Aberdeen's Wood kicks off review of business division with 7,000 workers

Wood, the Aberdeen-headquartered energy and engineering services giant, has kicked off a review that could lead to the sale of a part of its business employing some 7,000 people.

The group said it had initiated a strategic review of its built environment consulting operation, which provides consulting and engineering services that focus on “environmental risks, increase climate resilience, help to build more sustainable infrastructure and improve mobility”.

Wood noted that the business operates across government, transportation, water, industrial, energy and mining markets and has a track record of “attractive growth and resilient performance” throughout the pandemic.

In 2021, the part of the business that services the built environment end market is expected to account for some $1.3 billion (£1bn) of gross revenue within the group’s consulting business unit. It has about 7,000 staff, with some 6,000 in the US and Canada and the remainder largely in the UK.

Wood, the Aberdeen-headquartered energy and engineering services group, is headed by chief executive Robin Watson.

Wood, which is led by chief executive Robin Watson, told investors: “A growing order book and exposure to both government stimulus for infrastructure development and the drive for sustainability and climate resilience, most notably in North America and the UK, positions the business well for future growth.

“The scope of the review will consider a range of options to best unlock value from this part of the business for shareholders that Wood believes is not currently being recognised in its market capitalisation.

“It will also assess how best to take advantage of the positive trends and investment opportunities in energy transition and industrial decarbonisation where the company is already a global leader.”

News of the review came as the group flagged a “backdrop of improving momentum” in many of its markets following the “challenging market conditions created by the impact of Covid-19”.

Overall, the firm expects to deliver improved revenue and earnings in the second half of 2021 relative to the first half.

But it noted: “While we are seeing robust activity in consulting and operations, the rate of recovery in projects has been slower than anticipated largely due to the deferral of activity and awards into 2022.”

Full-year revenue is expected to be about $6.4bn, which is down on the $6.6bn to $6.8bn flagged in August. Adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) margin is expected to be 8.5 per cent to 8.7 per cent, against a previously guided range of 8.7 per cent to 8.9 per cent.

Wood employs around 40,000 people in more than 60 countries.

In August, the group posted a fall in first-half revenues after taking a hit from the pandemic but flagged a solid order book as it transitions away from oil and gas.

The firm posted a 23 per cent slump in turnover to just under $3.2bn for the six months to the end of June. It blamed the ongoing impact from the Covid-19 crisis, as well as a $74 million loss of revenues from the sale of parts of the business. This left the group with bottom-line losses of around $11m, broadly in line with a year ago.

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