Statement re Adoption of IFRS

Wood Group (John) PLC
06 July 2005


John Wood Group PLC ('Wood Group')
Adoption of International Financial Reporting Standards ('IFRS')
(Unaudited)

Introduction

The first set of results to be prepared under IFRS will be the interim accounts
for the six months ending 30 June 2005, which will contain comparative financial
statements under IFRS for the periods ending June and December 2004. The
following note highlights the main areas of impact for Wood Group on adoption of
IFRS, the estimated impact on the 2004 reported figures and an indication of the
impact for 2005. At this stage, accounting practice is continuing to evolve and
therefore the full effect of adopting IFRS on the financial statements cannot be
determined with certainty and may be subject to change. However, there is no
impact on cash flows arising from the adoption of IFRS.

IFRS 1 'Transitional Arrangements'

IFRS 1 sets out how a company should apply IFRS at the transition date. In line
with the standard, Wood Group will use accounting policies that comply with IFRS
for the interim accounts and apply these policies to all historic periods
presented. Wood Group will use certain exemptions allowable under IFRS 1 in
preparing historic information, which are included in the descriptions outlined
below.

IFRS 2 'Share-based payments'

Wood Group will recognise a charge to the Income Statement for the fair value of
share options and other share based payments granted after 7 November but which
have not yet vested. The impact on 2004 Profit before tax was approximately $2M
and is expected to be approximately $3M in 2005 in relation to share options.
The increase in the 2005 charge is due to the full year impact of options
granted during 2004 and new options granted in 2005. The accounting treatment of
other share based payments, being the Long Term Retention Plan (LTRP) and Long
Term Incentive Scheme (LTIS), is not expected to be materially different under
IFRS.

IFRS 3 'Business Combinations'/ IAS 38 'Intangible Assets'

Wood Group will apply IFRS 3 to all acquisitions made on or after 1 January
2004. Goodwill amortisation of approximately $17M booked in 2004 will be
reversed and acquisition goodwill will be carried at 1 January 2004 levels plus
the goodwill on acquisitions made since that date; goodwill will be subject to
an annual impairment test.

Other intangible assets will continue to be amortised over their useful economic
lives in a similar way to UK GAAP. This is expected to result in an amortisation
charge of $1-2M in 2005 (2004:$1M).

Wood Group will also be required to recognise other intangible assets that may
exist on acquisition separately from goodwill, and amortise these over their
useful economic life. An amount of $3M will be recognised on the acquisitions
made during 2004 relating to the value of customer contracts, which will be
fully amortised in 2004. This amount had been accounted for as goodwill under UK
GAAP.


IAS 10 (Revised) 'Events after the Balance Sheet Date'

IAS 10 requires that dividends should not be recognised as a liability or
charged to the income statement until they have been declared. As a result, the
interim accounts will not take into account the interim dividend, which will not
have been declared at 30 June 2005.

IAS 12 'Income Taxes'

As a result of the reversal of the goodwill amortisation charge for 2004 the
book value of goodwill has increased by a net amount of $14M. There has been no
change in the underlying tax basis of the goodwill in those countries where
goodwill is deductible and therefore a further deferred tax liability arises on
the increase in the temporary difference. The impact on the tax charge for 2004
is $2M and is expected to be the same in 2005.

IAS 14 'Segmental Reporting'

Wood Group has determined that its primary segmental reporting format is by
business and that the segments will continue to be Engineering & Production
Facilities, Well Support and Gas Turbine Services. Additional segmental
information under IFRS will include inter-segment revenues, gross assets and
liabilities, capital expenditure, depreciation and amortisation by business
segment.

IAS 19 'Employee Benefits'

Wood Group adopted FRS 17 in 2001 and recognised the full net liability on the
defined benefit pension scheme at that time. The treatment under IFRS will be
largely the same and therefore there will be no material impact on either 2004
or 2005 as a result of the transition to IFRS.

IAS 31 'Interests in Joint Ventures'

Wood Group has opted to consolidate proportionally its joint ventures under IAS
31. As a result, it will consolidate its share of joint venture net debt, which,
as previously disclosed, was $39.5M and $45.5M at 30 June 2004 and 31 December
2004 respectively. There is no impact on either net assets or earnings.

IAS 32 and 39 (Revised) 'Financial Instruments'

Wood Group has elected, under IFRS1, to adopt IAS 32 and 39 as if arising from a
change in accounting policy as at 1 January 2005. It has assessed its foreign
exchange and interest rate exposures and documented the hedges taken out against
these exposures. Any elements of the hedges determined to be ineffective will be
taken through the income statement. These amounts are not expected to be
material.

There will be an impact on the Wood Group's net assets of recognising certain
financial assets and liabilities at their fair value at 1 January 2005. These
amounts are not expected to be material.

Appendix 1 - Restatement of UK GAAP Reported Figures

EBITA

                                                  30 June 2004      31 Dec 2004
                                                            $M               $M
EBITA as reported under UK GAAP (1)                         54              117
Share-based payments (IFRS 2)                               (1)              (2)
Adjusted EBITA as adjusted for IFRS                         53              115

PBT

                                                   30 June 2004     31 Dec 2004
                                                             $M              $M
PBT as reported under UK GAAP (2)                            12              54
Share-based payments (IFRS 2)                                (1)             (2)
Reverse acquisition goodwill amortisation (IFRS 3)            8              17
Other intangibles amortisation (IFRS 3)                      (1)             (3)
PBT as adjusted for IFRS                                     18              66

Adjusted Earnings per share (EPS)

                                                   30 June 2004     31 Dec 2004
                                                         (cents)         (cents)
Adjusted EPS as reported under UK GAAP (3)                  6.0            13.1
Share-based payments (IFRS 2)                              (0.2)           (0.3)
Tax adjustment (IAS 12)                                    (0.2)           (0.4)
Adjusted EPS as adjusted for IFRS                           5.6            12.4

Balance Sheet

                                           1 Jan 2004  30 June 2004  31 Dec 2004
                                                   $M            $M           $M
                                         (Restated)(4)   
Net Assets as reported under UK GAAP              540           514         519
Acquisition goodwill adjustment (IFRS 3)            -             8          17
Other intangibles amortisation (IFRS 3)             -            (1)         (3)
Dividend adjustment (IAS 10)                       10             6          11
Tax adjustment (IAS 12)                             -            (1)         (2)
Net Assets as adjusted for IFRS                   550           526         542

Notes

(1) 'EBITA' is earnings before interest, tax and amortisation and represents
operating profit before deduction of amortisation and impairment and
restructuring charges.

(2) 'PBT' is Profit on ordinary activities before taxation.

(3) Adjusted EPS represents the fully diluted EPS excluding the impact of
amortisation and exceptional items, net of tax.

(4) Restated under UK GAAP for the adoption of UITF 38 'Accounting for ESOP
Trusts'.


For enquiries please contact

Wood Group                                 [phone]
Alan Semple     Finance Director
Nick Gilman     Investor Relations
Carolyn Smith   Corporate Communications

Brunswick
Patrick Handley/ Nina Coad                 + 44 (0) 20 7404 5959


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