Wood Group shares plunge after warning investors of cash flow woes
Shares in Wood Group plunged sharply this morning as the engineering and consultancy group warned investors it would not return to positive free cashflow next year.
In a statement today, the London-listed group said it’s cashflow would return to black in 2024 onwards.
Bosses at the group expect adjusted earnings before interest, depreciation and amortisation (EBITDA) to be “flat in the nearer term” as the company reinvests its cash to “secure growth”.
Shares sank more than 13.5 per cent to 137.75p per share by mid-morning.
“Our turnaround is progressing well,” said CEO Ken Gilmartin. “We have addressed legacy issues and our strong balance sheet will allow us to deal with the defined schedule of resulting cash outflows.
“Our strategy will deliver returns for our shareholders and today we have set out new financial targets, including to grow EBITDA by mid to high single digit constant annual growth rate over the medium term, with momentum building over time as our strategy delivers.”