Scottish engineer Weir Group said yesterday that against the background of an uncertain economic recovery, it had once again delivered an excellent set of results with all divisions recording profits and improved margins.
Chief executive Keith Cochrane said: “Our growth plan is well on track across all our divisions and the strong increase in orders demonstrates our robust business model and ability to respond quickly to the changing economic environment.
“Strong trading reinforces our confidence for the remainder of 2010 and we continue to expect profits for the second half of 2010 to be significantly ahead of the prior year in constant-currency terms.”
Analysts have forecast pre-tax profits of £260million for the full year and Mr Cochrane said he was comfortable with that figure.
The group said it had delivered another record set of results with significant growth in shorter-cycle aftermarket revenue across its minerals and upstream oil and gas business.
It said that together with a continued focus on the cost base, this had benefited operating profits and margins for the 26 weeks to July 2.
Weir added that order input at constant currency was 24% higher at £863million for the half-year, with original equipment orders up 28% and aftermarket orders up 22% thanks to increased activity in minerals and upstream oil and gas. Aftermarket sales represented 58% of revenue and emerging-market sales were broadly in line with the prior year.
The group said operating margins had increased from 13.8% to 19.5%, reflecting the favourable impact of a higher proportion of aftermarket revenue, pricing discipline and benefits from operating efficiencies and lower raw material costs.
Glasgow-based Weir reported pre-tax profits from continuing operations before intangibles amortisation up 58% year-on-year at £144million. Revenue for the half-year was £775million, compared with £710million the year before.
Weir Oil and Gas designs and manufactures high-pressure well service pumps and related flow-control equipment focused on unconventional oil and gas markets and highly engineered centrifugal pumps for use in the refining industry. Weir Oil and Gas Services provides comprehensive engineering services focused on the upstream oil and gas sector.
The division improved revenue by 52% on a year earlier to £224million and operating profits by 140% to £60.9million. Weir said the immediate outlook for its upstream business remained positive.
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