FTSE 250 movers: Wood Group tanks; XPS Pensions surges
By Frank Prenesti
Date: Friday 14 Feb 2025
(Sharecast News) - FTSE 250 (MCX) 20,973.83 0.28%
Shares in Wood Group were tanking on Friday morning, after it flagged weaker-than-expected fourth-quarter trading in an update and warned of negative free cash flow in 2025.
The FTSE 250 company said it expected to report full-year 2024 adjusted EBITDA of $450m to $460m and adjusted EBIT of $205m to $215m.
It said actions taken in the fourth quarter to mitigate weaker-than-expected trading included canceling employee bonuses and actively managing working capital.
A cost reduction programme launched last March remained on track to deliver $60m in annualised savings in 2025, with a further $85m of savings targeted from 2026 onward.
In total, the measures aimed to reduce Wood's cost base by $145m between 2023 and 2026.
For 2025, Wood was expecting double-digit growth in adjusted EBITDA and adjusted EBIT, excluding the impact of disposals, but now forecast negative free cash flow of between $150m and $200m.
That was attributed to lower-than-expected underlying EBITDA growth, a $70m one-off working capital unwind, costs related to the independent review, and legacy claims liabilities.
It said it was planning to raise $150m to $200m from disposals to offset the cash outflow and maintain debt levels.
Average net debt was expected to remain around $1.1bn in 2025.
Looking ahead, Wood said it expected to generate positive free cash flow in 2026, driven by operating cash flow improvements, EBITDA growth, incremental cost savings, and a reduction in exceptional cash costs.
The company reiterated that its legacy claims liabilities, estimated at $150m, would be paid and extinguished over the next three years.
On refinancing, Wood noted that the majority of its debt facilities mature in October 2026.
The firm said it was conducting a detailed review of refinancing options and engaging with lenders, including assessing the implications of any prior-year adjustments arising from the independent review.
"This is a difficult announcement amid our transformation," said chief executive officer Ken Gilmartin. "While we have made progress, I am disappointed in our financial performance. Consequently, we are taking decisive actions to ensure we can meet the opportunities we have in growing markets, principally energy."
Gilmartin said that while the likely findings from the independent review were expected to have "no material impact" on the group's cash position and future cash generation, it would provide areas to focus on, as the firm initiated steps now to further improve its financial culture, governance and controls.
"We have announced further actions to address the cost base of the business to right size Wood for the future, and have laid out a very clear route to positive free cash flow in 2026.
"As we look ahead, notwithstanding the challenges today, I am confident the fundamentals of this company remain strong - we are in growing markets, with considerable in-demand engineering skills, trusted client relationships, and we're well positioned to grow the business."
XPS Pensions Group said in an update on Friday that it anticipated full-year results for the year ending 31 March to be materially ahead of expectations, driven by strong demand for its services and improved operational efficiency.
The FTSE 250 company said it now expected full-year revenue to range between £226m and £229m, reflecting year-on-year growth of 15% to 16%.
Demand had been supported by regulatory changes, new client wins, and the inflation-linked nature of its contracts.
Key growth drivers included GMP equalisation, rectification projects following the McCloud judgment, and increased activity in the risk transfer market.
XPS highlighted disciplined cost management and investments in technology as factors contributing to improved operational gearing.
As a result, the board said it expected the company's full-year performance to surpass previously-upgraded forecasts.
Looking ahead, the firm said it expected regulatory changes to continue shaping the workplace pensions sector, following recent government announcements.
Ferrexpo shares rallied on hopes of an end to the war in Ukraine where the steel pellet maker has significant operations.
Market Movers
FTSE 250 - Risers
XPS Pensions Group (XPS) 380.00p 9.51%
Ferrexpo (FXPO) 100.40p 7.84%
Fidelity China Special Situations (FCSS) 254.00p 4.53%
Hochschild Mining (HOC) 200.50p 4.21%
Bakkavor Group (BAKK) 150.00p 4.17%
Lion Finance Group (BGEO) 5,250.00p 2.14%
Frasers Group (FRAS) 622.50p 2.13%
Senior (SNR) 164.40p 2.11%
Indivior (INDV) 808.50p 2.08%
Man Group (EMG) 215.20p 1.99%
FTSE 250 - Fallers
Wood Group (John) (WG.) 38.20p -41.55%
Tate & Lyle (TATE) 573.50p -2.80%
Wizz Air Holdings (WIZZ) 1,648.00p -2.31%
JPMorgan Indian Investment Trust (JII) 969.00p -1.92%
4Imprint Group (FOUR) 5,650.00p -1.91%
NCC Group (NCC) 137.00p -1.86%
Raspberry PI Holdings (RPI) 684.75p -1.62%
Genus (GNS) 1,866.00p -1.48%
Bellway (BWY) 2,448.00p -1.29%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 277.00p -1.25%
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