LSE:WG.

Stock Analysis Report

Executive Summary

John Wood Group PLC, together with its subsidiaries, provides project, engineering, and technical services in energy, industry, and built environment worldwide.

Rewards

Trading at 47.8% below its fair value

Earnings are forecast to grow 30.17% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 7.11% is not well covered by earnings

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has John Wood Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WG. has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.2%

WG.

-7.1%

GB Energy Services

-3.0%

GB Market


1 Year Return

-27.5%

WG.

-26.1%

GB Energy Services

11.0%

GB Market

Return vs Industry: WG. underperformed the UK Energy Services industry which returned -22.6% over the past year.

Return vs Market: WG. underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

WG.IndustryMarket
7 Day-6.2%-7.1%-3.0%
30 Day-3.9%-7.1%-2.4%
90 Day9.3%-2.9%3.9%
1 Year-22.9%-27.5%-22.6%-26.1%16.8%11.0%
3 Year-48.2%-55.0%-51.3%-56.7%20.0%4.7%
5 Year-22.4%-37.0%-29.6%-41.2%38.9%6.8%

Price Volatility Vs. Market

How volatile is John Wood Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is John Wood Group undervalued compared to its fair value and its price relative to the market?

19.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WG. (£3.79) is trading below our estimate of fair value (£7.27)

Significantly Below Fair Value: WG. is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: WG. is poor value based on its PE Ratio (56.8x) compared to the Energy Services industry average (10.3x).

PE vs Market: WG. is poor value based on its PE Ratio (56.8x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: WG. is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: WG. is good value based on its PB Ratio (0.8x) compared to the GB Energy Services industry average (0.9x).


Next Steps

Future Growth

How is John Wood Group forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

18.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WG.'s forecast earnings growth (30.2% per year) is above the savings rate (0.5%).

Earnings vs Market: WG.'s earnings (30.2% per year) are forecast to grow faster than the UK market (11.7% per year).

High Growth Earnings: WG.'s earnings are forecast to grow, but not significantly.

Revenue vs Market: WG.'s revenue (3.3% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: WG.'s revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WG.'s Return on Equity is forecast to be low in 3 years time (8.7%).


Next Steps

Past Performance

How has John Wood Group performed over the past 5 years?

-69.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WG. has a large one-off loss of $111.0M impacting its June 30 2019 financial results.

Growing Profit Margin: WG. became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: WG.'s earnings have declined by -69.5% per year over the past 5 years.

Accelerating Growth: WG. has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: WG. has become profitable in the last year, making it difficult to compare its past year earnings growth to the Energy Services industry (86.1%).


Return on Equity

High ROE: WG.'s Return on Equity (1.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is John Wood Group's financial position?


Financial Position Analysis

Short Term Liabilities: WG.'s short term assets ($4.2B) exceed its short term liabilities ($4.0B).

Long Term Liabilities: WG.'s short term assets ($4.2B) exceed its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: WG.'s debt to equity ratio (68.1%) is considered high.

Reducing Debt: WG.'s debt to equity ratio has increased from 23.3% to 68.1% over the past 5 years.

Debt Coverage: WG.'s debt is not well covered by operating cash flow (9.6%).

Interest Coverage: WG.'s interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: WG. has a low level of unsold assets or inventory.

Debt Coverage by Assets: WG.'s debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

What is John Wood Group's current dividend yield, its reliability and sustainability?

7.07%

Current Dividend Yield


Dividend Yield vs Market

company7.1%marketbottom25%1.9%markettop25%5.1%industryaverage6.5%forecastin3Years7.1%

Current dividend yield vs market & industry

Notable Dividend: WG.'s dividend (7.11%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: WG.'s dividend (7.11%) is in the top 25% of dividend payers in the UK market (4.95%)


Stability and Growth of Payments

Stable Dividend: WG.'s dividend payments have been volatile in the past 10 years.

Growing Dividend: WG.'s dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (405%), WG.'s dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WG.'s dividends in 3 years are forecast to be covered by earnings (62.1% payout ratio).


Next Steps

Management

What is the CEO of John Wood Group's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Robin Watson (51yo)

4yrs

Tenure

US$1,875,000

Compensation

Mr. Robin Watson serves as Chief Operating Officer at Wood Group Mustang, Inc. Mr. Watson served as Chief Executive Officer GE Oil & Gas Pressure Control Canada Inc. since January 1, 2016. He has been Grou ...


CEO Compensation Analysis

Compensation vs Market: Robin's total compensation ($USD2.44M) is about average for companies of similar size in the UK market ($USD2.25M).

Compensation vs Earnings: Robin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.3yrs

Average Tenure

Experienced Management: WG.'s management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

3.9yrs

Average Tenure

53yo

Average Age

Experienced Board: WG.'s board of directors are considered experienced (3.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£36,20029 Aug 19
Robin Watson
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares10,000
Max PriceUK£3.62
BuyUK£35,90029 Aug 19
Jeremy Wilson
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares10,000
Max PriceUK£3.59
BuyUK£2,87228 Jun 19
Jacqueline Ferguson
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares636
Max PriceUK£4.52
BuyUK£6,24221 Jun 19
Robin Watson
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares1,515
Max PriceUK£4.12
BuyUK£3,95121 Jun 19
David Kemp
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares959
Max PriceUK£4.12
BuyUK£2,83021 Jun 19
Bob MacDonald
EntityIndividual
Shares687
Max PriceUK£4.12
BuyUK£76221 Jun 19
Nina Schofield
EntityIndividual
Role
Senior Key Executive
Executive President of HSSEA
Shares185
Max PriceUK£4.12
BuyUK£1,33121 Jun 19
Sue MacDonald
EntityIndividual
Role
Head of Human Resources
Executive President of People & Organisation
Shares323
Max PriceUK£4.12
BuyUK£3,32921 Jun 19
Dave Stewart
EntityIndividual
Shares808
Max PriceUK£4.12

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14%.


Management Team

  • Tony Dinozzi

    Group Head of M&A

    • Tenure: 20yrs
  • Robin Watson (51yo)

    CEO & Executive Director

    • Tenure: 4yrs
    • Compensation: US$1.88m
  • David Kemp (48yo)

    CFO & Executive Director

    • Tenure: 4.7yrs
    • Compensation: US$1.13m
  • Nina Schofield

    Executive President of HSSEA

    • Tenure: 5.4yrs
  • Sue MacDonald

    Executive President of People & Organisation

    • Carl Catfield

      Group Head of Treasury & Taxation

      • Tenure: 13.4yrs
    • Martin McIntyre

      General Counsel & Company Secretary

      • Tenure: 4yrs
    • Andrew Rose

      Head of Investor Relations

      • Ann Massey

        President of Corporate Development

        • Tenure: 0.2yrs
      • Darren Martin

        Chief Technology Officer

        • Tenure: 1.5yrs

      Board Members

      • Jeremy Wilson (54yo)

        Senior Independent Director

        • Tenure: 0.3yrs
        • Compensation: US$60.50k
      • Roy Franklin (66yo)

        Independent Chairman of the Board

        • Tenure: 0.3yrs
        • Compensation: US$60.50k
      • Robin Watson (51yo)

        CEO & Executive Director

        • Tenure: 4yrs
        • Compensation: US$1.88m
      • Mary Shafer-Malicki (58yo)

        Non-Executive Director

        • Tenure: 7.6yrs
        • Compensation: US$55.50k
      • David Kemp (48yo)

        CFO & Executive Director

        • Tenure: 4.7yrs
        • Compensation: US$1.13m
      • Adrian R. Marsh (52yo)

        Non-Executive Director

        • Tenure: 0.7yrs
      • Tom Botts (64yo)

        Non-Executive Director

        • Tenure: 7yrs
        • Compensation: US$60.50k
      • Jacqui Ferguson (49yo)

        Non-Executive Director

        • Tenure: 3.1yrs
        • Compensation: US$55.50k

      Company Information

      John Wood Group PLC's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: John Wood Group PLC
      • Ticker: WG.
      • Exchange: LSE
      • Founded:
      • Industry: Oil and Gas Equipment and Services
      • Sector: Energy
      • Market Cap: UK£2.554b
      • Shares outstanding: 673.84m
      • Website: https://www.woodgroup.com

      Number of Employees


      Location

      • John Wood Group PLC
      • 15 Justice Mill Lane
      • Aberdeen
      • Aberdeenshire
      • AB11 6EQ
      • United Kingdom

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      WDGJ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2002
      WG.LSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 2002
      JWG1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2002
      WGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 2002
      WDGJ.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

      Biography

      John Wood Group PLC, together with its subsidiaries, provides project, engineering, and technical services in energy, industry, and built environment worldwide. It operates through five segments: Asset Solutions Europe, Africa, Asia, Australia; Assets Solutions Americas; Specialist Technical Solutions; Environment and Infrastructure Solutions; and Investment Services. The company offers engineering, fabrication and construction, and bundled services; commissioning and decommissioning services; and operations and maintenance services. It also provides scaffolding, rope access, thermal insulation and industrial painting, specialist construction and civils, asbestos remediation, mechanical, and piping support services, as well as electrical, control, and instrumentation. In addition, the company offers project management, EPC/EPCM project, and construction and field services; environment and infrastructure solutions, including environmental studies, permitting and compliance, environmental remediation, public infrastructure, geotechnical and materials, and engineering and construction services. Further, it provides clean energy solutions, such as engineering, design, and project management; analytics, technology, and laboratories; safety licensing and regulatory; and plant operations and life extension services. Additionally, the company offers mineral resources and project assessments, mine planning and design, mineral processing and metallurgy, and material handling; and information management, IoT and connected devices, software and applications and analytics, visualization, and digital project delivery, as well as automation and control, and consulting solutions. The company also provides subsea and export systems comprising operational support and integrity; engineer, procure, and fabricate; flow assurance; subsea, umbilical, riser, and flowline; and pipelines and marine terminals. John Wood Group PLC is based in Aberdeen, the United Kingdom. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 20:44
      End of Day Share Price2020/01/27 00:00
      Earnings2019/06/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.