Engineer Weir Group improves outlook as miners invest in sustainable technology
- Weir Group reported revenue from continuing operations grew 16%
- Trade benefited from “strong demand” for the company’s mining equipment
- Statutory profits for the Glasgow-based company rose 37% to £126 million
Weir Group has raised its annual guidance as the engineering giant’s sales are boosted by mining customers investing in sustainable technology.
The Glasgow-based manufacturer posted a record order book and revenue from continued business growth of 16 percent at constant exchange rates to £1.3 billion for the six months ended June.
Weir told investors it had benefited from “strong demand” for its mining equipment for use in brownfield expansion and sustainability projects.
Upbeat performance: Weir Group trading benefited from ‘strong demand’ for the company’s mining equipment for use in brownfield expansion and sustainability projects
Sales in the group’s minerals segment were further supported by last year’s price increases, “particularly high” growth in North America and delivery of the record opening order book, it added.
But Weir’s ESCO division, which it bought five years ago, saw strong activity in the mining sector offset by lower orders from infrastructure customers, partly due to strong comparative performance last year.
Statutory profit was still up 37 per cent to £126m, and the company has increased dividends by almost a third to 17.8p per share.
As a result, it now expects full-year operating profits to come in at the high end of analyst forecasts of £428m to £464m.
Revenues will also be at the high end of forecasts, while operating margins are on track to meet the company’s 17 percent target.
Weir Group Shares topped the blue-chip index on Tuesday morning, rising 4.8 per cent or 88 pence to £19.23. Their value has increased by about 15 percent in the past year.
Looking ahead, the company said it was poised to capitalize on the long-term need to go low carbon, which is expected to boost demand for certain metals mined by its customers.
Copper is one of those critical elements, given its use in green technologies, such as solar panels, wind turbines and rechargeable batteries.
Jon Stanton, chief executive of Weir, said: ‘Our customers’ focus on more sustainable extraction and processing techniques requires the adoption of new technologies.
“Weir’s engineering capabilities, leading brands and growing portfolio of sustainable solutions meet this need and strengthen our position as a provider of mission-critical solutions and services to the mining industry.”
Founded in 1871, Weir supplies equipment ranging from grinders to horizontal slurry pumps, acid valves, clay dredger heads and compaction machines.