John Wood Group CEO Ken Gilmartin. — Bloomberg
EDINBURGH: Scottish engineering company John Wood Group Plc expects an eventual return to positive free cash flow to bolster its share price, which slumped this month following the end of takeover talks.The stock slid about a third this month after engineering firm Sidara ended a months-long bid, citing “rising geopolitical risks and financial market uncertainty”.
Sidara’s decision not to pursue a fourth and final approach came about a year after Apollo Global Management Inc walked away from a possible takeover of Wood.
After Sidara’s decision, Wood’s board said it remained confident in its strategic direction and fundamental prospects.
On Tuesday, the company, which is in the second year of a three-year strategic turnaround, reconfirmed its outlook for 2024 and 2025, including generating “significant” free cash flow next year.
“The return to positive free cash flow is the last piece in our journey,” chief executive officer Ken Gilmartin said.
As the company does that, it will start “to be reflected in investors’ sentiment and share price”, he said.
Negative free cash flow was US$168mil in the first half of the year, down by almost a quarter from the same period a year ago, Wood said in an earnings statement. — Bloomberg
