Shares in Wood, the Aberdeen-based global engineering and consultancy services giant, are up mote than 4% today after it revealed plans to sell its controlling stake in fellow Granite City business Ethos Energy.
It is part of a wider strategic growth drive at London-listed Wood.
The group set up Ethos – a joint venture with German engineering giant Siemens, in 2014 – creating what was billed as a “gas turbines giant”.
Ethos now has 4,000 staff globally.
Wood, which controls 51% of the business, said in a trading update it had launhced a sales process as part of the group’s “strategic delivery”.
In the 2023 financial year, Ethos delivered £23.5 million of earnings before interest, taxes, depreciation and amortisation (Ebitda) for Wood.
Ethos specilialises in rotating equipment for the power, oil and gas and industrial sectors, with offices in Aberdeen, the US, Middle East and Asia-Pacific.
The stake sale is the latest in a series of portfolio shifts for Wood.
These also include the sale of its built environment business for $1.9 billion (about £1.5bn in today’s money) to WSP Global in 2021, with proceeds used to cut debt.
Last year, Wood sold its Gulf of Mexico labour operations to Danos for £13.3m to “enhance the financial flexibility” of the group.
Wood ‘on track’ for financial targets
Wood unveiled the sale as part of a full-year trading update, with the group on track to hit targets as part of an overhauled strategy announced in November 2022.
Chief executive Ken Gilmartin said the firm had shown “clear progress” in areas including revenue, Ebitda, cash generation and order book.
Ebitda was “slightly ahead of guidance” up 9% year-on-year at £329m to £333m.
Last year’s revenue totalled around £4.7bn
Sustainable solutions, which cover a vast range of projects from liquified natural gas and chemicals to renewable energy and hydrogen, now accounts for more than 40% of the firm’s bidding pipeline.
The overall order book now stands at around £4.8bn, which Wood said was up 4% on a comparable basis after the sale of its Gulf of Mexico labour unit.
Wood is due to release its full year results on March 26.
Mr Gilmartin said: “We are now one year into our strategic growth journey and our results continue to show clear progress.
“We have delivered strong revenue and Ebitda growth, improved our underlying cash generation, grown our order book and continue to see an acceleration in the proportion of sustainable solutions within our pipeline.
“We are confident that our actions, business model and strategy are delivering and look forward to giving a further update in March.”
Conversation