British energy services firm Wood is to sell its nuclear business for about £250m ($301m) to a subsidiary of US company Jacobs in a drive to reduce its debt.
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The firm made the announcement as it released its half-year results, which showed a rise in pre-tax profit but a fall in revenue.
Wood’s nuclear energy business designs, delivers and maintains nuclear assets for customers primarily in the UK. The deal is subject to approval by the competition and markets authority (CMA).
David Kemp, Wood’s chief financial officer, said: “The sale of our nuclear business follows other recent divestments and marks a significant step towards achieving Wood’s target leverage policy.”
“Although our nuclear business is a strong UK player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business.”
Wood’s revenue fell 2.6 per cent to $4.79bn (£3.96bn) in the six months to 30 June from $4.92bn a year earlier.
The firm’s profit before exceptional items and tax rose 20 per cent to $98m (£81m) in the period from $82m a year previously.
Its pre-taxprofit reached $62.2m in the first half after a loss of $25.3m in the first half of 2018, when profit was impacted by a writedown in the value of its Ethosenergy venture and a subcontractor dispute.
Wood’s debt rose 14 per cent to $1.77bn in the first half from $1.56bn a year earlier. Its aim is to reduce its debt considerably in relation to its adjusted core earnings, which stood at $384m in the first half.
Chief executive Robin Watson said: “Strong margin improvement and profit growth in the first half was led by activities in energy markets in the eastern hemisphere and our environment and infrastructure operations in North America, together with cost synergies.”
“We remain confident in our full year outlook,” he said. The firm expects to increase revenue and earnings and reduce debt. “Looking further ahead, we remain well positioned for growth across the energy and built environment markets.”
US-based law firm Paul Hastings is advising Jacobs on the purchase of Wood’s nuclear arm.
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