Wood Group finds 'material weakness and failures' in accounts

(Sharecast News) - Engineering and consulting business Wood Group revealed on Monday that its shares would most likely be suspended from trading on the London Stock Exchange after finding "material weakness and failures" in its books.

Wood Group said it had uncovered failings due to "inappropriate management pressure", including instances of management overriding financial reporting to maintain previously reported positions through "unsupported dispensations and over-optimism and/or lack of evidence in respect of accounting judgements".

The FTSE 100-listed group said an initial review called for "material" prior-year adjustments to both its profit and loss and balance sheets for FY22 and FY23, as well as H124.

Wood stated that adjusted underlying earnings and EBIT were likely to be restated, with the changes principally impacting historical reported performance in its projects unit. Issues were primarily related to legacy lump sum turnkey contracts and the misapplication of accounting standards.

Wood now to publish its FY24 numbers by 30 April, meaning it would miss the London Stock Exchange's four-month deadline and lead to its shares being suspended.

"We are committed to implementing a detailed remediation plan, including necessary follow-on actions from the review, to continue to strengthen the group's financial culture, governance and controls. This will include actions on culture, controls and organisational structure," said Wood.

As of 0900 BST, Wood Group shares were down 27.94% at 28.78p.