Oil services firm Wood (WG.) is winning the market over with 2014 results which show double digit growth in sales and profits despite the collapse in oil prices. A 25% hike to the dividend is a useful signal of confidence in the future too and the shares are marked up 6.4% to 670p.
The company notes its focus on operational expenditure – rather than large capital projects – should enable it to remain resilient in the face of weaker crude. It is also taking 'a number of actions' to cope with the new realities in the industry including focusing on business development to highlight to customers how to reduce cost and increase efficiency. Wood itself is on its own efficiency drive, looking to defer or cut $30 million worth of costs compared with last year.
Drilling a little more deeply into the 2014 numbers revenue gushes up 14.3% to $6.57 billion as strong growth in the PSN Production Services division more than offset the anticipated reduction in Wood Group Engineering and weaker performance from turbines, with pre-tax profits before exceptional items rising 10.9% at $414.5 million. It will be interesting to see if this relatively robust performance is maintained when the group updates on trading alongside its AGM (usually scheduled for May).
Today's announcement is certainly finding support amongst traders in the short-term, Lewis Sturdy, dealer at online trading specialist London Capital Group, says: ‘A very healthy looking performance against a difficult second half of the year for anyone in the oil space. Shares have been coming off a low base since last month after declining in line with the fall in crude prices, so a strong set of numbers is certainly going to help them stand out in the current environment.'