John Wood Group has issued what it has described a "difficult announcement" in its latest trading update, which has seen the firm cancel employee and executive bonuses for the 2024 financial year.

In the 2024 financial year, the firm reached an adjusted EBITDA of between $450m-$460m, with an adjusted EBIT of between $205m-$215m.

However, Wood said it has to actively manage "working capital at year end" and cancel executive and employee bonuses in an attempt to "mitigate weaker-than-expected trading in Q4".

The firm’s average net debt reached $1.1bn in the year to 31 December, with net debt excluding leases reaching $690m, which is a slight decrease from $694m in 2023.

The announcement comes as Deloitte found that the firm had a number of failures, in a review that is still on going.

Chief executive officer at Wood, Ken Gilmartin, said: "This is a difficult announcement amid our transformation. While we have made progress, I am disappointed in our financial performance. Consequently, we are taking decisive actions to ensure we can meet the opportunities we have in growing markets, principally energy.

"While the likely findings from the independent review are expected to have no material impact on the group's cash position and future cash generation, it clearly gives us areas to focus on and we are initiating steps now to further improve our financial culture, governance and controls.

"We have announced further actions to address the cost base of the business to right size Wood for the future, and have laid out a very clear route to positive free cash flow in 2026.

"As we look ahead, notwithstanding the challenges today, I am confident the fundamentals of this company remain strong - we are in growing markets, with considerable in-demand engineering skills, trusted client relationships, and we're well positioned to grow the business."

In conclusion, investment director at AJ Bell, Russ Mould, stated: "Wood crashed on a smorgasbord of bad news. An independent review of the business by Deloitte is still ongoing but it has already found ‘material weaknesses and failures’.

"Fourth quarter trading was below expectations and staff aren’t getting their annual bonus. It guided for negative free cash flow in 2025 and it needs to find a solution to refinance debt that matures next year. It’s a lot of bad news to stomach, hence why investors have been quick to hit the sell button on the shares."

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