PUNT OF THE WEEK: Engineering firm Wood Group has posted an impressive trading update


PUNT OF THE WEEK: Engineering firm Wood Group has posted an impressive trading update

Wood Group provides services to oil and energy companies, overseeing everything from pipelines to tidal energy generators

Wood Group provides services to oil and energy companies, overseeing everything from pipelines to tidal energy generators

What is it?

An engineering firm, it mainly provides services to oil and energy companies, overseeing everything from pipelines to tidal energy generators. 

Based in Aberdeen, Wood Group operates in around 60 countries and employs about 60,000.

What’s the latest?

In a trading update last month, it said performance was ahead of the previous year. Two brokers upgraded their expectations, and the firm also expects to cut around £47million of costs.

Who backs it?

Wood Group’s share register is full of major City investors, including Blackrock, Aberdeen Standard Investments and Fidelity International.

Why you should invest

Graham Spooner, investment analyst at The Share Centre, notes that Wood Group has an order book of over £7billion. 

The recent acquisition of Amec provides exposure to renewables, and a third of the company’s business is now in areas away from oil and gas.

And why you shouldn’t

However, Spooner adds, debt levels have risen to £1.3billion. The oil price is also likely to be volatile, given the stand-off between the US and Iran.

 



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