Wood Group shares in the UK fall 30% after a negative cash flow forecast

John Wood Group shares fell 30% in the early trading of Friday, after the British engineering company announced that its free cash flow will be negative instead of positive this year as it had been previously anticipated.

Wood's free cash flow may be as low as $200 million. This is a significant change from its previous projection of a "significant" cash flow for this year.

The company expects that proceeds from certain disposals will support its balance sheet, maintain debt and return to positive cash flow in the next year.

After an independent review launched in November last year, the FTSE 250 company said that it would "significantly" strengthen its financial culture and control system.

In a trading update, the company said that it did not expect the findings to have a significant impact on the Group’s cash position and its future ability to generate money.

The stock had dropped 29.4% at 0856 GMT. (Reporting by Radhika Anilkumar in Bengaluru; Editing by Savio D'Souza)

(source: Reuters)