It wasn’t Valentine’s Day for shareholders in John Wooden Group (LSE:WG.), the FTSE firm that describes itself as “a global leader in consulting and engineering across energy and materials”.

On 14 February, its shares closed 55.6% decrease, at 29p, after the corporate launched a buying and selling replace.

It caps a depressing interval for buyers. On 5 August 2024, the inventory fell 35% after a takeover for the corporate fell by way of.

Three months later, on 7 November 2024, the shares fell 60% after the agency mentioned it had skilled a “mixed quarter” and introduced an unbiased evaluate. The administrators appointed Deloitte to “focus on reported positions on contracts in Projects, accounting, governance and controls, including whether any prior year restatement may be required.”

After which there was Friday’s information. Harking back to a Valentine’s Day bloodbath, buyers seem to have fallen out of affection with the corporate.

The upshot of all that is that the John Wooden Group’s share price has fallen 85% in simply over six months. Previous to being deserted, the agreed price for the takeover was 220p a share.

Absolutely issues can’t get any worse?

Not all dangerous information

However regardless of this doom and gloom, I feel the announcement included some positives.

When the corporate’s accounts are finalised, the administrators predict 2024 adjusted EBITDA (earnings earlier than curiosity, tax, depreciation and amortisation) of $450m-$460m, which is precisely what the analysts have been forecasting previous to the press release being issued.

If realised, earnings per share might be 6.7 cents (5.3p at present change charges). This suggests an astonishingly low price-to-earnings ratio of 5.5.

And the group expects its income to develop by 10%, in 2025. Once more, that is consistent with the forecasts of the analysts.

Encouragingly, as of 31 December 2024, the corporate’s order ebook was $6.2bn. That is an $800m (14.8%) enchancment on the place three months earlier. Regardless of its woes, the corporate seems to be good at what it does.

Can the data be trusted?

Nonetheless, regardless of these glimmers of hope, I received’t be investing within the firm.

My principal concern is that the buying and selling replace was offered in draft format and “subject to the conclusion of the independent review”. In different phrases, the figures won’t be dependable.

And till these doubts are eliminated, I think buyers will stay jittery.

In some respects, it doesn’t actually matter whether or not the corporate’s historic outcomes need to be restated. It’s the longer term that’s vital. Nonetheless, having confidence in a administration group is, in my view, important on the subject of investing. In any case, if I purchase a specific inventory I’m entrusting my cash to its administrators.

Because of its troubles, the corporate’s now anticipating a destructive free money outflow of $150m-$200m in 2025. That is regardless of its expectation of being worthwhile. Nonetheless, the prices of the unbiased evaluate and legacy claims liabilities will have an effect on its money this 12 months.

For these causes, I’m going to keep away from taking a place in John Wooden Group. Though the corporate’s administrators are assured that the continued evaluate is not going to have a major impression on its money place — or its potential to generate money sooner or later — it has recognized materials weaknesses and failures.

This inventory’s not for me.