Wood to clamp down on costs but recruitment drive continues including in Aberdeen

Unveiling solid full-year results that also included an upgraded earnings outlook for both 2024 and the medium term, chief executive Ken Gilmartin said the group was continuing to recruit, including taking on about 200 roles in its home city.

The simplification programme is targeting annualised savings of around $60 million (£47.4m) from 2025, with an initial focus on central costs. That will include reducing the number of central function roles. The results for 2023 showed that the group’s overall headcount grew by 1 per cent last year, excluding the Gulf of Mexico business, to just over 35,300.

Gilmartin said: “We are making changes. We are not downsizing. This will focus on enhancing the quality of our business including addressing IT and real estate costs, though there will be a reduction in some of the overhead functional positions. On the flipside, we are still very much recruiting.

“We are currently recruiting more than 500 new roles in the UK with 200 of those in Aberdeen. These are high value technical engineering and consulting roles to support our clients in the UK and around the world. Overall, our headcount is going to increase this year.”

The 2023 results were largely in line with a trading update issued in January and showed that revenues had risen by 8.7 per cent on a constant currency basis to just over $5.9 billion (£4.7bn), while adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) came in at $423m, up by 10.9 per cent at constant currencies.

Gilmartin added: “We have delivered really strong growth in the first year of our strategy - our earnings, our order book, our pipeline are all up in 2023. We have seen broad-based growth across our three business sectors - led by consulting but also projects, and operations and maintenance. We have seen geographic growth including the UK and significant growth in sustainable solutions, amid the drive to decarbonisation and energy transition.

“We are upgrading our outlook, with 2024 guidance now towards the top end of our medium-term targets and 2025 expected to exceed those targets.”

The results come after US private equity suitor Apollo Management dropped its proposed takeover of Wood last May. Apollo had put forward a series of bid proposals, with the last one for 240p a share in cash, valuing the Scots group at almost £1.7bn. Its shares have had a rocky rise since.

Stuart Lamont, investment manager at wealth manager RBC Brewin Dolphin, said: “There is a degree of pressure on Wood to deliver after knocking back bids to take the company private last year. Wood has come out fighting and there are some tentative reasons for optimism with the company’s guidance upped for the year ahead. Wood has been a company in transition for some time now - there is some good news today, but it will likely take much more of a catalyst to get the share price heading in a more positive direction.”