Hi Peter,
WOR has indeed been on a very frustrating journey, and yesterday’s sell off felt extreme considering the companies significant restructuring activity. The increased magnitude of the costs saw Worley take the impact below the line, having previously been intending to take such costs above the line – The headline (statutory) profit looked weak versus expectations, but the core operating performance was actually broadly in line — the miss was likely driven by one-off or accounting adjustments rather than underlying trading weakness.
Moving forward Worley’s strong balance sheet (leverage of 1.5x vs. <2.0x target) provides capacity to pursue strategic investments, and the $500mn share buyback program which is around 65% complete. We see excellent value in WOR which is trading at a significant discount to the market and its peers. Looking into FY27/8 EBITDA growth in the 15-20% region is likely making the stock very attractive for today:
- We intend to hold the position and will look for a time to bring it back to target weight.
