Shares in Wood Group PLC are set to be suspended as the company does not expect to be able to publish its 2024 results by the end of April.
Following a turbulent year, Wood, in November, commissioned an independent review into the business by Deloitte.
The Aberdeen-based engineering giant announced this morning that it had received a draft of that review.
The company confirmed there had been "significant" internal change after "material weaknesses and failures in the group's financial culture", including "inappropriate management pressure", were identified.
In an update issued to shareholders this morning, Wood cautioned that, due to the timing of the review and "extensive work needed to conclude the audit", it is now expected that the company will not publish its FY24 accounts by April 30 2025.
The update adds: "In that case, the company's shares would be suspended from trading from that time as work progresses towards completion of its FY24 accounts."
The review notes necessary remedial steps such as expected prior year adjustments to the income statement and balance sheet. Also identified in the review were:
- "Issues with the application of relevant accounting standards, such as holding specific amounts on the projects centre balance sheet that should have been written off."
- "Gaps and deficiencies within the application of controls which relate to the monitoring and reporting of project positions within the projects business unit."
The company update states: "As a result of the review, Wood has identified material weaknesses and failures in the group's financial culture within the projects business unit and engagement between group finance and projects.
"This included inappropriate management pressure and override to maintain previously reported positions, including through unsupported dispensations, and over-optimism and/or lack of evidence in respect of accounting judgements.
"The cultural failings appear to have led to instances of information being inappropriately withheld from, and unreliable information being provided to, Wood's auditors.
"There has been significant change within Wood and steps taken during and since the period covered by the review, including changes in key roles in finance and external expert assistance in the application of accounting standards.
"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.
"We will provide a further update on the impacts of the Review, and actions being taken, as appropriate."
Wood remains in talks with Dar Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara") in relation to a possible takeover.
Last week, an extension to the deadline for a deal to be struck was agreed, giving the parties until 5pm on April 17 to reach a decision.
Wood shares fell sharply, around 25%, when markets opened this morning.
FTSE 100
The UK's flagship share index, the FTSE 100, was down 91 points at 8,581 shortly after opening this morning.
Brent crude oil futures were down 0.16%, trading at $72.71 a barrel.
