Today’s Falling Knife: John Wood Group PLC Plunges 10%

… but John Wood Group PLC (LON:WG) lifts interim dividend by 24.6%.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Shares in Wood Group (LSE: WG) fell 10% in early trade this morning, following weaker-than-expected half-time results from the six months ending 30 June 2013.

Investors were disappointed in the oil and gas services company’s announcement that its business in Western Canada, which represents just over 5% of divisional revenue, has weakened further. Wood Group does not expect this business to recover during 2014, prompting the dive in share price.

Elsewhere, the firm saw growth in EBITA of 18.6% in the first half, and anticipates full-year performance in line with expectations. Profit before tax and exceptional items rose 16.6%, to $186.6m from $160m at H1 2012.

Shareholders saw a sizeable increase in the interim dividend, which lifted by 24.6% to 7.1 cents from 5.7 cents for the first of 2012, following a 19% jump in adjusted earnings per share to 44.5 cents.

Chief executive officer Bob Keiller commented:

“We have achieved good growth in the first half and remain confident of achieving full year performance in line with expectations. In March, I talked about our focus on increasing collaboration across Wood Group; this is progressing well and we have already seen new business opportunities driven by people working more closely together. Activity levels generally remain healthy and we believe the Group is well positioned for future growth.”

Today’s fallback looks likely to intrigue some contrarian investors, with the shares having broken the 900p barrier last week. Whether you think these are just short-term worries for the engineering group that are outweighed by its long-term potential, though, is up to you, of course.

But if you are looking for alternative investment opportunities, this exclusive wealth report reviews five particularly attractive possibilities in the FTSE 100.

Indeed, all five opportunities offer a mix of robust prospects, illustrious histories and dependable dividends, and have just been declared by the Fool as 5 Shares You Can Retire On! Just click here for the exclusive report — it’s completely free.

> Sam does not own shares in Wood Group.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »