John Wood Group (WG) H2 2024 earnings summary

Executive summary

• Faced a highly challenging year with performance below expectations, significant contract losses, and a weak macro environment, compounded by material weaknesses in financial controls and culture identified by an Independent Review.

• Revenue (pre-exceptional) declined 1% to $5.49bn, with growth in Operations offset by declines in Consulting and Projects; adjusted EBIT fell 52% to $81m, and adjusted EBITDA dropped 25% to $285m.

• A $2.2bn impairment of goodwill and intangibles, $425m in exceptional charges, and a $153m free cash outflow led to a statutory loss per share of $4.03.

• The Board commissioned an Independent Review, resulting in restatements of prior year results, leadership changes, and a comprehensive remediation plan.

• Sidara made a conditional acquisition offer at 30p per share, including a $450m capital injection, seen as critical for refinancing and future stability.

Financial highlights

• Revenue (pre-exceptional) down 1% year-over-year to $5.49bn; statutory revenue down 6% to $5.2bn.

• Adjusted EBIT fell 52% to $81m; adjusted EBIT margin dropped to 1.5% from 3.0%.

• Adjusted EBITDA down 25% to $285m, impacted by $55m of non-exceptional Independent Review charges and $46m of contract losses.

• Operating loss of $2.63bn, driven by $2.2bn goodwill/intangible impairment and $425m exceptional charges.

• Free cash outflow improved to $153m (2023: $313m outflow), but net debt (ex-leases) remained high at $683m.

• Adjusted diluted EPS was a loss of 14.1c; basic loss per share was 403c.

Outlook and guidance

• Future cash generation expectations have been lowered due to weaker trading, working capital challenges, and increased advisor costs.

• The Sidara acquisition, if completed, will provide a $450m capital injection and extend debt maturities to 2028, but material uncertainties remain until completion.

• The company is focused on executing its strategy, improving financial culture, and delivering value for shareholders, but requires substantial new capital and a time-critical refinancing solution.