WOOD Group, the Scottish oil services provider propelled into the FTSE-100 last month, rose to a fresh record high yesterday after signalling results would again beat market forecasts.
In a statement ahead of the company's annual general meeting on Thursday, chairman Sir Ian Wood said strong worldwide demand for energy meant the group had made a "very good" start to the year, and now expect to be "somewhat ahead of expectations".
Analysts had expected Aberdeen-based Wood to report earnings before interest, tax, depreciation and amortisation of around $391 million in 2008. However, the statement suggests the Aberdeen-based company could beat this by around 5 per cent. Shares added 7p to 470p, a record closing price.
Wood said the strongest performance across the group had come from the engineering and production facilities business, which has won work in a string of major international project in recent months.
The highest profile was a "multi-million-pound" deal to help build a 600km pipeline from the Shtokman field for Russian giant Gazprom, one of the world's biggest natural gas projects, announced in March.
Wood said the business has also won contracts for projects in the Timor Sea for the Sunrise gas development, as well as a refinery expansion in Saskatchewan in Canada.
The business also holds a leading position in the UK sector of the North Sea, involved in a range of brown-field engineering and modifications projects.
Wood said the well-support business was showing a good overall performance, with the US market "improving", while its gas turbines division was attempting to increase the amount of work under long-term contract to boost margins. "In summary, the healthy markets and ongoing programme of investment in both organic growth and acquisitions have resulted in a very good start to the year," Wood said.
The company also appeared to hint at a renewed acquisition drive after stating it had increased its debt facilities to almost $1 billion.
Wood said yesterday that as well as a "strong" financial position, it had increased its banking facilities by $200m to $950m "which provides a robust platform for future growth".
A spokesman for the company denied the statement was signalling a change in acquisition strategy or capital expenditure, claiming the reference to debt was a financial reporting requirement.
Analysts at Evolution Securities said forecasts were under review, but are now forecasting earnings per share of 50p, and increased its target price on Wood Group by 10 per cent to 550p.
The full article contains 421 words and appears in The Scotsman newspaper.
