Scottish engineering firm Weir Group enjoyed a 22% increase in profits in a “transformational” 2018.
Glasgow-headquartered Weir − which makes pumps, wellheads and valves and has bases in Dyce and Portlethen − bought US mining tools firm Esco Corporation for £900 million in July last year.
Weir said it “moved quickly to realise the initial benefits of the integration”.
Meanwhile, Weir’s oil and gas division “took full advantage of strong demand” in the first half of the year, contributing to a 17% increase in full year orders and a strong margin performance.
Group pre-tax profits totalled £310m in 2018, up from £255m a year earlier, while revenues jumped 23% to £2.45 billion.
Earlier this week, Weir announced the sale of its flow control division to private-equity investment firm First Reserve for £275m.
Weir chief executive Jon Stanton said: “The last year has been transformational for the group.
“With Esco, we completed our largest ever acquisition while also agreeing the sale of the flow control division.
“The result is a more focused and higher-quality global business that is simpler and stronger with more than 80% of the group’s revenues from attractive upstream mining and oil and gas markets.”
“Looking to the full year, we currently expect our mining and infrastructure markets to continue to benefit from positive industry fundamentals with oil and gas activity to improve modestly from current levels.
“Overall, assuming market and macro-economic conditions remain supportive, we anticipate the group will deliver another year of good constant currency revenue and profit growth, supported by strong execution of our We are Weir strategy.”
Alistair Douglas, investment manager at Brewin Dolphin Scotland, said: “Weir Group’s shares have had a strong start to the year and this looks like a positive set of results from the business – revenues rose nearly a quarter and operating profit is up 13% on a like-for-like basis.
“The integration of ESCO appears to be going well, and the recent sale of its flow control division will help Weir to reduce the debt taken on to complete this deal.
“Importantly, it backs up the group’s transformation plans of making the business simpler and more focused.
“Weir should also benefit over the coming years from the investments it has made in technology, which will drive further efficiencies and organic growth.”
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