John Wood Group Share Price Plummets to Historic Low as Cash Crisis Deepens

The engineering consultancy John Wood Group has witnessed its shares plunge by more than 55% following revelations of severe financial difficulties and governance concerns. The company’s announcement of a potential £200 million cash burn this year has sent shockwaves through the market, marking a dramatic reversal from previous forecasts of “significant” positive cash flow.

The Aberdeen-based firm outlined plans to divest assets worth up to £200 million to counterbalance the unexpected financial downturn. This strategic move comes alongside the cancellation of executive and staff bonuses after disappointing fourth-quarter performance. The company’s leadership has initiated a comprehensive cost-saving programme targeting £85 million in annual reductions from next year.

Chief Executive Ken Gilmartin expressed his disappointment, stating: “This is a difficult announcement amid our transformation. While we have made progress, I am disappointed in our financial performance.” The company’s troubles have been compounded by findings from an independent Deloitte review, which identified significant weaknesses in financial culture, governance, and controls.

The market response has been severe, with shares closing at 29 pence, marking a new historic low. This represents a staggering 75 per cent decline in value over the past year. The company’s net debt is expected to hover around £1.1 billion this year, raising concerns about its ability to meet debt obligations maturing in October 2026.

Despite these challenges, Wood Group’s order book shows signs of resilience, increasing to £6.2 billion by December’s end, up from £5.4 billion in September. However, industry analysts remain cautious, suggesting that meaningful recovery may not materialise until 2026.

The company’s current predicament has sparked speculation about potential takeover opportunities, with previous suitors Sidara and Apollo possibly reconsidering their positions at these significantly reduced valuations. The outcome of the ongoing independent review and the company’s ability to execute its turnaround strategy will be crucial in determining its future trajectory.