Stocks in Limelight: John Wood Group (John) Plc & Sanne Group Plc

John Wood Group (John) Plc

John Wood Group Plc (LON: WG.) is the UK based company which provides solutions throughout the life cycle of assets. The company’s broad range of industrial market solutions includes environment & infrastructure, clean energy, mining, nuclear, upstream oil & gas, midstream oil & gas, downstream oil & gas, power & process and general industrial sectors. The company is entirely dedicated to supporting customers to meet the targets of energy change and climate shifts. The company is operating in more than 60 countries with more than sixty thousand employees in 400 plus offices.

Trading Update

On 7th November 2019, the company hosted a presentation for analysts and investors on capital markets. This presentation provided in-depth information on the company’s strategic objectives for the medium term, which explained the macro trends and essential growth factors in the markets that could help shape the entity’s business.

The company also announced that sale on nuclear business for $305 million was progressing as expected in the direction of conclusion, which is projected in the first quarter of 2020 and could speed up growth to target leverage. The company further announced that activity and margins in E&IS remained healthy, whereas in STS, activity and margins were lower than expected.

Asset Solutions EAAA performed strongly whereas Asset Solutions Americas benefited from increased downstream & chemicals activity even though shale movement was slow.

New Updates

On 20th August 2019, the company announced the sale of its nuclear business to Jacobs’ subsidiary for a £250 million of cash consideration ($305 million approximately) indicating a multiple of around 12.4x of £20.2 million ($26.3 million) on EBITDA for the year 2018.

Financial Highlights

On 20th August 2019, the company announced its half-yearly financial report for the period ended 30th June 2019 through a press release. The company reported that the dividend per share increased by 0.9% to 11.4 cents in H1 FY2019 as compared to 11.3 cents in H1 FY2018.

The company’s revenue decreased by 2.6% to $4,788 million in the first half of FY2019 as compared to $4,916 million in the first half of the FY2018. The company’s Adjusted EBITDA (excluding impact of IFRS 16) increased by 7.2% to $314 million in the first half of FY2019 as compared to $293 million in the first half of the FY2018 whereas like for like adjusted EBITDA (excluding impact of IFRS 16) increased by 12.1% to $314 million in the first half of FY2019 as compared to $280 million in the first half of the FY2018

The operating profit before exceptional items increased by 34.4% to $168 million in the first half of FY2019 as compared to $125 million in the first half of the FY2018 whereas the Operating profit increased by 479.2% to $139 million in the first half of FY2019 as compared to $24 million in the first half of the FY2018.

The profit for the period increased to $13 million in the first half of FY2019 as compared to a loss of $52 million in the first half of the FY2018. The basic earnings per share of the company increased to 2.1 cents in the first half of the fiscal year 2019 versus a loss of 7.9 cents in H1 FY2018.

(Sources: LSE)

Share Price Performance

On 13th December 2019, at 10:54 AM GMT, while writing, WG share price was reported to be trading at GBX 383.70 per share on the LSE, an increase of 5.59 per cent or GBX 20.30 per share, as compared to the previous day’s closing price, which was reported to be at GBX 363.40 per share.

On 09th January 2019, the shares of WG were GBX 607.60, which was highest ever and reached to GBX 314.0 on 6th December 2019 which was lowest ever in the last 52 weeks range. Today’s share price was down by 36.84 per cent from 52-week highest price whereas the same share price was up by 22.20 per cent from the 52-week lowest price.

The company’s market capitalisation was reportedly valued to be at GBP 2.49 billion concerning the share’s current market price. The number of shares outstanding of the WG share has been reported to be at 684.94 million, and the free float has been said to be at 658.28 million.

The beta of the WG share was reported to be at 1.28, which shows that the company’s share price movement is highly volatile in its trend, as compared to the benchmark market index’s movement.

Outlook

The company declared that there is a positive impact of the adoption of IFRS 16 on adjusted Earnings before interest, tax and Depreciation & Amortization for the entire financial year which is expected to be $143 million which is a reduction of $27 million from its previous estimate value.

Sanne Group Plc

Sanne Group Plc (LON: SNN) is the provider of reporting, administration and fiduciary services to financial institutions, top alternative asset managers and family offices & corporates. The company has more than 1,750 clients managing well over £250 billion of assets under administration for 7,800 funds and structures. The company has more than 1,600 employees and 20 global financial centres throughout the Americas, EMEA and Asia-Pacific.

News Updates

On 2nd December 2019, the company announced that 146.5 million shares comprised its total issued share capital of £0.01 each as on 29th November 2019. This figure includes 0.099 million ordinary shares which were held in Treasury.

On 29th October 2019, the company announced that applications were already made to the Financial Conduct Authority and the London Stock Exchange for 0.6 million shares to be added in premium listing section of the authorised List for trade on the Main Market consequent to the company’s acquisition of FLSV Fund Administration Services LLC.

Financial Highlights

On 10th September 2019, the company announced its half-yearly financial report for the period ended 30th June 2019 through a press release. The company reported that the dividend per share increased by 2.17% to 4.7p in H1 FY2019 as compared to 4.6p in H1 FY2018.

The company’s underlying operating profit increased by 3.7% to £20.8 million in the first half of FY2019 as compared to £20.0 million in the first half of the FY2018. The company’s underlying Profit before tax decreased by 1.3% to £19.2 million in the first half of FY2019 as compared to £19.4 million in the first half of the FY2018 whereas statutory Profit before tax decreased by 50.3% to £5.4 million in the first half of FY2019 as compared to £10.9 million in the first half of the FY2018.

The underlying Diluted earnings per share decreased by 7.1% to 10.4p in the first half of FY2019 as compared to 11.2p in the first half of the FY2018 whereas the statutory diluted earnings per share decreased by 60.2% to 2.4p in the first half of FY2019 as compared to 5.9p in the first half of the FY2018.

The underlying operating profit margin reported to 26.4% in the first half of FY2019 as compared to 30.3% in the first half of the FY2018.

(Sources: LSE)

Share Price Performance

On 13th December 2019, at 10:58 AM GMT, while writing, SNN share price was reported to be trading at GBX 724.00 per share on the LSE, an increase of 4.62 per cent or GBX 32.0 per share, as compared to the previous day’s closing price, which was reported to be at GBX 692.0 per share.

On 26th July 2019, the shares of SNN were GBX 762.0, which was highest ever and reached to GBX 446.50 on 23rd January 2019 which was lowest ever in the last 52 weeks range. Today’s share price was down by 4.9 per cent from 52-week highest price whereas the same share price was up by 62.2 per cent from the 52-week lowest price.

The company’s market capitalisation was reportedly valued to be at GBP 1.01 billion concerning the share’s current market price. The stock outstanding of the SNN share has been reported to be at 146.53 million, and the free float has been said to be at 141.64 million.

The beta of the SNN share was reported to be at 0.50, which shows that the company’s share price movement is less volatile in its trend, as compared to the benchmark market index’s movement.

Outlook

As per the company information, the company is continuously outperforming on its core Alternatives businesses which gives the confidence to Board on the expected increase in revenue in this full year. The company further announced that they have Immediate priorities focusing on issues which impact group margin as well as increase the returns from the Corporate and Private Client business.