WTI $53.88 +48c, Brent $56.54 +36c, Diff $2.66 +25c, NG $2.77 -5c
A weak dollar ahead of the Fed meeting helped in a quiet market with the US closed for Presidents Day. Net long positions have crept up to another high and with the data from Saudi Arabia confirming the cutbacks, the price picked up.
A short blog today as I am off to see a couple of companies (not Wood Group as I am now off their list of ‘approved persons’!)
Wood Group figures today are broadly in line with expectations carefully managed but that is about the best that can be said for them. Operating profit was $244m but $34.4m at the net level giving EPS of 7.5p and EBITA was $363m down 22.8%. Exceptional costs were $140m which included the kitchen sink but margins were a creditable 7.4% and show the board’s plans for the business.
The dividend was 33.3p in total, up the 10% as prescribed by existing policy and against EPS of 7.5p (64.1p adjusted fully diluted) with a rise clearly untenable, so it is no surprise to see previous management’s’ policy ripped up and replaced with ‘progressive in line with cash flow and earnings’. Depending on how you look at the earnings number the divvi might be covered but I would suggest that shareholders should prepare themselves for a shock unless business picks up dramatically in the first half of this year, not something that the statement suggests.
WG shares have come off 10% today and are 20% off the recent peak as the market realises that the service companies aren’t all going to pick up as quickly as some of the E&P’s have, the coming results season will bring mixed fortunes and with Wood in the stronger camp this may be a portent of things to come…
It was never going to be for Sutton and on the night they did well to keep the score down and left the FA Cup with a huge amount of respect all round. The Gooners now head for a home tie against Lincoln City and a likely semi-final spot, again. Who’s to say that Arsene may be evicted being second in the Prem and the FA Cup in his hand luggage, be careful of what you wish for eh?