TIDMWG.
RNS Number : 5540J
Wood Group (John) PLC
20 August 2019
20 August 2019
Half year results for the six months ended 30 June 2019
Strong margin improvement and profit growth supports unchanged
full year outlook
Agreed sale of nuclear business for 12.4x EBITDA will deliver
target disposal proceeds to enable significant deleveraging
Interim Interim
2019 2018
Movement
Six months ended 30 June $m $m %
------------------------------------ ------- ------- --------
Revenue (1) 4,788 4,916 (2.6)%
------------------------------------ ------- ------- --------
Adjusted EBITDA (excluding impact
of IFRS 16)(1) 314 293 7.2%
------------------------------------ ------- ------- --------
Adjusted EBITDA Margin (excluding
impact of IFRS 16) 6.6% 6.0% 0.6%
------------------------------------ ------- ------- --------
Like for like adjusted EBITDA
(excluding impact of IFRS 16) 314 280 12.1%
------------------------------------ ------- ------- --------
Operating profit before exceptional
items (excluding impact of IFRS
16)(1) 160 125 28.0%
------------------------------------ ------- ------- --------
Adjusted EBITDA(1,2) 384 293 n/a(2)
------------------------------------ ------- ------- --------
Adjusted EBITDA Margin 8.0% 6.0% n/a(2)
------------------------------------ ------- ------- --------
Operating profit before exceptional
items(1) 168 125 n/a(2)
------------------------------------ ------- ------- --------
Operating profit 139 24 479.2%
------------------------------------ ------- ------- --------
Profit/(loss) for the period 13 (52) n/a
------------------------------------ ------- ------- --------
Basic EPS 2.1c (7.9)c n/a
------------------------------------ ------- ------- --------
Adjusted diluted EPS(1) 18.2c 18.4c (1.1)%
------------------------------------ ------- ------- --------
Interim Dividend 11.4c 11.3c 0.9%
------------------------------------ ------- ------- --------
Net debt excluding leases(3) 1,773 1,555 14.0%
------------------------------------ ------- ------- --------
Order book(4) 9,188 9,408 (2.3)%
------------------------------------ ------- ------- --------
"Strong margin improvement and profit growth in the first half
was led by activities in energy markets in the eastern hemisphere
and our environment and infrastructure operations in North America,
together with cost synergies. We also made substantial progress on
our non core asset disposal programme and have agreed the sale of
our nuclear business for c$305m, with completion anticipated in Q1
2020. This will result in significant deleveraging and bring us
close to our target leverage. With 87% of 2019 revenues delivered
or secured we remain confident in our full year outlook and
guidance is unchanged. Looking further ahead, we remain well
positioned for growth across the energy and built environment
markets."
Robin Watson, Chief Executive
H1 Financial performance
-- Revenue of $4.8bn reflects relatively robust activity levels
with growth in built environment activity in E&IS offset
by lower revenues in ASEAAA and STS
-- Strong EBITDA and operating profit growth. In line with
guidance, pre-IFRS 16 adjusted EBITDA increased by 7% and
pre-IFRS 16 operating profit before exceptionals by 28%
-- Pre IFRS 16 adjusted EBITDA margin improved to 6.6%, driven
by improved execution, sales mix and cost synergies of c$30m
-- On a like for like basis, adjusting for disposals executed
in 2019, pre IFRS 16 adjusted EBITDA of $314m was up 12%
and adjusted EBITDA margin was up 90 basis points
-- The positive impact of the adoption of IFRS 16 on adjusted
EBITDA was $70m, lower than originally anticipated
-- Operating profit before exceptionals (including the impact
of IFRS 16) was $168m after amortisation charges of $119m,
depreciation of $88m and interest and tax on joint ventures
of $9m
-- Profit for the period of $13m includes the impact of post
tax exceptional costs of $47m ($29m pre-tax), related to
cost synergy delivery, investigation support costs and loss
on disposal of TNT
-- Agreed sale of nuclear business for c$305m (c12.4x 2018
EBITDA). Closing anticipated in Q1 2020 will accelerate
progress to target leverage
-- Net debt at 30 June of $1.77bn was adversely impacted by
two cash receipts totalling $130m anticipated in June but
received in early July (Net debt : adjusted EBITDA pre IFRS
16 of 2.5x(5) ). No change to full year expectations on
cash generation.
-- Proposed interim dividend of 11.4c, up 1% in line with progressive
dividend policy
Operations
-- From revenue of $4.8bn, delivered significant growth in
adjusted EBITDA and operating profit with improved margins
across energy and built environment markets, driven by:
o Increased upstream oil & gas activities in energy
markets and improved delivery and sales mix in ASEAAA
o Improved Turbine JV performance in ASEAAA
o Higher activity and good delivery in the built environment
market in the Americas for E&IS
o Further cost synergies of c$30m
Outlook for FY 2019
-- Full year outlook is unchanged
-- Order book of $9.2bn up on December 2018 of $9.1bn on a
like for like basis. Good visibility over forecast 2019
revenues with 87% delivered or secured
-- Growth in FY 2019 revenue in the region of 5% driven by:
o Capital projects activity in downstream & chemicals
and onshore midstream in ASA
o Operations solutions work in the Middle East and
Asia Pacific
o Continued strength in built environment activity
in the Americas
-- Anticipated revenue growth together with cost synergies
of c$60m, improved sales mix and delivery, and our typical
H2 earnings weighting is expected to deliver full year
adjusted EBITDA in line with market expectations of adjusted
EBITDA growth of c8% (excluding the impact of IFRS 16)6
-- The positive impact of the adoption of IFRS 16 on adjusted
EBITDA for the full year is now expected to be $143m. This
is a reduction of $27m from our previous estimate of c$170m.
There is no change to our expectations for underlying earnings
growth
-- Expect strong full year cash conversion to deliver modest
reduction in net debt from the 31 December 2018 position
-- Disposal of nuclear business to reduce net debt on a proforma
basis close to 1.5x net debt : adjusted EBITDA pre-IFRS
16 target leverage on closing, in Q1 2020
Notes:
1. As disclosed at the full year results in March, Wood has
simplified its reporting for the periods ending on 30 June 2019
onwards. These changes align Wood's principal reporting metrics
with IFRS measures and facilitate comparison across peers. There is
no reduction in the level of accounting disclosure at the Wood or
business unit level. At the Group level, the results from joint
ventures are accounted for in line with IFRS using the equity
method and are no longer reported on a proportionally consolidated
basis. Wood's primary reporting metrics are Revenue, aligned with
the IFRS definition, and Operating Profit (pre-exceptional
items).
Adjusted EBITDA (pre-exceptional items, including Wood's share
of joint venture EBITDA) is adopted as an additional non-statutory
/'non-GAAP' measure of profit. This is presented at the Group and
Business Unit level to report underlying financial performance and
facilitate comparison with peers.
Adjusted Diluted EPS is also presented, defined as "earnings
before exceptional items and amortisation relating to acquisitions,
net of tax, divided by the weighted average number of ordinary
shares in issue during the period". In contrast to previous
reporting, the measure is stated before amortisation arising from
acquisitions only and not amortisation relating to other
intangibles such as software costs.
Comparative figures for 2018 are shown on the same basis.
2. We have chosen to apply the modified retrospective approach
to the adoption of IFRS 16 and as such there is no restatement of
2018 comparatives in 2019. The movements between 2019 metrics and
2018 comparatives that have not been restated are shown as not
applicable (n/a).
3. Net debt at 30 June 2019 is stated excluding liabilities
related to leases. The adoption of IFRS 16 has resulted in an
increase in net debt at 30 June 2019 due to the recognition of a
lease liability on the balance sheet of $582m.
4. Order book comprises revenue that is supported by a signed
contract or written purchase order for work secured under a single
contract award or frame agreements. Work under multi-year
agreements is recognised in order book according to anticipated
activity supported by purchase orders, customer plans or management
estimates. Where contracts have optional extension periods, only
the confirmed term is included. Order book disclosure in H1 2019 is
aligned with the IFRS definition of revenue and no longer includes
Wood's proportional share of joint venture order book. Order book
for H1 2018 is presented on a like for like basis and no longer
includes Wood's proportional share of joint venture order book and
excludes businesses disposed. Order book at 31 December 2018 on
this basis was $9.1bn.
5. Net debt : adjusted EBITDA ratio is calculated on the
existing basis prior to the adoption of IFRS 16 in 2019.
6. Company compiled, publicly available consensus comprises
seven analysts who have published estimates since our 2019 results
announcement on 19 March 2019 that reflect both changes to our
reporting metrics and the impact of IFRS 16: JP Morgan Cazenove,
Barclays, Goldman Sachs, RBC, Bank of America Merrill Lynch, Morgan
Stanley, UBS, Redburn, Jefferies and HSBC.
Consensus adjusted EBITDA, includes an estimated impact of IFRS
16 of c$170m and is $919m (Range: $889m-$948m). Growth in consensus
underlying adjusted EBITDA, excluding the impact of IFRS 16 is c8%.
Consensus Operating Profit (pre exceptional items) is $447m (Range:
$413m-$491m) and Consensus AEPS is 53.2c (Range 46.0c-64.5c).
(https://www.woodplc.com/investors/analyst-consensus-and-coverage)
Wood is a global leader in the delivery of project, engineering
and technical services in energy, industry and the built
environment. We operate in more than 60 countries, employing around
60,000 people, with revenues of around $11 billion. We provide
performance-driven solutions throughout the asset life-cycle, from
concept to decommissioning across a broad range of industrial
markets including the upstream, midstream and downstream oil &
gas, power & process, environment and infrastructure, clean
energy, mining, nuclear and general industrial sectors.
www.woodplc.com
Wood
Andrew Rose - Group Head of Investor
Relations 01224 532 716
Ellie Dixon - Investor Relations
Senior Manager 01224 851 369
Citigate Dewe Rogerson
Kevin Smith 020 7638 9571
Chris Barrie
There will be an analyst and investor presentation at the London
Stock Exchange, 10 Paternoster Square, EC4M 7LS at 09.00. Early
registration is advised from 08.30. A live webcast of the
presentation will be available from
https://www.woodplc.com/investors/financial-events-calendar. Replay
facilities will be available later in the day.
Business Review
Interim
Interim
2019 2018
Movement
Six months ended 30 June $m $m %
------------------------------------ ------- ------- --------
Revenue (1) 4,788 4,916 (2.6)%
------------------------------------ ------- ------- --------
Adjusted EBITDA (excluding impact
of IFRS 16)(1) 314 293 7.2%
------------------------------------ ------- ------- --------
Adjusted EBITDA Margin (excluding
impact of IFRS 16) 6.6% 6.0% 0.6%
------------------------------------ ------- ------- --------
Like for like adjusted EBITDA
(excluding impact of IFRS 16) 314 280 12.1%
------------------------------------ ------- ------- --------
Operating profit before exceptional
items (excluding impact of IFRS
16)(1) 160 125 28.0%
------------------------------------ ------- ------- --------
Adjusted EBITDA(1,2) 384 293 n/a(2)
------------------------------------ ------- ------- --------
Adjusted EBITDA Margin 8.0% 6.0% n/a(2)
------------------------------------ ------- ------- --------
Operating profit before exceptional
items(1) 168 125 n/a(2)
------------------------------------ ------- ------- --------
Operating profit 139 24 479.2%
------------------------------------ ------- ------- --------
Profit/(loss) for the period 13 (52) n/a
------------------------------------ ------- ------- --------
Basic EPS 2.1c (7.9)c n/a
------------------------------------ ------- ------- --------
Adjusted diluted EPS(1) 18.2c 18.4c (1.1)%
------------------------------------ ------- ------- --------
Interim Dividend 11.4c 11.3c 0.9%
------------------------------------ ------- ------- --------
Net debt excluding leases(3) 1,773 1,555 14.0%
------------------------------------ ------- ------- --------
Order book(4) 9,188 9,408 (2.3)%
------------------------------------ ------- ------- --------
Trading performance
Our activities address four main markets; upstream &
midstream (c40%), downstream & chemicals (c20%), renewables,
other energy & industrial (c25%) and the built environment
(c15%). Revenue of $4.8bn was down 2.6% and reflects relatively
robust activity levels with growth in E&IS being offset by
lower revenues in ASEAAA and STS.
Growth in adjusted EBITDA and operating profit before
exceptional items has been led by ASEAAA where we have seen
improved delivery and revenue mix, together with stronger
performance in our turbine joint ventures. Elsewhere, we benefitted
from higher activity and good delivery in the built environment
market in the Americas for E&IS. We also delivered further cost
synergies of $30m.
Adjusted EBITDA of $384m includes the positive impact of $70m
from the adoption of IFRS 16. Adjusted EBITDA excluding the impact
of IFRS 16 was up 7.2% and reflects significant underlying margin
improvement.
Operating profit before exceptional items of $168m includes an
$8m positive impact from the adoption of IFRS 16. Excluding this
impact, operating profit before exceptional items increased 28%
driven by strong growth in EBITDA together with a reduction in
depreciation (pre-IFRS 16) and amortisation of $12m. The reduction
in amortisation of $6m reflects the full amortisation of goodwill
and intangibles on previous bolt on acquisitions in the Americas,
partly offset by higher software amortisation.
Growth in adjusted EBITDA and operating profit before
exceptional items has been achieved despite the impact of completed
disposals which generated adjusted EBITDA of $13m in H1 2018 and
made nil contribution in H1 2019. We also saw a net increase in
central costs, driven by fluctuations in the discount rate
applicable to asbestos liabilities. Central costs benefitted from a
c$10m asbestos net credit in H1 2018 compared to a c$7m net cost in
in H1 2019.
It is important to note the strength of our EBITDA growth and
margin improvement in our business on a like-for-like basis.
Excluding revenue of $20m (H1 2018: $19m) from the TNT and legacy
AFW power machinery businesses disposed, and EBITDA of those
entities together with the EBITDA impact of our joint venture
interests in Voreas and other infrastructure assets disposed
totalling nil (H1 2018: $13m), pre-IFRS 16 adjusted EBITDA was up
12% and pre IFRS 16 adjusted EBITDA margin was up 90 basis
points.
Profit for the period of $13m includes the impact of exceptional
costs of $29m before tax. As anticipated, these comprise $11m of
costs to deliver synergies, $9m in respect of investigation support
costs and a loss on disposal of $9m.
Interim dividend
We have declared an interim dividend of 11.4 cents per share
which will be paid on 26 September 2019 to shareholders on the
register on 30 August 2019. This is an increase of 1% in line with
our progressive dividend policy.
Net debt and cashflow
Net debt (excluding liabilities related to leases) at the end of
June was $1.77bn. The first half working capital movement was
impacted by a delay in two cash receipts in ASA totalling c$130m.
These receipts were expected at the end of June but were received
in early July and contributed to a net working capital outflow in
H1 of $140m. The working capital movement includes the impact of
the receivables facility, drawn at $192m at 30 June 2019. This
resulted in cash generated from operations excluding the impact of
IFRS 16 of $28m (including IFRS 16: $107m). Net debt (excluding
liabilities related to leases) at 30 June reflects the final
dividend payment of $159m in May, exceptional items of $30m, cash
outflows on Aegis of $28m and capex, tax and interest costs.
The ratio of net debt (excluding the impact of IFRS 16) to
trailing twelve month adjusted EBITDA pre IFRS 16 at 30 June 2019
was 2.5x (H1 2018: 2.4x).
There is no change to our expectations on cash conversion. We
continue to expect strong full year cash conversion after
exceptional items in the region of 80-85% (on a pre-IFRS 16 basis).
Operational cash generation will be weighted to H2 in line with our
earnings, and exceptional costs and settlement of provisions are
expected to continue to roll off on a straight line basis. We also
anticipate an overall working capital inflow for the full year.
Full year cash performance is expected to deliver a modest
reduction in net debt compared to the 31 December 2018
position.
Looking further ahead we expect combined cash outflows on
exceptional costs and Aegis to reduce significantly to around $60m
in total in 2020. The agreed sale of our nuclear business due to
complete in Q1 2020 will bring us very close to our target
leverage.
We remain committed to a strong balance sheet and achieving our
target leverage of 1.5x net debt to adjusted EBITDA on a pre-IFRS
16 basis. Debt reduction and the maintenance of our progressive
dividend policy remain our preferred uses of cash.
Financing
Following a part refinancing of our existing term loan facility
due to mature in October 2020 of $140m in Q1 2019, we secured $364m
from US private placement providers in June which was drawn down in
July. This extends the maturity of our debt profile with the
majority comprising a mix of seven to 12 year redemption dates at a
fixed rate of around 5%. The part refinancing has no material
impact on our expectations for the full year interest expense.
Disposals
As announced in the full year results, following a strategic
view of our portfolio we identified a number of potential disposals
expected to generate between $200m and $300m in proceeds. Today we
announced the sale of our nuclear business for a consideration of
c$305m, representing a multiple of c12.4x 2018 EBITDA. Closing is
subject to competition approvals and other conditions precedent
typical for a transaction of this nature and is currently
anticipated by Q1 2020. The disposal marks a significant step
towards achieving our target leverage and is expected to reduce net
debt on a proforma basis close to our target of 1.5x Net Debt:
adjusted EBITDA pre-IFRS 16. This follows other recent successful
asset disposals including the TNT materials handling business in
May 2019 for a consideration of $41m. We continue to strategically
review our portfolio.
Order book
Our order book comprises secured work and estimates of activity
under long term agreements. To align with our reporting metric for
revenue, our order book disclosure is now presented excluding joint
ventures. Order book at 30 June 2019 excluding joint ventures was
$9.2bn, slightly up on the like for like position (excluding joint
ventures and businesses disposed) at December 2018 which was
$9.1bn. The reduction of 2.3% compared to 30 June 2018 reflects the
early stage and smaller scale work coming to market in oil &
gas, the completion of larger coal combustion projects in Asset
Solutions Americas and certain capital projects in Environment and
Infrastructure Solutions being worked off including Space Fence,
which completed during 2018.
With c$4.3bn of order book to be delivered in 2019, 87% of 2019
forecast revenues are delivered or secured, giving us confidence in
delivering revenue growth in the region of 5% in 2019.
The shape of our order book reflects the nature of our short
cycle business and our measured risk approach; with reimbursable
work being the largest element at c75%.
Adoption of IFRS 16
IFRS 16 Leases became effective on 1 January 2019. The most
significant change for Wood is the accounting for property leases.
Rental charges that were previously recorded in operating costs in
respect of these leases will now be replaced with depreciation and
an interest charge. We have applied a modified retrospective
approach on adoption of IFRS 16 and there is no restatement of 2018
comparatives in 2019. In the first half, adjusted EBITDA increased
by $70m due to these accounting changes. We currently expect the
full year impact to be $143m which is a reduction of $27m from our
previous estimate of c$170m. Operating profit for the full year is
expected to increase by c$19m. A lease liability has been
recognised on the balance sheet at 30 June 2019 of $582m. All
financing covenants are set on a frozen GAAP basis and are not
impacted by the adoption of the standard.
Update on regulatory investigations
There have been no material developments in the previously
disclosed investigations in the UK and US, details of which are
included in the contingent liabilities note to the Interim
Financial Statements. Wood continues to cooperate with and assist
the relevant authorities in relation to their respective
investigations.
Outlook for 2019
Our full year outlook is unchanged. We have good top line
visibility with 87% of forecast 2019 revenues delivered or secured
which gives us confidence in our full year outlook.
Growth in FY 2019 revenue in the region of 5% will be driven by
ASA where we expect growth in capital projects activity in
downstream & chemicals and onshore midstream. We also expect
growth in ASEAAA, driven by operations solutions work in the Middle
East and Asia Pacific. E&IS revenues are also expected to be up
on 2019, benefitting from continued strength in built environment
activity in the Americas.
We expect to deliver EBITDA growth in all business units in
2019. The earnings impact of revenue growth together with cost
synergies of around $60m, improved sales mix, project phasing and
our typical H2 earnings weighting is expected to deliver full year
adjusted EBITDA in line with market expectations of EBITDA growth
of c8% (excluding the impact of IFRS 16).
The positive impact of the adoption of IFRS 16 on adjusted
EBITDA for the full year is now expected to be $143m which is a
reduction of $27m from our previous estimate of c$170m.
Asset Solutions Americas ("ASA") (c35% of Revenue)
(End markets: Upstream/midstream (c40%), downstream &
chemicals (c30%), renewables, other energy & industrial
(c30%))
Interim Interim
Jun 2019 Jun 2018
$m $m %
---------------------------------- ---------- ---------- -------
Revenue 1,845 1,827 1.0%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) 101 105 (3.8)%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) Margin 5.5% 5.7% (0.2)%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA 121 105 n/a
---------------------------------- ---------- ---------- -------
Adjusted EBITDA Margin 6.6% 5.7% n/a
---------------------------------- ---------- ---------- -------
People 16,200 17,500 (7.4)%
---------------------------------- ---------- ---------- -------
Order book(4) 2,600 2,842 (8.5)%
---------------------------------- ---------- ---------- -------
Revenue was in line with H1 2018. We saw increased capital
projects activity in midstream and chemicals & downstream
offsetting lower activity in renewables/other energy.
Adjusted EBITDA excluding the impact of IFRS 16 was down
slightly as strong performance in upstream/midstream and downstream
& chemicals was offset by cost overruns in heavy civils and
pipeline work related to weather delays and execution issues in the
first quarter. Adjusted EBITDA includes a $20m impact from the
adoption of IFRS 16.
Capital projects accounts for c65% of revenue. We saw increased
activity in downstream & chemicals including our EPC scopes for
a Gulf Coast plastics manufacturing facility and for the YCI
methanol plant. There was a good level of activity in onshore US
markets, particularly in midstream. In renewables/other energy we
saw lower revenues in H1 as we completed coal combustion projects.
Offshore upstream activity currently comprises early stage concept
and FEED work.
Our operations solutions work accounts for c35% of revenue.
Activity levels in upstream both onshore and offshore in the US are
in line with H1 2018.
Outlook
Order book is $2.6bn with c83% of 2019 revenue delivered or
secured. Order book is down compared to June 2018 due to the
completion of larger coal combustion projects which are being
offset in part by the recognition of the early stage work on solar
and wind awards secured in H1 2019. We expect growth in revenue and
EBITDA in 2019.
Revenue growth is expected to be led by capital projects
activity in downstream & chemicals and onshore midstream. In
downstream and chemicals, work on gulf coast projects and on the
YCI methanol plant is expected to increase through 2019. Good
activity in onshore US shale is expected to continue in the second
half with activity focused on facilities and pipelines. In
renewables and other energy, we have good visibility on new solar
and wind project work to be executed in H2 which is partly
recognised in order book. Full year EBITDA will benefit from cost
overruns in heavy civils and pipeline work in the first half not
repeating and the weighting of profit recognition in downstream and
chemicals work to H2 driven by contract phasing.
Asset Solutions Europe, Africa, Asia and Australia ("ASEAAA")
(c35% of Revenue)
(End markets: Upstream/midstream (c60%), downstream &
chemicals (c30%), renewables, other energy & industrial
(c10%))
Interim Interim
Jun 2019 Jun 2018
$m $m %
---------------------------------- ---------- ---------- -------
Revenue 1,485 1,592 (6.7)%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) 132 95 38.9%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) Margin 8.9% 6.0% 2.9%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA 158 95 n/a
---------------------------------- ---------- ---------- -------
Adjusted EBITDA Margin 10.6% 6.0% n/a
---------------------------------- ---------- ---------- -------
People 25,000 23,100 8.2%
---------------------------------- ---------- ---------- -------
Order book(4) 4,202 4,080 3.0%
---------------------------------- ---------- ---------- -------
Revenue was down around 7% on H1 2018. We saw growth in
Operations Solutions work in Asia Pacific and relatively robust
activity in Europe, Middle East, Russia and Caspian. This was
offset by lower revenues in Capital Projects due to phasing of work
including lower margin procurement scopes.
Adjusted EBITDA excluding the impact of IFRS 16 reflects strong
margin improvement benefitting from good execution particularly in
the Middle East and improved revenue mix. Margins also benefitted
from stronger performance in turbine joint ventures and cost
synergy delivery. Adjusted EBITDA includes a $26m impact from the
adoption of IFRS 16.
Capital Projects accounted for c35% of revenue. H1 saw lower
procurement activity but benefitted from work on the FEED and
project management consultancy scopes for Aramco, on both the
Marjan field and the integrated crude oils to chemicals
complex.
Operations Solutions accounted for c65% of revenue. We saw
growth in Asia Pacific, from Papua New Guinea and Australia, which
is expected to continue. Activity levels in the Middle East, driven
by Iraq, and the Caspian also remained robust. We also delivered
stronger performance in our turbine joint ventures including
EthosEnergy.
Outlook
Order book is up on H1 2018 at $4.2bn, with c90% of expected
2019 revenue delivered or secured. We expect growth in revenue and
EBITDA in 2019.
Growth in 2019 will be led by Operations Solutions, where we
expect increased activity in Iraq with customers including Basra
Gas, and in Papua New Guinea and Australia with Exxon.
Capital Projects activity will be down slightly on 2018. However
we will see higher activity in H2 over H1 driven by increased
activity with Aramco on both the Marjan field and the integrated
crude oils to chemicals complex together with procurement and
construction management activity on the TEVA biotech facility in
Germany. We also see good prospects in the downstream and chemicals
work in Asia Pacific which will contribute to activity in H2.
Specialist Technical Solutions ("STS") (c15% of Revenue)
(End markets: Upstream/midstream (c35%), downstream &
chemicals (c10%), renewables, other energy & industrial
(c55%))
Interim Interim
Jun 2019 Jun 2018
$m $m %
---------------------------------- ---------- ---------- -------
Revenue 720 736 (2.2)%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) 68 68 0.0%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) Margin 9.4% 9.2% 0.2%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA 80 68 n/a
---------------------------------- ---------- ---------- -------
Adjusted EBITDA Margin 11.1% 9.2% n/a
---------------------------------- ---------- ---------- -------
People 8,100 7,900 2.5%
---------------------------------- ---------- ---------- -------
Order book(4) 1,127 1,059 6.4%
---------------------------------- ---------- ---------- -------
Revenue was broadly in line with H1 2018. We saw good growth in
technology, consulting & subsea activity. This was offset by
lower activity in automation due to project management and lower
margin procurement activity on the STS-led scope of the TCO
automation project reducing as expected.
Adjusted EBITDA excluding the impact of IFRS 16 was flat with
improved margins, up 0.2%. Adjusted EBITDA includes a $12m impact
from the adoption of IFRS 16.
Outlook
Order book is c$1.1bn, with c84% of expected 2019 revenue
delivered or secured. Order book is up on H1 2018 due to a number
of awards in technology, consulting & subsea and automation and
longer term work secured in nuclear.
We expect a slight reduction in revenue in 2019 overall,
principally due to the disposal of TNT in May which accounted for c
$60m of revenue in 2018. We expect growth in technology, consulting
& subsea to continue. In automation, reducing activity on TCO
will be partly offset by a number of new projects secured on order
book. EBITDA will be up on 2018 due to the change in sales mix in
automation towards lower volume but higher margin work as TCO rolls
off, together with margin improvement initiatives across STS.
Environment and Infrastructure Solutions ("E&IS") (c15% of
Revenue)
(End markets: Built environment 100%)
Interim Interim
Jun 2019 Jun 2018
$m $m %
---------------------------------- ---------- ---------- -------
Revenue 705 654 7.8%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) 46 36 27.8%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA (excluding impact
of IFRS 16) Margin 6.5% 5.5% 1.0%
---------------------------------- ---------- ---------- -------
Adjusted EBITDA 58 36 n/a
---------------------------------- ---------- ---------- -------
Adjusted EBITDA Margin 8.2% 5.5% n/a
---------------------------------- ---------- ---------- -------
People 7,500 7,600 (1.3)%
---------------------------------- ---------- ---------- -------
Order book(4) 1,192 1,323 (9.9)%
---------------------------------- ---------- ---------- -------
E&IS delivered good growth in revenue in the first half,
benefitting from government and industrial spending increases in
the US built environment market.
Adjusted EBITDA excluding the impact of IFRS 16 was up over 25%,
benefitting from higher activity and good delivery in capital
projects and our decision not to pursue certain higher risk, fixed
price contracts. Adjusted EBITDA includes a $12m impact from the
adoption of IFRS 16.
Outlook
Order book is c$1.2bn, with c95% of expected 2019 revenue
delivered or secured. We are also encouraged by awards secured
early in H2 which are offsetting the impact on order book of
certain legacy capital projects being worked off.
Government and industrial spending increases in the US and
Canada will continue to support activity in the second half. In
line with seasonal trends earnings will be weighted to H2 and will
deliver a significantly stronger EBITDA in H2. We expect the Aegis
project to be substantially complete around the end of 2019 with
commercial close out expected in 2021.
Investment Services
A number of legacy activities in AFW are managed in Investment
Services including activities of the Industrial Power and Machinery
business. Investment Services generated revenue of $33m (H1 2018:
$107m) and adjusted EBITDA of $15m (H1 2018: $16m).
Financial Review
Trading performance
Trading performance is presented on the basis used by management
to run the business with adjusted EBITDA including the contribution
from Joint Ventures. A reconciliation of operating profit to
adjusted EBITDA is included in note 2 to the financial
statements.
Interim Interim Full
June June Year
2019 2018 2018
$m $m $m
---------------------------------------- ------- ------- --------
Revenue 4,788.2 4,916.4 10,014.4
---------------------------------------- ------- ------- --------
Adjusted EBITDA 384.1 292.9 693.8
---------------------------------------- ------- ------- --------
Adjusted EBITDA margin % 8.0% 6.0% 6.9%
Depreciation (pre IFRS 16) (26.5) (32.7) (63.9)
Depreciation (IFRS 16) (61.9) - -
Amortisation - software and system
development (47.2) (40.4) (84.3)
Amortisation - intangible assets from
acquisitions (72.1) (84.9) (164.5)
---------------------------------------- ------- ------- --------
Adjusted EBIT 176.4 134.9 381.1
Net finance expense (63.5) (52.9) (119.9)
IFRS 16 interest charge (14.9) - -
---------------------------------------- ------- ------- --------
Profit before tax and exceptional items 98.0 82.0 261.2
Taxation before exceptional items (37.7) (24.4) (86.0)
---------------------------------------- ------- ------- --------
Profit before exceptional items 60.3 57.6 175.2
Exceptional items, net of tax (47.2) (109.4) (182.8)
---------------------------------------- ------- ------- --------
Profit/(loss) for the period 13.1 (51.8) (7.6)
---------------------------------------- ------- ------- --------
Basic EPS (cents) 2.1c (7.9)c (1.3)c
Adjusted diluted EPS (cents) 18.2c 18.4c 46.6c
---------------------------------------- ------- ------- --------
In the table above depreciation, amortisation, net finance
expense and taxation before exceptional items include the
contribution from joint ventures.
The review of our trading performance is contained within the
Business Review.
Reconciliation to operating profit
The table below sets out a reconciliation of adjusted EBITDA to
operating profit per the group income statement.
Interim Interim Full
June June Year
2019 2018 2018
$m $m $m
------------------------------------------- ------- ------- -------
Adjusted EBITDA 384.1 292.9 693.8
Depreciation (88.4) (32.7) (63.9)
Amortisation (119.3) (125.3) (248.8)
------------------------------------------- ------- ------- -------
Adjusted EBIT 176.4 134.9 381.1
Tax and interest charges on joint ventures
included
within operating profit but not in
adjusted EBITDA (8.7) (10.0) (24.5)
------------------------------------------- ------- ------- -------
Operating profit before exceptional
items 167.7 124.9 356.6
Exceptional items (28.9) (101.1) (191.3)
------------------------------------------- ------- ------- -------
Operating profit 138.8 23.8 165.3
------------------------------------------- ------- ------- -------
Amortisation
Total amortisation for the first half of 2019 of $119.3m (June
2018: $125.3m) includes $61.8m of amortisation recognised on the
acquisition of AFW and $10.3m of amortisation relating to
intangible assets arising from acquisitions in previous years.
Amortisation in respect of software and development costs was
$47.2m (June 2018: $40.4m) and this largely relates to engineering
software and ERP system development. Included in the amortisation
charge for the period above is $0.7m (June 2018: $1.1m) in respect
of joint ventures.
Net finance expense and debt
Net finance expense is analysed below.
Interim Interim Full
June June year
2019 2018 2018
$m $m $m
------------------------------------------- ------- ------- -----
Interest on bank borrowings 35.5 31.4 67.8
Interest on US Private Placement debt 9.7 7.1 14.1
Discounting relating to asbestos, deferred
consideration and other liabilities 5.8 4.9 15.3
IFRS 16 interest 14.9 - -
Other interest, fees and charges 14.1 7.8 19.9
------------------------------------------- ------- ------- -----
Total finance expense 80.0 51.2 117.1
Finance income relating to defined
benefit pension schemes (1.0) - (0.5)
Other finance income (2.4) (2.1) (4.8)
------------------------------------------- ------- ------- -----
Net finance expense 76.6 49.1 111.8
------------------------------------------- ------- ------- -----
Interest cover(4) was 5.0 times (June 2018: 6.0 times).
The above table excludes net finance charges of $1.8m (June
2018: $3.8m) in respect of joint ventures.
At 30 June 2019 total borrowings under the Group's bank
facilities amounted to $1,552.7m, including a term loan of $754.2m,
which is repayable in October 2020, and $777.3m of drawdowns under
the Group's $1.75bn Revolving Credit Facility. A further $164.4m of
overdraft funding is available under the Group's other short-term
facilities. In total the Group has undrawn facilities of $1,137.2m
at 30 June. The Group also has $515m of unsecured loan notes issued
in the US private placement market which mature at varying dates
between 2021 and 2029. In June 2019, the Group secured a $364m part
refinancing of the term loan by arranging unsecured loan notes from
the US private placement market which were drawn down in July. The
loan notes mature between 2022 and 2031.
Net debt to adjusted EBITDA at 30 June was 2.5 times (proforma
June 2018: 2.4 times). The Group remains committed to achieving its
targeted leverage policy of net debt to adjusted EBITDA of 1.5
times.
Exceptional items
Interim Interim Full
June June year
2019 2018 2018
$m $m $m
------------------------------------------ ------- ------- -----
Loss on divestment of business 8.9 - -
Redundancy, restructuring and integration
costs 11.2 36.6 71.7
Investigation support costs 8.8 12.7 26.3
Arbitration settlement provision - 10.4 10.4
EthosEnergy impairment and other write
offs - 41.4 51.0
Guaranteed Minimum Pension equalisation - - 31.9
28.9 101.1 191.3
Exceptional tax charge/(credit) 18.3 8.3 (8.5)
Exceptional items including tax 47.2 109.4 182.8
------------------------------------------ ------- ------- -----
In the first half of 2019, the Group disposed of Terra Nova
Technologies and the net loss on sale (after allocating goodwill)
of $8.9m has been included in exceptional items.
Redundancy, restructuring and integration costs of $11.2m have
been incurred in the period. This is made up of continuing
restructuring, redundancy and integration costs associated with the
acquisition of Amec Foster Wheeler in October 2017.
Investigation support costs of $8.8m have been incurred during
the period in relation to ongoing investigations by the relevant
authorities into the historical use of agents. Further details are
set out in note 19 to the financial statements
An exceptional tax charge of $18.3m has been recorded in the
period including the non cash write off of irrecoverable tax
balances related to joint ventures.
Taxation
The effective tax rate on profit before tax, exceptional items
and amortisation and including Wood's share of joint venture profit
is set out below.
Interim Interim Full
June June year
2019 2018 2018
$m $m $m
-------------------------------------------- ------- ------- -----
Profit from continuing operations before
tax, exceptional items and amortisation 217.3 207.3 510.0
Tax charge (excluding tax on exceptional
items and amortisation) 50.8 47.2 116.8
Effective tax rate on continuing operations
(excluding tax on exceptional items
and amortisation) 23.4% 22.8% 22.9%
-------------------------------------------- ------- ------- -----
The tax charge above includes $6.9m in relation to joint
ventures (June 2018: $6.2m).
The effective tax rate reflects the rate of tax applicable in
the jurisdictions in which the group operates and is adjusted for
permanent differences between accounting and taxable profit and the
recognition of deferred tax assets. Key adjustments impacting on
the rate in 2019 are restrictions on the deductibility of interest
in the UK and branch and withholding tax in excess of double tax
relief, offset by increased deferred tax asset recognition,
primarily in the US, and the release of provisions in relation to
uncertain tax positions. Despite challenges in relation to interest
deductibility and the new US legislation around base erosion, we
currently anticipate a rate for the full year of between 23% and
24%.
In addition to the effective tax rate, the total tax charge in
the income statement reflects the impact of exceptional items and
amortisation which by their nature tend to be expenses that are
more likely to be not deductible than those incurred in the ongoing
trading profits. The income statement tax charge excludes tax in
relation to joint ventures.
Earnings per share
Adjusted diluted EPS for the period was 18.2 cents per share
(June 2018: 18.4 cents). The average number of fully diluted shares
used in the EPS calculation for the period was 686.8m (June 2018:
683.5m).
Reconciliation of number of fully diluted shares Closing Average
(million)
------------------------------------------------- ------- -------
At start of year 681.5 681.5
Shares held by employee share trusts (10.5) (10.6)
------------------------------------------------- ------- -------
Basic number of shares for EPS 671.0 670.9
Effect of dilutive shares 15.5 15.9
------------------------------------------------- ------- -------
Fully diluted number of shares for EPS 686.5 686.8
------------------------------------------------- ------- -------
Basic EPS for the period was 2.1 cents per share (June 2018:
(7.9) cents). The profit for the period attributable to owners of
the parent of $13.8m is higher than the $53.2m loss reported in
2018 due to increased adjusted EBITDA and lower exceptional items
partly offset by higher interest and tax.
Adjusted diluted earnings per share is calculated by dividing
earnings before exceptional items and amortisation relating to
acquisitions, net of tax, by the weighted average number of
ordinary shares in issue during the period. In contrast to the way
this was previously reported, the measure is stated before
amortisation arising from acquisitions only and not amortisation
relating to other intangible assets such as software costs.
Dividend
Taking account of cash flows and earnings, the progressive Wood
dividend policy is a key element of our investment case. The Board
has recommended an interim dividend of 11.4 cents per share, an
increase of 1%. The interim dividend will be paid on 26 September
2019 to all shareholders on the register at the close of business
on 30 August 2019.
Cash flow and net debt
The cash flow and net debt position set out below has been
prepared using equity accounting for joint ventures.
Interim Interim Full
June June year
2019 2018 2018
$m $m $m
------------------------------------------- --------- --------- ---------
Opening net debt including leases (2,117.2) (1,646.1) (1,646.1)
------------------------------------------- --------- --------- ---------
Adjusted EBITDA 384.1 292.9 693.8
Less JV EBITDA (33.7) (25.5) (83.3)
------------------------------------------- --------- --------- ---------
350.4 267.4 610.5
Cash impact of current period exceptional
items (6.6) (31.7) (74.7)
Cash impact of prior year exceptional
items (11.9) (46.2) (67.3)
Decrease in provisions (115.7) (30.5) (144.1)
Dividends from JV's 25.8 21.5 38.5
FX and other 5.3 (4.2) (28.8)
------------------------------------------- --------- --------- ---------
Cash generated from operations pre-working
capital 247.3 176.3 334.1
Working capital movements (140.0) 163.1 291.2
------------------------------------------- --------- --------- ---------
Cash generated from operations 107.3 339.4 625.3
Acquisitions - (8.3) (30.0)
Divestments 41.8 - 33.4
Capex and intangibles (58.7) (52.9) (87.5)
New leases (82.3) - -
Tax paid (52.2) (26.3) (83.5)
Interest paid (56.9) (42.7) (96.7)
Dividends paid (159.0) (155.3) (231.0)
Other (11.3) (7.9) (32.1)
------------------------------------------- --------- --------- ---------
(Increase)/decrease in net debt (271.3) 46.0 97.9
------------------------------------------- --------- --------- ---------
Closing net debt including leases (2,388.5) (1,600.1) (1,548.2)
Closing net debt at 30 June 2019 including leases was $2,388.5m.
Net debt excluding leases at 30 June 2019 was $1,773.0m (June 2018:
$1,554.7m) which excludes the $582.0m impact in respect of the
adoption of IFRS 16 and $33.5m in respect of existing finance
leases.
Cash generated from operations pre-working capital increased by
$71.0m to $247.3m and post-working capital reduced by $232.1m to
$107.3m. The working capital outflow in the period was impacted by
two cash receipts totalling $130m expected in June but received
early in July. Adjusting for these, the working capital would have
been in line with expectations with a small outflow in the first
half.
Cash from divestments of $41.8m mainly relates to the disposal
of the Group's interests in Terra Nova Technologies.
Payments for capex and intangible assets were $58.7m (June 2018:
$52.9m) and included software development and expenditure on ERP
systems across the Group.
Summary Balance Sheet
Interim Interim Full
June June year
2019 2018 2018
$m $m $m
------------------------------------- --------- --------- ---------
Non-current assets 7,747.8 7,971.2 7,720.6
------------------------------------- --------- --------- ---------
Current assets 4,187.4 4,673.4 4,032.7
Current liabilities (3,970.1) (4,317.5) (3,870.1)
------------------------------------- --------- --------- ---------
Net current assets 217.3 355.9 162.6
Non-current liabilities (3,616.5) (3,469.6) (3,273.4)
------------------------------------- --------- --------- ---------
Net assets 4,348.6 4,857.5 4,609.8
------------------------------------- --------- --------- ---------
Equity attributable to owners of the
parent 4,343.5 4,848.9 4,590.8
Non-controlling interests 5.1 8.6 19.0
------------------------------------- --------- --------- ---------
Total equity 4,348.6 4,857.5 4,609.8
------------------------------------- --------- --------- ---------
Non-current assets include $4,722.8m of goodwill and intangibles
relating to the acquisition of Amec Foster Wheeler. Non-current
assets also includes $475.7m right of use assets recognised largely
as a result of the adoption of IFRS 16 and liabilities include
$615.5m of lease liabilities ($445.5m non-current, $163.0m current
and $7.0m held for sale). Current assets include $331.0m of assets
held for sale and current liabilities include $71.4m of liabilities
held for sale in respect of the Nuclear business which the Group
has entered into an agreement to dispose of, with completion
expected in the first quarter of 2020.
Asbestos related obligations
Largely as a result of the acquisition of AFW in 2017, the Group
is subject to claims by individuals who allege that they have
suffered personal injury from exposure to asbestos primarily in
connection with equipment allegedly manufactured by certain
subsidiaries during the 1970's or earlier. The overwhelming
majority of claims that have been made and are expected to be made
are in the United States. At 30 June 2019, the Group has net
asbestos related liabilities of $386.2m (June 2018: $421.8m).
The Group expects to have net cash outflows of around $16m as a
result of asbestos liability indemnity and defence payments in
excess of insurance proceeds in the second half of 2019. The
estimate assumes no additional settlements with insurance companies
and no elections to fund additional payments. The Group has worked
with its independent asbestos valuation experts to estimate the
amount of asbestos related indemnity and defence costs at each year
end based on a forecast to 2050.
The Group's adjusted EBITDA is stated after deducting costs
relating to asbestos including administration costs, movements in
the liability as a result of changes in assumptions and changes in
the discount rate.
Full details of asbestos liabilities are provided in note 11 to
the Group financial statements.
Pensions
The Group operates a number of defined benefit pension schemes
in the UK and US and a number of defined contribution plans. At 30
June 2019, the schemes had a net surplus of $115.0m. In assessing
the potential liabilities, judgement is required to determine the
assumptions around inflation, investment returns and member
longevity. The assumptions at 30 June 2019 showed a reduction in
the discount rate which results in higher scheme liabilities and
broadly similar inflation rates.
In April 2019, the two main UK schemes, the Amec Foster Wheeler
Pension Plan and the John Wood Group PLC Retirement Benefit Scheme
were merged. The merged scheme holds all of the pension assets in a
separately administered fund and is governed by employment laws in
the UK.
Contingent liabilities
Details of the Group's contingent liabilities are set out in
note 19 to the financial statements.
Divestments
During the first half of 2019, the Group disposed of its
investments in the Amec Foster Wheeler Power Machinery Company
Limited, Centro Energia Teverola S.r.l, Centro Energia Ferrara
S.r.l and Terra Nova Technologies ('TNT'). The first three
disposals were part of the Investment Services business unit and as
such the gains and losses on these transactions are included in
adjusted EBITDA. TNT was part of the STS business unit and the loss
on the disposal is disclosed in exceptional items.
New accounting standards
The new accounting standard on leases, IFRS 16, became effective
on 1 January 2019. Under IFRS 16, the Group is required to
recognise 'right of use' assets and lease liabilities in respect of
its operating leases for property, vehicles, plant and equipment.
This has resulted in an increased depreciation charge, higher
financing costs and lower administrative expenses in the income
statement with an overall increase in operating profit.
A summary of the impact of IFRS 16 on the interim financial
statements is set out below:
On transition at 1 January 2019 $m
------------------------------------------------- -------
Right of use asset recognised 450.6
Onerous lease liabilities derecognised 78.9
Derecognition of operating lease prepayments and
accruals 0.4
Recognition of deferred tax asset 10.6
Lease liability recognised (569.0)
-------------------------------------------------- -------
Reduction in shareholders' funds (28.5)
Income statement impact for the six months to
30 June 2019
Reduction in operating lease costs 70.1
Increased depreciation (61.9)
Increased interest expense (14.9)
Reduced interest on discounting of onerous lease
provision 1.1
-------------------------------------------------- -------
Reduction in profit before tax (5.6)
-------------------------------------------------- -------
Principal risks and uncertainties
The principal risks and uncertainties facing the Group in the
second half of 2019 that could lead to a significant loss of
reputation or could impact on the performance of the Group, along
with our approach to managing, mitigating and monitoring these
risks, remain broadly unchanged from those described in the Group's
2018 Annual Report. The key risks are in the following
categories:
-- Strategic
-- Health, Safety Security & Environment
-- Financial
-- Commercial and Operations
-- Compliance and Litigation
The mitigating factors are designed to reduce, but cannot be
relied upon to eliminate, the risk areas identified. For further
details on the management of risk and the principal risks and
uncertainties see pages 39 to 42 of the Group's 2018 Annual
Report.
Footnotes
1. Adjusted EBITDA represents operating profit of $138.8m (June
2018: $23.8m) before the deduction of depreciation of $88.4m (June
2018: $32.7m), amortisation of $119.3m (June 2018: $125.3m) and
exceptional items of $28.9m (June 2018: $101.1m) and joint venture
interest and tax of $8.7m (June 2018: $10.0m) and is provided as it
is a key unit of measurement used by the Group in the management of
its business.
2. Adjusted diluted earnings per share ("AEPS") is calculated by
dividing earnings before exceptional items and amortisation
relating to acquisitions, net of tax, by the weighted average
number of ordinary shares in issue during the period, excluding
shares held by the Group's employee share ownership trusts and
adjusted to assume conversion of all potentially dilutive ordinary
shares.
3. Number of people includes both employees and contractors at
30 June 2019 and includes joint ventures.
4. Interest cover is adjusted EBITDA divided by the net finance expense.
John Wood Group PLC
Interim Financial Statements 2019
Group income statement
for the six month period to 30 June 2019
Unaudited Interim Unaudited Interim Audited Full Year
June 2019 June 2018 December 2018
Exceptional Exceptional Exceptional
items items items
Pre- Pre-
Pre- exceptional (note exceptional (note exceptional (note
items 4) Total items 4) Total items 4) Total
Note $m $m $m $m $m $m $m $m $m
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Revenue 2,3 4,788.2 - 4,788.2 4,916.4 - 4,916.4 10,014.4 - 10,014.4
Cost of sales (4,233.4) - (4,233.4) (4,369.5) - (4,369.5) (8,820.6) - (8,820.6)
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Gross profit 554.8 - 554.8 546.9 - 546.9 1,193.8 - 1,193.8
Administrative
expenses (407.8) (20.0) (427.8) (431.8) (58.2) (490.0) (881.2) (140.3) (1,021.5)
Loss on sale
of business 4,12 - (8.9) (8.9) - - - - - -
Impairment
of investment
in joint
ventures - - - - (41.4) (41.4) - (41.4) (41.4)
Share of
post-tax
profit from
joint ventures 20.7 - 20.7 9.8 (1.5) 8.3 44.0 (9.6) 34.4
---------------- ---- ----------------
Operating
profit 2 167.7 (28.9) 138.8 124.9 (101.1) 23.8 356.6 (191.3) 165.3
Finance income 3.4 - 3.4 2.1 - 2.1 5.3 - 5.3
Finance expense (80.0) - (80.0) (51.2) - (51.2) (117.1) - (117.1)
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Profit/(loss)
before tax 91.1 (28.9) 62.2 75.8 (101.1) (25.3) 244.8 (191.3) 53.5
Taxation 8 (30.8) (18.3) (49.1) (18.2) (8.3) (26.5) (69.6) 8.5 (61.1)
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Profit/(loss)
for period 60.3 (47.2) 13.1 57.6 (109.4) (51.8) 175.2 (182.8) (7.6)
----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Profit/(loss)
attributable
to:
Owners of
the parent 61.0 (47.2) 13.8 56.2 (109.4) (53.2) 173.9 (182.8) (8.9)
Non-controlling
interests (0.7) - (0.7) 1.4 - 1.4 1.3 - 1.3
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
60.3 (47.2) 13.1 57.6 (109.4) (51.8) 175.2 (182.8) (7.6)
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
Earnings
per share
(expressed
in cents
per share)
Basic 7 2.1 (7.9) (1.3)
Diluted 7 2.0 (7.9) (1.3)
---------------- ---- ---------------- ----------- --------- ----------- ----------- --------- ----------- ----------- ---------
The notes on pages 27 to 43 are an integral part of the interim
financial statements.
Group statement of comprehensive income
for the six month period to 30 June 2019
Unaudited Unaudited Audited
Interim Interim Full Year
June June December
2019 2018 2018
$m $m $m
-------------------------------------------------- --------- --------- ----------
Profit/(loss) for the period 13.1 (51.8) (7.6)
Other comprehensive (expense)/income
Items that will not be reclassified to
profit or loss
Re-measurement (losses)/gains on retirement
benefit obligations (133.6) 238.8 118.0
Movement in deferred tax relating to retirement
benefit obligations 21.9 (43.6) (20.5)
-------------------------------------------------- --------- --------- ----------
Total items that will not be reclassified
to profit or loss (111.7) 195.2 97.5
-------------------------------------------------- --------- --------- ----------
Items that may be reclassified subsequently
to profit or loss
Cash flow hedges (7.3) (4.1) (4.7)
Tax on derivative financial instruments 1.4 - 0.6
Exchange movements on retranslation of
foreign operations 31.3 (108.8) (237.7)
Total items that may be reclassified subsequently
to profit or loss 25.4 (112.9) (241.8)
-------------------------------------------------- ---------
Other comprehensive (expense)/income for
the period, net of tax (86.3) 82.3 (144.3)
-------------------------------------------------- --------- --------- ----------
Total comprehensive (expense)/income for
the period (73.2) 30.5 (151.9)
-------------------------------------------------- ---------
Total comprehensive (expense)/income for
the period is attributable to:
Owners of the parent (72.6) 29.6 (152.0)
Non-controlling interests (0.6) 0.9 0.1
-------------------------------------------------- --------- --------- ----------
(73.2) 30.5 (151.9)
-------------------------------------------------- --------- --------- ----------
Exchange movements on the retranslation of foreign currency net
assets would only be subsequently reclassified through profit or
loss in the event of the disposal of a business.
The notes on pages 27 to 43 are an integral part of the interim
financial statements.
Group balance sheet
as at 30 June 2019
Unaudited Unaudited Audited
Interim Interim Full Year
June June December
2019 2018 2018
Note $m $m $m
------------------------------------- ---- --------- --------- ----------
Assets
Non-current assets
Goodwill and other intangible assets 10 6,364.5 6,769.6 6,656.7
Property plant and equipment 173.0 222.1 198.5
Right of use assets 475.7 - -
Investment in joint ventures 160.7 133.1 168.2
Other investments 78.0 83.4 76.4
Long term receivables 122.2 146.5 128.1
Retirement benefit scheme surplus 9 284.3 547.1 404.9
Deferred tax assets 89.4 69.4 87.8
------------------------------------- ---- --------- --------- ----------
7,747.8 7,971.2 7,720.6
------------------------------------- ---- --------- ---------
Current assets
Inventories 12.2 11.7 13.7
Trade and other receivables 2,635.4 2,634.6 2,555.7
Financial assets 2.8 37.5 14.3
Income tax receivable 49.3 84.1 37.4
Assets held for sale 12 331.0 215.5 58.9
Cash and cash equivalents 15 1,156.7 1,690.0 1,352.7
------------------------------------- ----
4,187.4 4,673.4 4,032.7
------------------------------------- ---- --------- --------- ----------
Total assets 11,935.2 12,644.6 11,753.3
Liabilities
Current liabilities
Borrowings 15 892.4 1,227.5 984.5
Trade and other payables 2,539.8 2,630.9 2,526.1
Income tax liabilities 201.2 280.2 197.9
Lease liabilities 15 163.0 - -
Provisions 11 102.3 66.1 134.3
Liabilities held for sale 12 71.4 112.8 27.3
------------------------------------- ---- ---------
3,970.1 4,317.5 3,870.1
------------------------------------- ---- --------- --------- ----------
Net current assets 217.3 355.9 162.6
------------------------------------- ---- --------- --------- ----------
Non-current liabilities
Borrowings 15 2,067.7 2,062.5 1,917.3
Deferred tax liabilities 60.0 157.0 112.6
Retirement benefit scheme deficit 9 169.3 148.1 162.2
Lease liabilities 15 445.5 - -
Other non-current liabilities 123.5 268.2 224.4
Provisions 11 750.5 833.8 856.9
------------------------------------- ---- --------- --------- ----------
3,616.5 3,469.6 3,273.4
------------------------------------- ---- --------- --------- ----------
Total liabilities 7,586.6 7,787.1 7,143.5
------------------------------------- ---- --------- --------- ----------
Net assets 4,348.6 4,857.5 4,609.8
------------------------------------- ---- --------- --------- ----------
Equity attributable to owners of
the parent
Share capital 40.7 40.5 40.7
Share premium 63.9 63.9 63.9
Retained earnings 1,534.1 1,936.2 1,806.7
Merger reserve 2,790.8 2,790.8 2,790.8
Other reserves (86.0) 17.5 (111.3)
------------------------------------- ---- ---------
4,343.5 4,848.9 4,590.8
Non-controlling interests 5.1 8.6 19.0
------------------------------------- ---- --------- --------- ----------
Total equity 4,348.6 4,857.5 4,609.8
------------------------------------- ---- --------- --------- ----------
The notes on pages 27 to 43 are an integral part of the interim
financial statements.
Group statement of changes in equity
for the six month period to 30 June 2019
Equity
attributable
to owners
Share Share Retained Merger Other of the Non-controlling Total
Capital Premium Earnings Reserve reserves parent interests equity
Note $m $m $m $m $m $m $m $m
At 1 January 2018 40.5 63.9 1,935.2 2,790.8 129.9 4,960.3 11.7 4,972.0
(Loss)/profit for
the
period - - (53.2) - - (53.2) 1.4 (51.8)
Other comprehensive
income/(expense):
Re-measurement
gains
on retirement
benefit
schemes - - 238.8 - - 238.8 - 238.8
Movement in
deferred
tax relating to
retirement
benefit schemes - - (43.6) - - (43.6) - (43.6)
Cash flow hedges - - - - (4.1) (4.1) - (4.1)
Net exchange
movements
on retranslation
of
foreign currency
operations - - - - (108.3) (108.3) (0.5) (108.8)
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
Total comprehensive
income/(expense)
for
the period - - 142.0 - (112.4) 29.6 0.9 30.5
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
Transactions with
owners:
Dividends paid 5 - - (155.3) - - (155.3) (2.4) (157.7)
Credit relating to
share based
charges 16 - - 9.4 - - 9.4 - 9.4
Tax relating to
share
option schemes - - 0.2 - - 0.2 - 0.2
Shares disposed of
by employee share
trusts - - 0.8 - - 0.8 - 0.8
Exchange movements
in respect of
shares
held by employee
share
trusts - - 2.7 - - 2.7 - 2.7
Transactions with
non-controlling
interests - - 1.2 - - 1.2 (1.6) (0.4)
------------------- ---- --------
At 30 June 2018 40.5 63.9 1,936.2 2,790.8 17.5 4,848.9 8.6 4,857.5
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
At 1 January 2019 40.7 63.9 1,806.7 2,790.8 (111.3) 4,590.8 19.0 4,609.8
Adjustment on
initial
application of
IFRS
16 (net of tax) 1 - - (28.5) - - (28.5) - (28.5)
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
Adjusted balance at
1 January 2019 40.7 63.9 1,778.2 2,790.8 (111.3) 4,562.3 19.0 4,581.3
Profit/(loss) for
the
period - - 13.8 - - 13.8 (0.7) 13.1
Other comprehensive
income/(expense):
Re-measurement
losses
on retirement
benefit
schemes - - (133.6) - - (133.6) - (133.6)
Movement in
deferred
tax relating to
retirement
benefit schemes - - 21.9 - - 21.9 - 21.9
Cash flow hedges - - - - (7.3) (7.3) - (7.3)
Tax on derivative
financial
instruments - - - - 1.4 1.4 - 1.4
Net exchange
movements
on retranslation
of
foreign currency
operations - - - - 31.2 31.2 0.1 31.3
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
Total comprehensive
(expense)/income
for
the period - - (97.9) - 25.3 (72.6) (0.6) (73.2)
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
Transactions with
owners:
Dividends paid 5 - - (159.0) - - (159.0) - (159.0)
Credit relating to
share based
charges 16 - - 12.3 - - 12.3 - 12.3
Shares disposed of
by employee share
trusts - - 0.4 - - 0.4 - 0.4
Exchange movements
in respect of
shares
held by employee
share
trusts - - 0.1 - - 0.1 - 0.1
Transactions with
non-controlling
interests - - - - - - (13.3) (13.3)
------------------- ---- --------
At 30 June 2019 40.7 63.9 1,534.1 2,790.8 (86.0) 4,343.5 5.1 4,348.6
------------------- ---- -------- -------- --------- -------- --------- ------------ ---------------- -------
The figures presented in the above tables are unaudited.
Other reserves include the capital redemption reserve, capital
reduction reserve, currency translation reserve and the hedging
reserve.
The notes on pages 27 to 43 are an integral part of the interim
financial statements.
Group cash flow statement
for the six month period to 30 June 2019
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 Dec 2018
Note $m $m $m
--------------------------------------------- ---- ---------- ---------- ---------------------------
Cash generated from operations 14 107.3 339.4 625.3
Tax paid (52.2) (26.3) (83.5)
--------------------------------------------- ---- ---------- ---------- ---------------------------
Net cash from operating activities 55.1 313.1 541.8
--------------------------------------------- ---- ---------- ---------- ---------------------------
Cash flows from investing activities
Acquisition of subsidiaries (consideration
paid less cash acquired) 6 - (8.3) (30.0)
Disposal of businesses (net of cash
disposed) 12 41.8 - 33.4
Purchase of property plant and equipment (14.0) (19.8) (34.2)
Proceeds from sale of property plant
and equipment 2.6 4.5 5.0
Purchase of intangible assets 10 (52.4) (37.6) (58.3)
Interest received 2.5 2.2 4.8
Cash from short term investments and
restricted cash 15 11.7 24.7 45.4
Investment in joint ventures - (2.2) (3.2)
Repayment of loans from joint ventures - - (5.2)
--------------------------------------------- ----
Net cash used in investing activities (7.8) (36.5) (42.3)
--------------------------------------------- ---- ---------- ---------- ---------------------------
Cash flows from financing activities
(Repayment of)/proceeds from bank loans
and overdrafts 15 (92.1) 684.3 448.9
Proceeds from/(repayment of) long-term
borrowings 15 148.5 (263.3) (407.8)
Payment of lease liabilities (2018:
repayment of finance leases) 15 (80.6) (4.6) (14.7)
Proceeds from disposal of shares by
employee share trusts 0.4 0.8 1.7
Interest paid (59.4) (44.9) (101.5)
Dividends paid to shareholders 5 (159.0) (155.3) (231.0)
Dividends paid to non-controlling interests - (2.4) (5.9)
Acquisition of non-controlling interests - (0.4) (0.2)
--------------------------------------------- ---- ----------
Net cash (used in)/from financing activities (242.2) 214.2 (310.5)
--------------------------------------------- ---- ---------- ---------- ---------------------------
Net (decrease)/increase in cash and
cash equivalents (194.9) 490.8 189.0
Effect of exchange rate changes on
cash and cash equivalents 5.1 (14.2) (37.6)
--------------------------------------------- ---- ----------
Opening cash and cash equivalents 1,376.9 1,225.5 1,225.5
Closing cash and cash equivalents 1,187.1 1,702.1 1,376.9
--------------------------------------------- ---- ---------- ---------- ---------------------------
Closing cash and cash equivalents includes $30.4m (June 2018:
$12.1m and December 2018: $24.2m) presented in assets held for sale
on the Group balance sheet (see note 12).
The notes on pages 27 to 43 are an integral part of the interim
financial statements.
1. Basis of preparation
The interim report and condensed consolidated financial
statements for the six months ended 30 June 2019 have been prepared
in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and in accordance with IAS 34 'Interim
financial reporting' as adopted by the European Union. The interim
report and condensed financial statements should be read in
conjunction with the Group's 2018 Annual Report and Accounts which
have been prepared in accordance with IFRSs as adopted by the
European Union.
The interim report and condensed consolidated financial
statements have been prepared on the basis of the accounting
policies set out in the Group's 2018 Annual Report and Accounts and
those new standards discussed below which are applicable from 1
January 2019. The interim report and condensed consolidated
financial statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. The interim
condensed financial statements were approved by the Board of
Directors on 19 August 2019. The results for the six months to 30
June 2019 and the comparative results for six months to 30 June
2018 are unaudited. The comparative figures for the year ended 31
December 2018 do not constitute the statutory financial statements
for that year. Those financial statements have been delivered to
the Registrar of Companies and include the auditor's report which
was unqualified and did not contain any statement under Section 498
of the Companies Act 2006.
Going concern
The Directors have a reasonable expectation that the Group will
be able to operate within the level of available facilities and
cash for the foreseeable future and accordingly believe that it is
appropriate to prepare the financial statements on a going concern
basis. In assessing the basis of preparation of the financial
statements for the six months ended 30 June 2019, the Directors
have considered the principles of the Financial Reporting Council's
'Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting, 2014'; namely assessing the
applicability of the going concern basis, the review period and
disclosures.
The Directors have undertaken a rigorous assessment of going
concern and liquidity, including financial forecasts for a period
of 12 months from the date of approval of these financial
statements, that reflect reasonable possible downsides. In order to
satisfy themselves that they have adequate resources for the
future, the Directors have reviewed the Group's existing debt
levels, the committed funding and liquidity positions under debt
covenants, and the Group's ability to generate cash from trading
activities. At the date of signing these accounts, the Group's
principal debt facilities comprise a $0.4bn term loan repayable in
October 2020, a $1.75bn revolving credit facility maturing in 2022
and $0.9bn of US private placement debt repayable in various
tranches between 2021 and 2031.
The cash flow forecasts show that the Group will have sufficient
funds to meet its liabilities as they fall due. With regard to the
$0.4bn term loan repayable in October 2020, management intend to
refinance this through a combination of non-core asset disposals
and, if necessary, refinancing of the revolving credit facility
which matures in 2022 or by taking out a new term loan. As
highlighted in note 12, management have reclassified the Nuclear
business as held for sale given that it expects a deal to sell this
business to be concluded within 12 months of the balance sheet
date. The expected proceeds of circa $305m will be used to pay down
the term loan. Management have held preliminary discussions with
the banking syndicate on refinancing the revolving credit facility,
or providing a further term loan and this is likely to be completed
in advance of the October 2020 maturity.
At 30 June 2019, the Group had headroom of $972.7m under these
facilities and in addition had $164.5m of other undrawn borrowing
facilities. In undertaking their review the Directors have
considered the business plans which provide financial projections
through to the end of August 2020.
Consequently, the directors are confident that the company will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis.
Judgements and estimates
In preparing these interim condensed financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial
statements for the year ended 31 December 2018 except for new
judgements in relation to the application of IFRS 16 and new
estimates related to the retirement benefit schemes.
The value of the Group's retirement benefit scheme surplus has
reduced since 31 December 2018 as a result of the reduction in the
discount rate used in the actuarial valuations. The Group
determines the discount rate to be used in conjunction with the
scheme actuaries. A reduction in the discount rate increases the
defined benefit obligations. The Directors believe it is
appropriate to recognise the pension scheme asset as the scheme
rules give the employers the right to any surplus on the winding up
of the pension schemes.
Functional currency
The Group's earnings stream is primarily US dollars and the
principal functional currency is the US dollar, being the most
representative currency of the Group. The Group's financial
statements are therefore prepared in US dollars.
The following exchange rates have been used in the preparation
of these accounts:
June 2019 June 2018
---------------------- --------- ---------
Average rate GBP1 = $ 1.2927 1.3740
Closing rate GBP1 = $ 1.2728 1.3203
---------------------- --------- ---------
Disclosure of impact of new and future accounting standards
(a) Amended standards and interpretations
The following standards have been published and are mandatory
for the Group's accounting periods beginning on or after 1 January
2019.
Impact of application of IFRS 16
IFRS 16 introduces a single, on-balance sheet lease accounting
model for lessees. A lessee recognises a right of use asset
representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. The
Group has assessed the impact that the initial application of IFRS
16 has on its consolidated financial statements, as described
below.
The Group adopted IFRS 16 on 1 January 2019, using the modified
retrospective approach. The cumulative effect of adopting IFRS 16
is recognised as an adjustment to the opening balance of retained
earnings at 1 January 2019, with no restatement of comparative
information. The Group has recognised new assets and liabilities
for its operating leases of property, vehicles and other assets.
The nature of expenses related to those leases has changed because
the Group now recognises a depreciation charge for right of use
assets and interest expense on lease liabilities. Previously, the
Group recognised operating lease expense on a straight-line basis
over the term of the lease, and recognised assets and liabilities
only to the extent that there was a timing difference between
actual lease payments and the expense recognised. In addition, the
Group will no longer recognise provisions for operating leases that
it assesses to be onerous, and instead will perform an impairment
test on the right of use assets.
On transition to IFRS 16, the Group recognised additional right
of use assets and additional liabilities, recognising the
difference in retained earnings. The impact is summarised
below:
At 1 January 2019 $m
-------------------------------------------------------------------------- -------
Right of use assets 450.6
Deferred tax asset 10.6
Lease liabilities (569.0)
Onerous lease provisions adjustment 17.7
Onerous lease liabilities (included within other non-current liabilities) 61.2
Trade and other payables - accruals 8.3
Trade and other receivables - prepayments (7.9)
-------------------------------------------------------------------------- -------
Opening reduction to retained earnings (28.5)
-------------------------------------------------------------------------- -------
Depreciation and interest in the first half of 2019 have
increased by $61.9m and $14.9m respectively, which is offset by a
reduction in operating lease costs of $70.1m and an unwinding of
discounting charge of $1.1m. Adjusted EBITDA and adjusted EBITA
have increased by $70.1m and $8.2m respectively and there is a
reduction of $5.6m on profit before tax.
When measuring liabilities for leases that were classified as
operating leases, the Group discounted payments using its
incremental borrowing rate as at 1 January 2019. The weighted
average rate applied is 5.2%. Right of use assets were measured at
their carrying amount as if IFRS 16 had been applied since
commencement date, discounted at the Group's incremental borrowing
rate at the date of initial application.
Disclosure of impact of new and future accounting standards
(continued)
Reconciliation of lease liabilities recognised at 1 January 2019 $m
-------------------------------------------------------------------------------------------------- -------
Operating lease commitment at 31 December 2018 as disclosed in the Group's consolidated financial
statements 752.7
Impact of discounting (123.3)
-------------------------------------------------------------------------------------------------- -------
Commitment discounted using the incremental borrowing rate at 1 January 2019 629.4
Recognition exemption for leases of low value assets (35.9)
Recognition exemption for leases with less than 12 months of lease term at transition (26.5)
Extension options reasonably expected to be exercised 2.0
-------------------------------------------------------------------------------------------------- -------
Lease liabilities recognised at 1 January 2019 569.0
-------------------------------------------------------------------------------------------------- -------
The Group used the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
-- Applied the exemption not to recognise right of use assets
and liabilities for property leases with less than 12 months of
lease term;
-- The use of a single discount rate to a portfolio of leases
with reasonably similar characteristics;
-- Reliance on previous assessments on whether leases are onerous;
-- Applied the exemption not to recognise right of use assets
and liabilities for low value assets;
-- Excluded initial direct costs from measuring the right of use
asset at the date of initial application; and
-- Used hindsight when determining the lease term if the
contract contains options to extend or terminate the lease.
Significant accounting policies
The Group recognises a right of use asset and a lease liability
at the lease commencement date. The right of use asset is initially
measured at cost, and subsequently at cost less any accumulated
depreciation and impairment losses and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the Group's incremental borrowing rate.
The lease liability is subsequently increased by the interest
cost on the lease liability and reduced by the lease payment made.
It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in the
assessment of whether an extension option is reasonably certain to
be exercised or a termination option is reasonably certain not to
be exercised.
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lessee that includes renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which may
significantly affect the amount of lease liabilities and right of
use assets recognised.
Impact of application of IFRIC 23
The Group has adopted IFRIC 23 Uncertainty over Income Tax
Treatments for the first time in 2019 which gives guidance on the
accounting for uncertain tax positions. The adoption of IFRIC 23
has not resulted in a material change in relation to the provisions
for tax uncertainties held by the Group. The change in methodology
has not resulted in a material change to the uncertain tax
position.
(b) Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the Group
There have been no new standards that have been published and
are mandatory for the Group's accounting periods beginning on or
after 1 January 2020.
2. Segmental reporting
The Group operates through five segments, Asset Solutions EAAA
('AS EAAA'), Asset Solutions Americas ('AS Americas'), Specialist
Technical Solutions ('STS'), Environment and Infrastructure
Solutions ('E&IS') and Investment Services ('IS'). Under IFRS
11 'Joint arrangements', the Group is required to account for joint
ventures using equity accounting. Adjusted EBITA and adjusted
EBITDA as shown in the table below include share of joint venture
profits, which is consistent with the way management review the
performance of the business units. From January 2019, revenue is
reported on an equity accounting basis and consequently the 2018
revenue comparatives have been restated to exclude joint venture
revenue.
The segment information provided to the Group's Chief Executive
for the reportable operating segments for the period included the
following:
Reportable operating segments
Revenue Adjusted EBITDA (1) Adjusted EBITA (1) Operating
profit
Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited
Interim Interim Full Interim Interim Full Interim Interim Full Interim Interim Full
June June Year June June Year June June Year June June Year
2019 2018 2018 2019 2018 2018 2019 2018 2018 2019 2018 2018
$m $m $m $m $m $m $m $m $m $m $m $m
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Asset Solutions
EAAA 1,484.6 1,592.5 3,283.1 157.6 95.2 257.7 124.8 82.7 231.5 72.8 (13.0) 74.1
Asset Solutions
Americas 1,845.4 1,826.9 3,668.2 120.7 104.5 226.8 95.3 93.1 204.7 54.9 40.1 100.8
Specialist
Technical
Solutions 720.3 736.4 1,530.4 79.7 67.8 152.3 65.6 63.2 148.2 41.2 46.3 113.7
Environment
&
Infrastructure
Solutions 704.7 653.7 1,382.8 58.5 36.0 96.2 44.7 33.3 90.7 28.3 15.6 55.5
Investment
Services 33.2 106.9 149.9 14.8 16.4 35.8 14.0 15.7 31.9 12.1 9.9 24.1
Central (2) - - - (47.2) (27.0) (75.0) (48.7) (27.8) (77.1) (61.8) (65.1) (178.4)
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Total 4,788.2 4,916.4 10,014.4 384.1 292.9 693.8 295.7 260.2 629.9 147.5 33.8 189.8
Remove share
of joint
ventures - - - (33.7) (25.5) (83.3) (30.1) (20.9) (71.0) (29.4) (18.3) (58.9)
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Total excluding
joint ventures 4,788.2 4,916.4 10,014.4 350.4 267.4 610.5 265.6 239.3 558.9 118.1 15.5 130.9
---------------- --------- --------- -------- --------- --------- ------- --------- --------- -------
Share of
post-tax
profit from
joint ventures 20.7 8.3 34.4
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Operating
profit 138.8 23.8 165.3
Finance income 3.4 2.1 5.3
Finance expense (80.0) (51.2) (117.1)
---------------- --------- --------- -------- --------- --------- ------- --------- --------- -------
Profit/(loss)
before taxation 62.2 (25.3) 53.5
Taxation (49.1) (26.5) (61.1)
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Profit/(loss)
for the period 13.1 (51.8) (7.6)
---------------- --------- --------- -------- --------- --------- ------- --------- --------- ------- --------- --------- --------
Notes
1. A reconciliation of operating profit to Adjusted EBITDA is
provided in the table below. Adjusted EBITDA represents Adjusted
EBITA before depreciation of property, plant and equipment of
$88.4m (June 2018: $32.7m). Depreciation for the six months to June
2019 includes an additional charge of $61.9m in relation to the
right of use assets recognised under IFRS 16. Adjusted EBITDA and
Adjusted EBITA are provided as they are the units of measurement
used by the Group in the management of its business. Adjusted
EBITDA and Adjusted EBITA are stated before exceptional items (see
note 4).
2. Central includes the costs of certain management personnel in
both the UK and the US, along with an element of Group
infrastructure costs.
3. Revenue arising from sales between segments is not material.
4. Following adoption of IFRS 16, Adjusted EBITDA and Operating
profit have increased by $70.1m and $8.2m respectively due to a
change in classification of costs.
2. Segmental reporting (continued)
Reconciliation of Alternative Performance Measures
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December
2018
$m $m $m
------------------------------------------------ ---------- ---------- ----------
Operating profit per income statement 138.8 23.8 165.3
Exceptional items (note 4) 28.9 101.1 191.3
------------------------------------------------ ---------- ---------- ----------
Operating profit before exceptionals 167.7 124.9 356.6
IAS 17 rental expense (70.1) - -
IFRS 16 depreciation on right of use asset 61.9 - -
------------------------------------------------ ---------- ---------- ----------
Operating profit before exceptionals (excluding
impact of IFRS 16) 159.5 124.9 356.6
------------------------------------------------ ---------- ---------- ----------
Operating profit per income statement 138.8 23.8 165.3
Share of joint venture finance expense
and tax 8.7 10.0 24.5
Exceptional items (note 4) 28.9 101.1 191.3
Amortisation 119.3 125.3 248.8
Depreciation 88.4 32.7 63.9
Adjusted EBITDA 384.1 292.9 693.8
IAS 17 rental expense (70.1) - -
------------------------------------------------ ---------- ---------- ----------
Adjusted EBITDA (excluding impact of IFRS
16) 314.0 292.9 693.8
------------------------------------------------ ---------- ---------- ----------
Amortisation and depreciation expense includes amounts relating
to joint ventures of $0.7m and $3.6m respectively (June 2018: $1.1m
and $4.6m respectively).
3. Revenue
In the following table, revenue is disaggregated by primary
geographical market and major service line. The tables provided
below analyses total revenue excluding our share of joint venture
revenue. The 2018 comparatives have been adjusted to exclude joint
venture revenue and to reflect minor changes in the Group
structure.
AS EAAA AS EAAA AS Americas AS Americas STS STS E&IS E&IS IS IS Total Total
Primary Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18
geographical market $m $m $m $m $m $m $m $m $m $m $m $m
----------------------- ------------------------------- ------- ----------- ----------- ------- ------- ------- ------- ------- ------- ------- -------
US - - 1,592.6 1,520.5 125.3 240.9 504.4 396.4 3.9 52.2 2,226.2 2,210.0
Europe 634.8 700.3 0.7 5.0 238.4 129.7 53.8 108.6 17.1 20.8 944.8 964.4
Rest of the world 849.8 892.2 252.1 301.4 356.6 365.8 146.5 148.7 12.2 33.9 1,617.2 1,742.0
----------------------- ------------------------------- ------- ----------- ----------- ------- ------- ------- ------- ------- ------- ------- -------
Total Revenue 1,484.6 1,592.5 1,845.4 1,826.9 720.3 736.4 704.7 653.7 33.2 106.9 4,788.2 4,916.4
----------------------- ------------------------------- ------- ----------- ----------- ------- ------- ------- ------- ------- ------- ------- -------
Major service lines
Capital Projects 536.0 673.3 1,215.6 1,250.8 - - 123.2 84.6 - - 1,874.8 2,008.7
Operations Services 852.9 755.9 557.9 504.1 - - - - - - 1,410.8 1,260.0
Automation and Control - - - - 171.6 201.7 - - - - 171.6 201.7
Subsea and Export
Systems - - - - 64.5 62.9 - - - - 64.5 62.9
Nuclear - - - - 147.8 139.4 - - - - 147.8 139.4
Mining & Minerals - - - - 181.5 195.5 - - - - 181.5 195.5
Technology and
Consulting - - - - 154.6 136.5 - - - - 154.6 136.5
Transmission &
Distribution 17.9 83.9 - - - - - - 1.4 - 19.3 83.9
Environment &
Infrastructure 4.9 6.4 20.6 19.8 - - 581.5 569.1 - - 607.0 595.3
Industrial Power and
Manufacturing 25.2 34.6 51.3 52.2 - - - - 29.9 92.4 106.4 179.2
Other 47.7 38.4 - - 0.3 0.4 - - 1.9 14.5 49.9 53.3
----------------------- ------------------------------- ------- ----------- ----------- ------- ------- ------- ------- ------- ------- ------- -------
Total Revenue 1,484.6 1,592.5 1,845.4 1,826.9 720.3 736.4 704.7 653.7 33.2 106.9 4,788.2 4,916.4
----------------------- ------------------------------- ------- ----------- ----------- ------- ------- ------- ------- ------- ------- ------- -------
The Group's revenue is largely derived from the provision of
services over time.
For the 6 months to 30 June 2019, 69% (June 2018: 65%) of the
Group's revenue came from reimbursable contracts and 31% (June
2018: 35%) from lump sum contracts.
The following table provides information about receivables,
contract assets and contract liabilities from contracts with
customers -
Trade receivables and contract balances
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December 2018
$m $m $m
---------------------------------------- ----------- ----------- ---------------
Trade receivables 1,320.1 1,332.4 1,287.1
Gross amounts due from customers 976.4 934.7 935.1
Gross amounts due to customers (520.0) (378.7) (407.5)
1,776.5 1,888.4 1,814.7
---------------------------------------- ----------- ----------- ---------------
The contract asset balances (gross amounts due from customers)
primarily relate to the Group's rights to consideration for work
completed but not billed at the reporting date. The contract assets
are transferred to trade receivables when the rights become
unconditional. This usually occurs when the Group issues an invoice
to the customer. The contract liabilities (gross amounts due to
customers) primarily relate to advance consideration received from
customers, for which revenue is recognised over time.
Trade receivables and gross amounts due from customers are
included within the 'Trade and other receivables' heading in the
Group balance sheet. Gross amounts due to customers are included
within the 'Trade and other payables' heading in the Group balance
sheet.
As at 30 June 2019, the Group had received $191.5m (June 2018:
$53.1m) of cash relating to a non-recourse financing arrangement
with one of its banks. An equivalent amount of trade receivables
was derecognised on receipt of the cash.
4. Exceptional items
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the Group's financial performance.
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December
2018
$m $m $m
------------------------------------------ ---------- ---------- ----------
Loss on sale of business (see note 12) 8.9 - -
Redundancy, restructuring and integration
costs 11.2 36.6 71.7
Investigation support costs 8.8 12.7 26.3
Arbitration settlement provision - 10.4 10.4
GMP equalisation - - 31.9
Impairment of investment in EthosEnergy - 41.4 41.4
Impairments recorded by EthosEnergy - - 9.6
28.9 101.1 191.3
Tax charge/(credit) 18.3 8.3 (8.5)
------------------------------------------ ---------- ---------- ----------
Exceptional items including tax 47.2 109.4 182.8
------------------------------------------ ---------- ---------- ----------
In the first half of 2019, the Group disposed of Terra Nova
Technologies and the net loss on sale (after allocating goodwill)
of $8.9m has been included in exceptional items.
Redundancy, restructuring and integration costs of $11.2m have
been incurred in the period. This is made up of continuing
restructuring, redundancy and integration costs associated with the
acquisition of Amec Foster Wheeler in October 2017.
Investigation support costs of $8.8m have been incurred during
the period in relation to ongoing investigations by the relevant
authorities into the historical use of agents in relation to
Unaoil.
An exceptional tax charge of $18.3m has been recorded in the
period reflecting the write off of irrecoverable tax balances
related to joint ventures.
5. Dividends
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December
2018
$m $m $m
----------------------------- ---------- ---------- ----------
Dividends on ordinary shares
Final paid 159.0 155.3 155.3
Interim paid - - 75.7
----------------------------- ---------- ---------- ----------
Total dividends 159.0 155.3 231.0
----------------------------- ---------- ---------- ----------
After the balance sheet date, the directors declared an interim
dividend of 11.4 cents per share (2018: 11.3 cents) which will be
paid on 26 September 2019. The interim financial statements do not
reflect the interim dividend, which will result in an estimated
reduction of $76.5m in equity attributable to owners of the parent.
This will be shown as an appropriation of retained earnings in the
financial statements for the year ended 31 December 2019.
6. Acquisitions
Estimated contingent consideration liabilities at 30 June 2019
amounted to $24.2m (June 2018: $53.2m) and are expected to be paid
over the next year. The amount of contingent consideration payable
is dependent, in part, on the post-acquisition profits of the
acquired entities and the provision made is based on the Group's
estimate of the likely profits of those entities. Where deferred
consideration is payable after more than one year the estimated
liability is discounted using an appropriate rate of interest.
$2.5m was credited to the income statement in relation to a
reduction in the estimate of contingent consideration payable in
the six months to 30 June 2019.
7. Earnings per share
Unaudited Interim Unaudited Interim Audited Full Year
June 2019 June 2018 December 2018
Earnings Earnings
Earnings /(losses) /(losses)
attributable Number Earnings attributable Number Earnings attributable Number Earnings
to equity of per to equity of per to equity of per
shareholders shares share shareholders shares share shareholders shares share
($m) (millions) (cents) ($m) (millions) (cents) ($m) (millions) (cents)
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
Basic
pre-exceptional 61.0 670.9 9.1 56.2 669.2 8.4 173.9 669.6 26.0
Exceptional
items,
net of tax (47.2) - (7.0) (109.4) - (16.3) (182.8) - (27.3)
---------------- ------------ ----------- ---------
Basic 13.8 670.9 2.1 (53.2) 669.2 (7.9) (8.9) 669.6 (1.3)
Effect of
dilutive
ordinary shares - 15.9 (0.1) - - - - - -
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
Diluted 13.8 686.8 2.0 (53.2) 669.2 (7.9) (8.9) 669.6 (1.3)
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
Adjusted diluted
earnings per
share
calculation
Basic 13.8 670.9 2.1 (53.2) 669.2 (7.9) (8.9) 669.6 (1.3)
Effect of
dilutive
ordinary shares - 15.9 (0.1) - 14.3 0.1 - 13.4 -
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
13.8 686.8 2.0 (53.2) 683.5 (7.8) (8.9) 683.0 (1.3)
Exceptional
items,
net of tax 47.2 - 6.9 109.4 - 16.0 182.8 - 26.8
Amortisation
of intangibles
on acquisition,
net of tax 64.1 - 9.3 69.5 - 10.2 144.1 - 21.1
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
Adjusted diluted 125.1 686.8 18.2 125.7 683.5 18.4 318.0 683.0 46.6
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
Adjusted basic 125.1 670.9 18.6 125.7 669.2 18.8 318.0 669.6 47.5
---------------- ------------ ----------- --------- ------------ ----------- --------- ------------ ----------- ---------
The calculation of basic earnings per share is based on the
earnings attributable to owners of the parent divided by the
weighted average number of ordinary shares in issue during the year
excluding shares held by the Group's employee share trusts. For the
calculation of diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of dilutive potential ordinary shares. The Group's dilutive
ordinary shares comprise share options granted to employees under
Executive Share Option Schemes and the Long Term Retention Plan,
shares and share options awarded under the Group's Long Term Plan
and shares awarded under the Group's Employee Share Plan. Adjusted
basic and adjusted diluted earnings per share are disclosed to show
the results excluding the impact of exceptional items and
acquisition related amortisation, net of tax.
In the comparative periods, the Group reported a basic loss per
ordinary share, therefore any potential ordinary shares are
anti-dilutive and are excluded from the calculation of diluted loss
per share. As adjusted diluted earnings per share is a non-GAAP
measure, the potential ordinary shares were not excluded from this
calculation.
The comparative figures in respect of the calculation of
adjusted diluted and adjusted basic EPS have been amended to add
back only acquisition related amortisation, net of tax.
8. Taxation
The taxation charge, including profits from joint ventures, for
the six months ended 30 June 2019 is 23.4% (June 2018: 22.8%) which
is the anticipated effective rate on profit before taxation,
exceptional items and amortisation for the year ending 31 December
2019. The table below shows how these rates reconcile to the
amounts presented in the income statement.
Audited
Unaudited Unaudited Full Year
Interim
June 2019 Interim December
$m June 2018 2018
$m $m
------------------------------------------------ ----------- ----------- ----------
Profit before tax and exceptional items
per the income statement 91.1 75.8 244.8
Joint venture tax 6.9 6.2 16.4
Amortisation (including joint venture
amortisation) 119.3 125.3 248.8
------------------------------------------------ ----------- ----------- ----------
Profit before tax, amortisation and exceptional
items (including share of joint ventures) 217.3 207.3 510.0
------------------------------------------------ ----------- ----------- ----------
Tax charge excluding exceptional items
per the income statement 30.8 18.2 69.6
Joint venture tax 6.9 6.2 16.4
Tax credit on amortisation 13.1 22.8 30.8
------------------------------------------------ ----------- ----------- ----------
Tax charge excluding amortisation and
exceptional items
(including share of joint ventures) 50.8 47.2 116.8
------------------------------------------------ ----------- ----------- ----------
Effective tax rate 23.4% 22.8% 22.9%
------------------------------------------------ ----------- ----------- ----------
The standard effective tax rate, calculated by dividing the
total tax charge per the income statement by total profit before
tax is 78.9% (June 2018: 104.7%).
9. Retirement benefit obligations
In April 2019, the two main UK schemes, the Amec Foster Wheeler
Pension Plan and the John Wood Group PLC Retirement Benefit Scheme
were merged. The merged scheme holds all of the pension assets in a
separately administered fund and is governed by employment laws in
the UK. The Group has a number of other smaller schemes outside the
UK.
The Group's defined benefit schemes are largely closed to future
accrual. For the main UK scheme an interim revaluation of the
Group's pension assets and liabilities has been carried out at 30
June 2019 and the related actuarial losses of $133.6m (June 2018:
$238.8m gains) have been recorded in the Group statement of
comprehensive income. The losses are largely a result of a decrease
in the discount rate in the period. The discount rate is determined
by the scheme actuaries and reflects the return on high quality
corporate bonds at the balance sheet date. A decrease in the
discount rate will increase the defined benefit obligation.
10. Intangible assets
Software
and development Customer contracts Order
Goodwill costs and relationships backlog Brands Total
$m $m $m $m $m $m
--------------------- ---------- ---------------- ------------------ -------- ------ -------
Cost
At 1 January 2019 5,399.3 303.7 867.8 182.2 674.2 7,427.2
Exchange movements 19.5 1.2 4.6 0.6 4.0 29.9
Additions - 52.4 - - - 52.4
Disposals - (15.8) - - - (15.8)
Businesses divested
(see note 12) (33.1) (0.6) - - (7.0) (40.7)
Reclassed as held
for sale (see
note 12) (183.8) (3.0) (26.5) - (15.2) (228.5)
Reclass from current
assets - 8.1 - - - 8.1
--------------------- ---------- ---------------- ------------------ -------- ------ -------
At 30 June 2019 5,201.9 346.0 845.9 182.8 656.0 7,232.6
--------------------- ---------- ---------------- ------------------ -------- ------ -------
Amortisation and
impairment
At 1 January 2019 0.8 212.8 452.2 62.5 42.2 770.5
Exchange movements - (0.6) 4.1 (0.3) 0.2 3.4
Amortisation charge - 46.5 31.5 23.7 16.9 118.6
Disposals - (15.8) - - - (15.8)
Businesses divested
(see note 12) - (0.5) - - (0.5) (1.0)
Reclassed as held
for sale (see
note 12) - (2.1) (4.2) - (1.3) (7.6)
At 30 June 2019 0.8 240.3 483.6 85.9 57.5 868.1
--------------------- ---------- ---------------- ------------------ -------- ------ -------
Net book value
at 30 June 2019 5,201.1 105.7 362.3 96.9 598.5 6,364.5
--------------------- ---------- ---------------- ------------------ -------- ------ -------
11. Provisions
Obligations
Asbestos Project related relating to Other
related litigation provisions disposed businesses provisions Total
$m $m $m $m $m
--------------------- -------------------- ----------------- -------------------- ------------ -------
At 1 January
2019 453.4 301.9 96.1 139.8 991.2
IFRS 16 transition
adjustment (see
note 1) - - - (17.7) (17.7)
Exchange movements (0.1) 1.8 0.2 (3.6) (1.7)
Utilised (24.1) (66.7) (7.6) (7.6) (106.0)
(Credit)/charge
to income statement (0.1) 2.1 (14.3) (7.5) (19.8)
Change in discount
rate 5.8 - - - 5.8
Unwinding of
discount 5.3 - - - 5.3
Businesses divested
(note 12) - - 4.5 - 4.5
Reclassified
to held for sale
(note 12) - - - (2.6) (2.6)
Reclassification
to liabilities (1.7) (4.3) - (0.2) (6.2)
--------------------- -------------------- ----------------- -------------------- ------------ -------
At 30 June 2019 438.5 234.8 78.9 100.6 852.8
--------------------- -------------------- ----------------- -------------------- ------------ -------
Presented as
Current - 71.7 5.1 25.5 102.3
Non-current 438.5 163.1 73.8 75.1 750.5
--------------------- -------------------- ----------------- -------------------- ------------ -------
11. Provisions (continued)
Asbestos related litigation
The Group assumed the majority of its asbestos-related
liabilities when it acquired Amec Foster Wheeler in October 2017.
Whilst some of the asbestos claims have been and are expected to be
made in the United Kingdom, the overwhelming majority have been and
are expected to be made in the United States.
Amec Foster Wheeler's US subsidiaries are defendants in numerous
asbestos-related lawsuits and out-of-court informal claims pending.
Plaintiffs claim damages for personal injury alleged to have arisen
from exposure to, or use of, asbestos in connection with work
allegedly performed during the 1970s and earlier. The estimates and
averages presented have been calculated on the basis of the
historical US asbestos claims since the initiation of claims filed
against these entities.
The number and cost of current and future asbestos claims in the
US could be substantially higher than estimated and the timing of
payment of claims could be sooner than estimated, which could
adversely affect the Group's financial position, its results and
its cash flows.
Some Amec Foster Wheeler US subsidiaries are named as defendants
in numerous lawsuits and out-of-court administrative claims pending
in the US in which the plaintiffs claim damages for alleged bodily
injury or death arising from exposure to asbestos in connection
with work performed, or heat exchange devices assembled, installed
and/or sold, by these entities. The Group expects these
subsidiaries to be named as defendants in similar suits and that
new claims will be filed in the future. For purposes of these
financial statements, management have estimated the indemnity and
defence costs to be incurred in resolving pending and forecasted
claims through to 2050. Although we believe that these estimates
are reasonable, the actual number of future claims brought against
the Group and the cost of resolving these claims could be
higher.
Some of the factors that may result in the costs of asbestos
claims being higher than the current estimates include:
-- an increase in the rate at which new claims are filed and an
increase in the number of new claimants
-- increases in legal fees or other defence costs associated with asbestos claims
-- increases in indemnity payments, decreases in the proportion
of claims dismissed with zero payment and payments being required
to be made sooner than expected
The Group has worked with its advisors with respect to
projecting asbestos liabilities and to estimate the amount of
asbestos-related indemnity and defence costs at each year-end
through to 2050. Each year the Group records its estimated asbestos
liability at a level consistent with the advisors' reasonable best
estimate. The Group's advisors perform a quarterly and annual
review of asbestos indemnity payments, defence costs and claims
activity and compare them to the forecast prepared at the previous
year-end. Based on its review, they may recommend that the
assumptions used to estimate the future asbestos liability are
updated, as appropriate.
The total liability recorded in the Group's balance sheet at 30
June 2019 is based on estimated indemnity and defence costs
expected to be incurred to 2050. Management believe that any new
claims filed after 2050 will be minimal.
In connection with updating the estimated asbestos liability and
related assets, a net interest charge of $5.3m for the time value
of money (June 2018: $4.7m charge) and a yield curve charge of
$5.8m (June 2018: $12.5m credit) for changes in the US Federal
funds rate in the first half of 2019 have been recorded.
In 2019, the basis used to apply the discount rate to the
asbestos liability was changed and the Group now uses the 30-year
US treasury yield curve, which more closely matches the duration of
the liabilities than the 10-year treasury yield curve used in prior
years. Although rates are currently at historic lows, the 30-year
rate of 2.52% is marginally lower than the 10-year rate of 2.66%
applied at 31 December 2018. Had the Group continued to use the
ten-year rate, which was 2.0% at 30 June 2019, the discounting
charge would have been $15.0m higher.
Asbestos related receivables represents management's best
estimate of insurance recoveries relating to liabilities for
pending and estimated future asbestos claims through to 2050. The
receivables are only recognised when it is virtually certain that
the claim will be paid. The Group's asbestos-related assets have
been discounted at an appropriate rate of interest.
The net asbestos liability at 30 June 2019 amounted to $386.2m
(June 2018: $421.8m) and comprised $438.5m in provisions (June
2018: $483.0m) and $52.9m in trade and other payables (June 2018:
$48.1m) less $88.9m in long term receivables (June 2018: $92.5m)
and $16.3m in trade and other receivables (June 2018: $16.8m).
Project related provisions
The Group has numerous provisions relating to the projects it
undertakes for its customers. The value of these provisions rely on
project specific judgements and estimates in areas such as the
estimate of future costs or the outcome of disputes and litigation.
Whether or not each of these provisions will be required, the exact
amount that will require to be paid and the timing of any payment
will depend on the actual outcomes.
Aegis Poland
This legacy AFW project involves the construction of various
buildings to house the Aegis Ashore anti-missile defence facility
for the United States Army Corps of Engineers. The project was
around 77% complete by value at 30 June 2019 and is expected to
be
11 Provisions (continued)
operationally complete towards the end of 2019. Management's
latest estimate is that the loss at completion will be $100.0m
which is unchanged from 31 December 2018 and represents the
expected loss to complete less estimated revenue to be earned.
The full amount of this estimated loss has been previously
recognised in the financial statements. In reaching its assessment
of this loss, management have made certain estimates and
assumptions relating to the date of completion, productivity of
workers on site and the costs to complete. If the actual outcome
differs from these estimates and assumptions, the ultimate loss
will be different. In addition, the Group's assessment of the
ultimate loss includes change orders which have not been agreed
with the customer and management's assessment of liquidated damages
and the current estimate is that these will not be settled until
2021. If the amounts agreed are different to the assumptions made
then the ultimate loss will be different.
Chemical Plant Litigation in the United States
In 2013, one of Amec Foster Wheeler plc's subsidiaries
contracted to engineer, procure and construct a chemical plant for
a client in Texas. In December 2015 the client partially terminated
the contract and in September 2016, terminated the remainder of the
contract and commenced a lawsuit in Texas against the subsidiary
and also Amec Foster Wheeler plc, seeking damages for breach of
contract and warranty, gross negligence, and fraud. The claim
amount is unspecified but the client alleges that the projected
cost for the assigned scope of work is approximately $800.0 million
above the alleged estimate and that the subsidiary's delays caused
it to suffer continuing monthly damages of $25.0 million due to the
alleged late completion of the facility and resultant delay to the
client's ability to sell the expected products from the facility.
We understand that the facility was completed mechanically in late
2017 and began commercial operation in early 2018. The client seeks
recovery of actual and punitive damages, as well as the
disgorgement of the full project fixed fee paid to the subsidiary
(approximately $66.5 million).
The Group believes that the claims lack legal and factual merit
but have provided for an amount representing the fair value of the
exposure upon acquisition of Amec Foster Wheeler. The estimate that
the subsidiary provided was in connection with the client's initial
request for a lump sum bid and highly conditioned. The contract
that was ultimately signed, and which governs the dispute, is a
reimbursable cost plus fixed fee contract, with no guaranteed price
or schedule, wherein the client assumed joint responsibility for
management of the work and development of the project schedule.
Liability for consequential damages is barred, except in the case
of wilful misconduct. Except for gross negligence, wilful
misconduct, and warranty claims, overall liability is capped at 10%
of the contract price (or approximately $100.0 million). Amec
Foster Wheeler has denied the claims and intends to vigorously
defend the lawsuit. It has also interposed a counterclaim in an
amount to be determined. The lawsuit is in the early stages of
proceedings and it would be premature to predict the ultimate
outcome of the matter. The Group has a provision of $68.0m as at 30
June 2019 on this project against disallowed costs and warranties,
which includes $29.0m included as a fair value adjustment on the
acquisition of Amec Foster Wheeler.
Environmental obligations
Certain of the jurisdictions in which the Group operates, in
particular the US and the EU, have environmental laws under which
current and past owners or operators of property may be jointly and
severally liable for the costs of removal or remediation of toxic
or hazardous substances on or under their property, regardless of
whether such materials were released in violation of law and
whether the operator or owner knew of, or was responsible for, the
presence of such substances. Largely as a consequence of the
acquisition of Amec Foster Wheeler, the Group currently owns and
operates, or owned and operated, industrial facilities. It is
likely that, as a result of the Group's current or former
operations, hazardous substances have affected the property on
which those facilities are or were situated. The Group has also
received and may continue to receive claims pursuant to indemnity
obligations from the present owners of facilities we have
transferred, which may require us to incur costs for investigation
and/or remediation. As at 30 June 2019, the Group held provisions
totalling $34.4m (June 2018: $35.2m) for the estimated future
environmental clean-up costs in relation to industrial facilities
that it no longer operates. Whilst the timing of the related cash
flows is typically uncertain, the Group expects that certain of its
remediation obligations may continue for up to 60 years.
Project and environmental litigation
The Group is party to litigation involving clients and
sub-contractors arising out of project contracts. Management has
taken internal and external legal advice in considering known or
reasonably likely legal claims and actions by and against the
Group. Where a known or likely claim or action is identified,
management carefully assesses the likelihood of success of the
claim or action. Generally, a provision is recognised only in
respect of those claims or actions where management consider it is
probable that a settlement will be required. Additionally, however,
the Group recognises provisions for known or likely claims against
an acquired business if, at the acquisition date, it is possible
that the claim or action will be successful and its amount can be
reliably estimated.
Provision is made for management's best estimate of the likely
settlement costs and/or damages to be awarded for those claims and
actions that management considers are likely to be successful. Due
to the inherent commercial, legal and technical uncertainties in
estimating project claims, the amounts ultimately paid or realised
by the Group could differ materially from the amounts that are
recognised in the financial statements. An estimate of future legal
costs is included only in the litigation provision acquired from
Amec Foster Wheeler as on a fair value basis it is reasonable to
include this as it reflects what would be paid by a third party to
assume the liability.
The balance of project related provisions relates to a number of
project provisions which are not individually material or
significant.
11 Provisions (continued)
Obligations related to disposed businesses
As described in note 19 the Group agreed to indemnify certain
third parties relating to businesses and/or assets that were
previously owned by the Group and were sold to them. As at 30 June
2019, the Group recognised indemnity provisions totalling $78.9m
(June 2018: $98.4m). Indemnity provisions principally relate to
businesses that were sold by Amec Foster Wheeler prior to its
acquisition by the Group.
Other provisions
At 30 June 2019, other provisions of $100.6m have been
recognised. This amount includes warranty provisions in respect of
guarantees provided in the normal course of business relating to
contract performance, property related provisions and amounts
provided by the Group's insurance captives.
12. Divestments and assets and liabilities held for sale
Divestments
During the first half of 2019 the Group disposed of Terra Nova
Technologies. The assets and liabilities disposed of are set out in
the table below:
$m
---------------------------------------------------- ------
Intangible assets 39.7
Investment in joint ventures 1.5
Trade and other receivables 22.1
Trade and other payables (16.1)
Net assets disposed 47.2
Cash received and receivable 44.4
Disposal costs (including warranty provision $4.5m) (6.1)
Loss on disposal (see note 4) (8.9)
---------------------------------------------------- ------
Of the $44.4m cash received and receivable, $41.4m was received
in the period.
During the first half of 2019, the Group also disposed of its
investments in the Amec Foster Wheeler Power Machinery Company
Limited, Centro Energia Teverola S.r.l and Centro Energia Ferrara
S.r.l. Disposal proceeds for these divestments, net of cash
disposed amounted to $0.4m and a gain on sale of $3.6m was recorded
in the income statement. The net profit on these disposals is
included in the Group's operating profit before exceptional items,
as the Group considers the restructuring and subsequent sale of
non-core businesses within Investment Services to be part of its
normal activities.
Held for sale
Amounts categorised as held for sale include the assets and
liabilities of STS's Nuclear business. The composition of the
amounts shown on the balance sheet is set out below.
Assets held for sale $m
------------------------------ -----
Intangible assets 220.9
Property, plant and equipment 6.7
Right of use assets 6.9
Trade and other receivables 66.1
Cash and cash equivalents 30.4
331.0
------------------------------ -----
Liabilities held for sale $m
-------------------------- ----
Trade and other payables 56.7
Income tax liabilities 0.6
Deferred tax 4.5
Lease liabilities 7.0
Provisions 2.6
71.4
-------------------------- ----
13. Related party transactions
The following transactions were carried out with the Group's
joint ventures in the six months to 30 June. These transactions
comprise sales and purchase of goods and services in the ordinary
course of business. The receivables include loans to certain joint
venture companies.
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December
2018
$m $m $m
---------------------------------------------- ---------- ---------- ----------
Sales of goods and services to joint ventures 24.4 12.9 60.5
Purchase of goods and services from joint
ventures 4.9 4.8 13.5
Receivables from joint ventures 87.3 118.9 97.2
Payables to joint ventures 3.4 15.9 3.1
---------------------------------------------- ---------- ---------- ----------
In addition, the Group made $9.7m (June 2018: $9.5m) of sales to
a joint venture which acts only as a transactional entity between
the Group and the Group's end customer (at nil gain or loss) and
does not independently trade.
The Group currently pays an annual fee to Dunelm Energy, a
company in which Ian Marchant, the Group Chairman, has an interest,
for secretarial and administration services and the provision of
office space. GBP7,500 (June 2018: GBP7,500) was charged in the six
month period to 30 June.
14. Cash generated from operations
Unaudited Unaudited Audited
Interim Interim Full Year
June 2019 June 2018 December
2018
$m $m $m
------------------------------------------------------------------------------------------- --- ---------- ---------- ----------
Reconciliation of operating profit to
cash generated from operations:
Operating profit 138.8 23.8 165.3
Less share of post-tax profit from joint
ventures (20.7) (8.3) (34.4)
------------------------------------------------------------------------------------------------ ----------
118.1 15.5 130.9
Adjustments (excluding share of joint
ventures)
Depreciation 84.8 28.1 51.6
Loss/(gain) on disposal of property
plant and equipment 1.5 (1.8) 1.4
Impairment of property plant and equipment - - 0.7
Gain on disposal of investment in joint
ventures - - (15.3)
Gain on disposal of subsidiaries (3.6) - -
Amortisation of intangible assets 118.6 124.2 246.3
Share based charges 12.3 9.4 18.7
Decrease in provisions (115.7) (30.5) (182.8)
Dividends from joint ventures 25.8 21.5 38.5
Exceptional items - non-cash impact 22.3 67.9 107.0
Changes in working capital
(excluding effect of acquisition and
divestment of subsidiaries)
Decrease/(increase) in inventories 0.1 0.5 0.1
(Increase)/decrease in receivables (68.3) (136.4) 88.9
(Decrease)/increase in payables (83.7) 252.8 173.6
Exchange movements (4.9) (11.8) (34.3)
------------------------------------------------------------------------------------------------ ----------
Cash generated from operations 107.3 339.4 625.3
------------------------------------------------------------------------------------------------ ---------- ---------- ----------
15. Reconciliation of cash flow to movement in net debt
At 1 January 2019 Cash Exchange movements At 30 June
flow Other 2019
$m $m $m $m $m
-------------------------------------------------- ----------------- ------- ------ ------------------ ----------
Short term borrowings (984.5) 92.1 - - (892.4)
Long term borrowings (1,917.3) (148.5) (1.9) - (2,067.7)
(2,901.8) (56.4) (1.9) - (2,960.1)
Cash and cash equivalents 1,352.7 (201.1) - 5.1 1,156.7
Cash included in assets held for sale (see note
12) 24.2 6.2 - - 30.4
Restricted cash 11.7 (11.7) - - -
Net debt before leases (1,513.2) (263.0) (1.9) 5.1 (1,773.0)
Leases (604.0) 80.6 (92.1) - (615.5)
Net debt including leases (2,117.2) (182.4) (94.0) 5.1 (2,388.5)
-------------------------------------------------- ----------------- ------- ------ ------------------ ----------
Cash at bank and in hand at 30 June 2019 includes $828.8m
(December 2018: $942.0m) that is part of the Group's cash pooling
arrangements. For internal reporting this amount is netted with
short-term overdrafts and presented as a net figure on the Group's
balance sheet. However, in preparing these financial statements,
the Group has grossed up both its cash and short-term borrowings
figures by this amount.
The lease liability at 30 June is made up of long term leases of
$445.5m, short term leases of $163.0m and $7.0m which has been
classified as held for sale (see note 12).
The other movement of $94.0m in the above table represents new
IFRS 16 leases entered into of $77.2m during the first half,
interest expense of $14.9m and amortisation of bank facility fees
of $1.9m.
16. Share based charges
Share based charges for the period of $12.3m (June 2018: $9.4m)
relate to options granted under the Group's executive share option
schemes and awards under the Long Term Plan. The charge is included
in administrative expenses in the income statement.
17. Financial risk management and financial instruments
Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange and cash flow
interest rate risk), credit risk and liquidity risk. The condensed
interim financial statements do not include all financial risk
management information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's 2018 Annual Report and Accounts.
There have been no material changes in the risk management
function or in any risk management policies since 31 December
2018.
Fair value of non-derivative financial assets and financial
liabilities
The fair value of short-term borrowings, trade and other
payables, trade and other receivables, short-term deposits and cash
at bank and in hand approximates to the carrying amount because of
the short maturity of interest rates in respect of these
instruments.
Derivative financial assets and liabilities
The Group enters into forward contracts to hedge foreign
exchange exposures arising in the normal course of business. The
Group also hedges against changes in interest rates by entering
into interest rate swaps. The fair values of these derivative
financial instruments are included in financial assets and trade
and other payables in the Group balance sheet. The fair values at
30 June 2019 are not significant.
18. Capital commitments
At 30 June 2019 the Group had entered into contracts for future
capital expenditure amounting to $12.9m. The expenditure relates to
property plant and equipment and intangible assets and has not been
provided for in the financial statements.
19. Contingent liabilities
Cross guarantees
At the balance sheet date, the Group had cross guarantees
without limit extended to its principal bankers in respect of sums
advanced to subsidiaries.
Legal Claims
From time to time, the Group is notified of claims in respect of
work carried out. For a number of these claims the potential
exposure is material. Where management believes we are in a strong
position to defend these claims no provision is made. At any point
in time there are a number of claims where it is too early to
assess the merit of the claim, and hence it is not possible to make
a reliable estimate of the potential financial impact.
Employment claims
The Group is aware of challenges to historic employment
practices which may have an impact on the Group. This includes a
challenge by HMRC into the historic application of employer's
National Insurance Contributions to workers on the UK Continental
Shelf. We believe that we are in a strong position to defend this
challenge and that our technical position is robust, therefore as a
result we do not expect that it is probable that a liability will
arise and no provision has been made. The maximum potential
exposure to the Group should we be unsuccessful in our position,
including interest, is around $27.0m.
In addition, previous court cases have challenged the UK's
historic interpretation of EU legislation relating to holiday pay
and this may have an impact on all companies who have employees in
the UK, including the Group. At this point, we do not believe that
it is possible to make a reliable estimate of the potential
liability, if any, that may arise from these challenges and
therefore no provision has been made.
Indemnities and retained obligations
The Group has agreed to indemnify certain third parties relating
to businesses and/or assets that were previously owned by the Group
and were sold to them. Such indemnifications relate primarily to
breach of covenants, breach of representations and warranties, as
well as potential exposure for retained liabilities, environmental
matters and third party claims for activities conducted by the
Group prior to the sale of such businesses and/or assets. We have
established provisions for those indemnities in respect of which we
consider it probable that there will be a successful claim. We do
not expect indemnities or retained obligations for which a
provision has not been established to have a material impact on the
Group's financial position, results of operations or cash
flows.
Investigations
The Group has received voluntary requests for information from,
and continues to cooperate with, the US Securities and Exchange
Commission ("SEC") and the US Department of Justice ("DOJ") in
connection with their ongoing investigations into Amec Foster
Wheeler in relation to Unaoil and in relation to historical use of
agents and certain other business counterparties by Amec Foster
Wheeler and its legacy companies in various jurisdictions.
Amec Foster Wheeler made a disclosure to the UK Serious Fraud
Office ("SFO") about these matters and, since April 2017, in
connection with the SFO's investigation into Unaoil, the SFO has
required Amec Foster Wheeler to produce information relating to any
relationship of Amec Foster Wheeler with Unaoil or certain other
third parties.
In July 2017, the SFO opened an investigation into Amec Foster
Wheeler, predecessor companies and associated persons. The
investigation focuses on the past use of third parties and possible
bribery and corruption and related offences and relates to various
jurisdictions. The Group is co-operating with and assisting the SFO
in relation to this investigation. Notifications of certain matters
within the above investigations have also been made to the relevant
authorities in Brazil (namely, the Federal Prosecution Service and
the Office of the Comptroller General).
Independently, the Group has conducted an internal investigation
into the historical engagement of Unaoil by legacy Wood Group
companies, reviewing information available to the Group in this
context. This internal investigation confirmed that a legacy Wood
Group joint venture engaged Unaoil and that the joint venture made
payments to Unaoil under agency agreements. In September 2017, the
Group informed the Crown Office and Procurator Fiscal Service
("COPFS"), the relevant authority in Scotland, of the findings of
the internal investigation. It has been agreed between the SFO and
COPFS that COPFS has jurisdiction in respect of this investigation.
With the consent of COPFS, the Group has taken steps to conclude
its investigations and intends to engage in a transparent and
cooperative manner with COPFS regarding matters within COPFS'
jurisdiction.
Depending on the outcome of the above matters, the Group could
face potential civil and criminal consequences, as well as other
adverse consequences for its operations and business including
financial penalties and restrictions from participating in public
contracts. At this time, however, it is not possible to make a
reliable estimate of the expected financial effect that may arise
in relation to any of those matters and therefore no provision has
been made for them in the financial statements.
19. Contingent liabilities (continued)
Tax planning
Recent changes to the tax environment, including the OECD's
project around Base Erosion and Profit Shifting have brought into
question tax planning previously undertaken by multinational
entities. There have been several recent high profile tax cases
against tax authorities and large groups. The European Commission
continues formal investigations to examine whether decisions by the
tax authorities in certain European countries comply with European
Union rules and has issued judgements in some cases which are being
contested by the groups and the countries affected. The Group is
monitoring the outcome of these cases in order to understand
whether there is any risk to the Group.
Specifically, the EC issued its decision regarding the UK
Controlled Foreign Companies (CFC) rules and whether a financing
exemption constituted state aid in April. The decision found that
in certain circumstances the financing exemption constituted state
aid. This is being contested by the UK Government and a number of
groups as to whether the technical basis for the decision is
correct. The application of the decision is also judgemental and
there is no consensus regarding how it should be applied. Based on
the Group's current assessment of such issues and the Group's
specific circumstances, it is not currently considered probable
that there will be an outflow in respect of these issues and no
provision has been made in the financial statements. The maximum
potential exposure to the Group of the EC CFC challenge, including
interest, is around $66.0m.
20. Subsequent events
On 19 August 2019 the Group announced the sale of its Nuclear
business for a cash consideration of around $305 million (GBP250
million). Closing is conditional upon, amongst other things,
obtaining anti-trust clearance from the Competition and Markets
Authority ("CMA") and is currently anticipated before the end of Q1
2020. As set out in note 12, this business was classified as held
for sale at 30 June 2019.
Statement of directors' responsibilities
for the six month period to 30 June 2019
We confirm that to the best of our knowledge:
-- the interim condensed set of financial statements has been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
issued by the IASB and adopted by the EU;
-- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
The directors of John Wood Group PLC are listed in the Group's
2018 Annual Report and Accounts. On 1 May 2019, Linda Adamany
resigned from the Board and on 10 May 2019, Adrian Marsh was
appointed to the Board.
R Watson
Chief Executive
D Kemp
Chief Financial Officer
19 August 2019
Independent review report to John Wood Group PLC
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2019 which comprises the Group income
statement, the Group statement of comprehensive income, the Group
balance sheet, the Group statement of changes in equity, the Group
cash flow statement and the related explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2019 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU and
the Disclosure Guidance and Transparency Rules ("the DTR") of the
UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
The impact of uncertainties due to the UK exiting the European
Union on our review
Uncertainties related to the effects of Brexit are relevant to
understanding our review of the condensed financial statements.
Brexit is one of the most significant economic events for the UK,
and at the date of this report its effects are subject to
unprecedented levels of uncertainty of outcomes, with the full
range of possible effects unknown. An interim review cannot be
expected to predict the unknowable factors or all possible future
implications for a company and this is particularly the case in
relation to Brexit.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Catherine Burnet
for and on behalf of KPMG LLP
Chartered Accountants
37 Albyn Place
Aberdeen
AB10 1JB
19 August 2019
Shareholder information
Payment of dividends
The Company declares its dividends in US dollars. As a result of
the shareholders being mainly UK based, dividends will be paid in
sterling, but if you would like to receive your dividend in dollars
please contact the Registrars at the address below. All
shareholders will receive dividends in sterling unless requested.
If you are a UK based shareholder, the Company encourages you to
have your dividends paid through the BACS (Banker's Automated
Clearing Services) system. The benefit of the BACS payment method
is that the Registrars post the tax vouchers directly to the
shareholders, whilst the dividend is credited on the payment date
to the shareholder's Bank or Building Society account. Shareholders
who have not yet arranged for their dividends to be paid direct to
their Bank or Building Society account and wish to benefit from
this service should contact the Registrars at the address below.
Sterling dividends will be translated at the closing mid-point spot
rate on 30 August 2019 as published in the Financial Times on 31
August 2019.
Officers and advisers
Secretary and Registered Office Registrars
M McIntyre Equiniti
John Wood Group PLC Aspect House
15 Justice Mill Lane Spencer Road
Aberdeen Lancing
AB11 6EQ West Sussex
BN99 6DA
Tel: 01224 851000 Tel: 0371 384 2649
Stockbrokers Independent Auditor
JPMorgan Cazenove Limited KPMG LLP
Morgan Stanley Chartered Accountants and Statutory
Auditors
37 Albyn Place
Company solicitors Aberdeen
Slaughter and May AB10 1JB
Financial calendar
6 months Year ending
ended 31 December
30 June 2019 2019
Results announced 20 August March 2020
2019
Ex-dividend 29 August April 2020
date 2019
Dividend record 30 August April 2020
date 2019
Dividend payment 26 September May 2020
date 2019
Annual General May 2020
Meeting
The Group's Investor Relations website can be accessed at
www.woodplc.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR ZMGMRLLFGLZM
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August 20, 2019 02:00 ET (06:00 GMT)
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