colleagues, long-term client relationships and leading engineering and consulting capabilities.
“We are now taking a more focused approach to growth, targeting specific priority markets across energy and materials that best match our competitive strengths.
“This tighter focus will help ensure we can grow both profitably and sustainably.”
Our turnaround is progressing well, accelerated by the sale of Built Environment Consulting and helped by the work done to focus the group on lower risk, reimbursable work.”
Reporting on recent trading, Wood, which recently completed the sale of its built environment consulting business to Canadian company WSP Global, for £1.5bn, said full-year revenue was likely to be between £4.3bn and nearly £4.6bn.
Adjusted Ebitda for 2022 is expected to be “broadly around the middle of our guidance range” of £307.8million and £332.8m.
The revenue forecast will deliver a result significantly worse than in 2021, when sales came in at £5.33m.
Unfavourable currency exchange rates have had a £166m impact in 2022, Wood said.
Mr Gilmartin added: “Our turnaround is progressing well, accelerated by the sale of Built Environment Consulting and helped by the work done to focus the group on lower risk, reimbursable work.”
Wood said it had tackled “legacy issues”, including its recent settlement of a lawsuit involving Amec Foster Wheeler, which it acquired in 2017, for about £96m, and expected to report net debt of £292m-£333.5m at the end of 2022.
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