Advances in Social Sciences Research Journal – Vol.5, No.4 Publication Date: Apr. 25, 2018 DoI:10.14738/assrj.54.3047. Suleiman, M. B., Opio, S. A., Ariko, J., & Ssali, E. (2018). A Financial Analysis of John Wood Group Plc. Advances in Social Sciences Research Journal, 5(4) 102-123. Copyright © Society for Science and Education, United Kingdom 102 A Financial Analysis of John Wood Group Plc M. B. Suleiman Federal Polytechnic, Mubi Nigeria S. A. Opio Office of the Auditor General of Uganda, Kampala J. Ariko Office of the Auditor General of Uganda, Kampala E. Ssali Office of the Auditor General of Uganda, Kampala ABSTRACT This report focuses on the financial analysis of John Wood Group Plc. It was aimed at analysing the company’s risk profile with regards to business risk, systematic risk, financial risk, and trend and comparative analysis. Furthermore, it also aimed at evaluating four approaches to company valuation, and the past and possible future agency problems in the company. The report used the company’s annual accounts from 2010 to 2013 and for comparative purpose, two peers were considered. It was observed from the analysis that the business risk and systematic risks were high while the financial risk was low. On the company valuations, the Dividend Valuation Model (DVM) was selected among other models because the DVM computed value of the company was closest to the market value. More so, it was also observed based on the analysis that agency problems existed in the past and could possibly occur in the future. The report recommended that the company’s business risk could be minimised by maintaining high operating leverage during boom and low operating leverage during recession. In doing this, it suggested the need for trade-off between financial leverage and operating leverage. Furthermore, the reported recommended various measures the company could mitigate and avert possible occurrence of agency problem. INTRODUCTION This report focused on John Wood Group Plc, an international energy service company with operations in more than 50 countries. The Group has three businesses– Wood Group Engineering, Wood Group PSN and Wood Group GTS – providing a range of engineering, production support, maintenance management and industrial gas turbine overhaul and repair services to the oil & gas, and power generation industries worldwide (Wood Group’s Annual Report and Accounts 2013). Amec Foster Wheeler Plc and WS Atkins Plc were considered as peers to Wood Group Plc (ft.com 2015). The report analysed the risk profile of Wood Group in comparison to its peers. It also considered the various approaches for company valuation, and then selected the model that gave the value closer to the market value. Furthermore, the report critically analysed the past and future agency problems in Wood Group and finally concluded. RISK PROFILE ANALYSIS This section covered risk profile analysis of Wood Group (WG) using accounting and market- based risk measures (Appendix i). It covered analysis of business risk, systematic risk, financial risk, and a trend and comparative analysis of key ratios.