12.04pm: John Wood Group falls after taking US$115mln legal hit
Wood Group (John) Plc saw its shares slip 3% after confirming the settlement of a long standing legal wrangle would cost it US$115mln.
In 2016, Enterprise Products Operating LLC filed a lawsuit against Amec Foster Wheeler, a company Wood acquired in 2017, and one of its subsidiaries.
It related to alleged cost increases and delays on a cost reimbursable plus fixed fee contract secured in 2013 to engineer, procure and construct a propane dehydrogenation unit in Mont Belvieu, Texas.
Settlement has now been agreed and will be paid in one instalment within the next seven days.
John Wood said it expects net debt to be around the middle of its target range of 0.5x to 1.5x net debt, including the payment of this settlement and the planned decision to use part of the proceeds of the Built Environment Products sale to normalise working capital.
11.17am: Redrow hit by double whammy
Shares in Redrow PLC (LSE:RDW) fell as Citi downgraded the stock to neutral as it believes the risk/reward now looks more balanced at current valuation.
“Although a modest normalisation in mortgage rates should reduce the risk of a steep house price decline, we believe the elevated rate environment still drives materially lower demand and site absorption impacting the trajectory of the outlet pipeline on a 2-3 year view” the broker said.
In addition Citi highlighted the softer trends noted in recent trading point to a higher risk of cancellations and incentives across the homemover regional markets, which may have been the biggest beneficiary of the strong market dynamics since the pandemic and represent a core part of the group's exposure.
“We also believe the recent investment in divisional growth in Crawley hinders scope for significant overhead optimisation near term if market conditions worsen from here” Citi commented.
Shares in the company fell 3%.
10.05am: Informa surges after rising guidance
Shares in business publisher and events organiser Informa PLC (LSE:INF) stormed 5% higher as it upgraded its full-year outlook on the back of strong underlying revenue growth in the first 10 months of the year.
The firm reported underlying revenue growth of 41% in its continuing business during the period, thanks to strong trading in all three of its business-to-business markets businesses and in its academic market business.
Informa increased its guidance range for revenue to between £2.30bn to £2.35bn for 2022 with adjusted operating profits forecast between £490mln and £505mln to reflect "further outperformance of live and on-demand events" in North American, Europe, the Middle East and Africa, and Southeast Asia.
Victoria Scholar, head of investment, interactive investor said: “The post-pandemic return to physical events has helped spur growth for Informa with B2B demand and Academic Markets enjoying impressive growth.”
“Informa also continued to return cash to shareholders with over £450mln of its £725mln share buyback programme now completed and the resumption of its ordinary dividend.”