What happened to the Worleyparsons’ Share Price??
Shares of Worleyparsons Limited [ASX:WOR] gained a whopping 29% today.
Why did WOR shares fire upwards?
Worleyparsons’ shares are soaring today after Dar Group, a Dubai-based consulting group, became a substantial shareholder in the company. The group announced it had acquired a 13.35% holding. In their press release, Dar Group confirmed they had submitted a proposal to Worleyparsons to acquire 100% of WOR’s shares last November, yet WOR declined the offer.
Share values for Worleyparsons have been slipping in the last few days since WOR presented a disappointing half-year report. They announced a statutory net loss after tax of $2.4 million for the six months to 31 December 2016. Underlying net profit after tax (NPAT) was $57.1 million, a decrease of 22.7% from the last period. Operational cash flow declined $85 million as the company struggled to collect payments from different clients. The company decided to forgo dividends.
Its shares went to a low $7.94 on 24 February, only to rebound today to $10.44 after Dar Group announced the share purchases.
What now for Worleyparsons Limited?
Worleyparsons is a professional services company that focuses on the energy, resource and infrastructure sectors.
Even though market conditions are still challenging, WOR expects the market outlook to improve. The company’s order backlog has increased to $4.7 billion, and it has made cash collection a critical priority.
Yet the company has announced plans to cut $450 million in costs by the end of 2017, and there is $230 million in outstanding debts from major clients. Investors need to decide if the company has taken enough measures to decrease debt and increase its cash flow.
By Selva Freigedo