Updating shareholders yesterday, the company – run by chief executive Bob Keiller – said its performance for 2014 would be up on the previous 12 months, led by growth in its PSN Production Services division. This is being driven by activity in North America, where the group is increasingly involved in higher-margin shale work.
While its engineering unit continues to be hampered by slower upstream activity, this is being partially offset by bigger contributions from its subsea and downstream divisions.
“We are confident of an improvement in cash generated from operations in the second half,” the firm said. “The balance sheet remains strong and provides a good platform for organic and acquisition-led growth.”
Investors were relieved by what one analyst described as the group’s “comfortingly consistent” message. Sentiment towards the offshore sector has weakened amid the recent sharp fall in oil prices.
Shares in Wood Group rose as much as 4 per cent yesterday before settling back to close 2 per cent higher at 692p. Meanwhile, shares in Aim-listed Ithaca Energy fell 6.5 per cent after the exploration firm warned that full-year production would fall short of previous forecasts.