Wood Group PLC: Detailed Financial Analysis and Acquisition Impact

This report provides a company analysis of Wood Group PLC, a UK-based entity in the energy sector and part of the FTSE 350. It examines the company's background, including its establishment by Ian Wood in 1982, and its growth into a major player in the energy sector. The report discusses the trends of the last five financial years, highlighting revenue, adjusted EBITDA, operating profit, and operating profit before exceptional items. A significant focus is placed on the acquisition of Amec Foster Wheeler in 2017, exploring the reasons behind the acquisition, such as achieving economies of scale and gaining a top market position, as well as the purchase consideration of £2.2 billion. The report also touches on non-financial aspects like greenhouse gas emissions and technological upgrades that influenced the acquisition decision. It concludes that Wood Group PLC is performing well based on the company analysis, referencing Zuhri, S., Fahlevi, et. al. (2020) and Bassiouny, A., et, al. (2021).

COMPANY ANALYSIS

INTRODUCTION
 Company analysis is a set of practice to examining aspects of an organization.
 in the report Wood group plc has been taken into consideration, it is UK based entity and also
in FTSE 350, registered at London Stock exchange.
 The report examined about Wood Group PLC which is engaged in energy sector, in the year
2017 it went for acquisition of Amec plc, so report deeply evaluated the issue.

BACKGROUND INFORMATION
 Wood group plc is a UK based organization which is operating its business in energy
and build environment sector.
 the organization was stablished by Ian wood in Aberdeen, Scotland, UK.
 it came into existence in the year 1982. The entity was built to work in the energy
sector over the time it has made great achievements and now is one among FTSE 350
companies.
 HTG plc, VLS plc, Gulf Marine service, China New Energy limited are some of the
biggest competitors.

TRENDS OF LAST FIVE FINANCIAL
YEARS ARE AS FOLLOWS-


years 2020 2019 2018 2017 2016


revenue
7564
9890
11036
6169
4934


adjusted
EBITDA
margin


8.3
8.6
5.7
6.0
7.4


adjusted
EBITDA


630
855
630
372
64.1


operating
profit
before
exceptiona
l items


214
411
357
212
244


operating
profit


-33
303
-7.6
-30.0
34.4

2020 2019 2018 2017 2016
-2000
0
2000
4000
6000
8000
10000
12000
revenue adjusted EBITDA operating profit before exceptional items operating profit
MARKET TRENDS

DISCUSSION OF ACQUISITION
 The salient reason of the acquisition was to get advantage of economies of scale.
 At the same time, it would have helped to get top position in the market.
 The main reason of acquisition of Amec foster wheeler was to grab bigger market share
and becoming leader of the engineering and energy sector.
 Purchase consideration which was paid in order to take control was £ 2.2 billion.
 By giving such mammoth amount it took control on North Sea operations of the entity.

WHERE SOME STEPS WERE TAKEN TO
GET THE DATA INTO ACCOUNTS
 Acquisition data was decided.
 Acquirer was identified.
 Consideration amount has been calculated keeping goodwill amount in mind.
 Reorganization and measurement was carried out.
 Non-controlling interests were paid their amount.

NON-FINANCIAL ASPECTS AND THEIR ROLE
 There are some non-financial aspects too which are behind making such decision.
 Greenhouse gas emission, technological upgradation forced the entity to go for
acquisition.
 As it is being seen, technology field is getting evolved with the time so there was
need to enhance capacity.
 The entity was having negative operating profits which were -30 million pounds so it
was needed to go for acquisition.

CONCLUSION
 From the report above it can be concluded that the organization
is performing good as per our company analysis.
 The report broadly discussed various aspects on the basis of its
last five years’ financial statements.

REFERENCES
 Zuhri, S., Fahlevi, et. al. 2020. The impact of merger and acquisition on financial performance in
Indonesia. Journal of Research in Business, Economics, and Education, 2(1).
 Bassiouny, A., et, al. 2021. Dice manufacturing company: the acquisition decision. Emerald Emerging
Markets Case Studies.