Despite a 26% dip in its first-half operating profits, Wood Group has seen a near one-fifth surge in year-on-year revenue, reaching $3 billion (around £2.35bn) at constant currency rates. The upswing in business is attributed largely to robust contract acquisitions across its energy, materials, and projects units.

This positive trajectory has prompted the company to revise its anticipated annual revenues to approximately $6bn (£4.7bn), marking an increase from the prior estimate of $5.7bn (around £4.5bn). This change in forecast is bolstered by strong demand in its carbon capture and hydrogen segment.

The company’s projects division observed 29.6% growth in sales, hitting $1.25bn (£1bn), primarily driven by the chemicals, oil, and gas sectors. This offset the decline from lump sum turnkey activity. As a result, the group’s headline order book rose by 5% since December, approximating $6bn (£4.7bn).

Amid these advancements, Wood Group secured a $250 million (£196m) contract extension in southeast Asia and a partnership with Shell focused on decarbonisation, digitalisation, and asset life extension. The firm also agreed on a $50m (£39m) life sciences engineering deal with pharmaceutical giant GSK.

Despite this progress, the company faced a downturn in operating profits, primarily due to expenses associated with the terminated takeover bid by US private equity firm Apollo and a $20m (£15.7m) write-down for its engineering, procurement, and construction business. Apollo had initially pursued Wood with a bid price of 240p per share, valuing the company at about £2.2bn (£1.7bn), but retracted after deeming the deal not worthy at the offered price.

The firm also announced the retirement of CFO David Kemp, who has served for eight years. Mr Kemp played a pivotal role during his tenure, including overseeing the acquisition of Amec Foster Wheeler and divesting several divisions to alleviate the company’s debt.

The process to appoint a successor has been initiated and Mr Kemp will remain in his role until a successful candidate is in place.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “Despite the reorganisation and restructuring, Wood’s revenue on continuing operations is up on where it was this time last year and today’s results offer some potential for recovery and if executed, better times for shareholders.

“The well-publicised bid by Apollo was arguably a costly and ultimately distracting exercise with the outcome heightening pressure on the board to lay out a vision for the years ahead.

“Key tasks for the incoming CFO will be reducing debt further, improving cash generation and profit margins and the continued streamlining of the business. Positively Wood’s end markets remain robust, but growth will be hard to come by and as a result, self-help remains the main driver for shareholder returns.”

Ken Gilmartin

Expressing confidence, CEO Ken Gilmartin said: “When we announced our growth strategy in November last year, we set out a plan for Wood to deliver on its significant potential, and I am delighted that our results show the clear progress we are making.

“We have made a good start to the year, delivering growth in revenue, EBITDA, headcount and our pipeline, all while furthering our inspiring culture, as evidenced by our highest-ever employee net promoter score.

“As we look ahead, we are confident that our actions, the business model we have implemented and the market growth opportunities to which we have aligned, support the momentum we are building in our business. As such, we are increasing our full year guidance for the year for revenue and EBITDA.”