Wood Group's strategy to focus more on its positions in engineering, production facilities support and gas turbine services seems to be paying off, after the group reported strong growth in both profits and revenues in 2011.
Profit from continuing operations before tax and exceptionals increased 62.7% to $254.1m, compared with $156.2m the year before. 'Continuing operations' include PSN since the acquisition in January 2011 and excludes the Well Support division which was disposed of in February.
Total revenue rose by 19.5% from $5,063.1m to $6,052.3m, which includes Well Support activity up to the date of disposal. Revenue from continuing operations increased by 38.7% from $4,085.1m to $5,666.8m.
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The group said that the integration of the PSN acquisition with its Production Facilities business (creating Wood Group PSN) is on track to deliver the estimated synergies and PSN has performed ahead of expectations, helped by the strength in activity in the North Sea and North America.
In Engineering, increased activity in upstream and subsea and pipelines led to higher revenues and improved margins. While its third division, Wood Group GTS, saw strong growth in its Maintenance and Power Solutions businesses.
The total dividend was raised by 22.7% to 13.5 cents per share, up from 11 cents per share previously.
The firm closed the period with net debt of just $3.9m, well down from the $15.1m reported the year before.
The group foresees further growth in upstream, subsea and pipelines in 2012, but says that in downstream, process and industrial, the performance is likely to be flat due to the ongoing weakness in the market in North America. The current order book represents around eight months of forecast revenue.
BC
