Weir soars amid record order book, £209m profit

Shares of Glasgow-based global engineering and mining giant Weir Group rose about 10% on Wednesday after it published results for the year ended December 31, 2021, showing a record order book and a statutory profit before tax that rose 18% to £209 million.

Revenue was steady at £1.934 billion and dividend payments have been resumed.

“Reflecting the high levels of confidence in our strategy and future prospects, the board has today announced a final dividend of 23.8 pence per share, which is 33% of adjusted EPS for the period, in line with our capital allocation policy of returning a third of EPS through the cycle,” said the company.

Weir said its exposure to Ukraine and Russia is small, with combined Ukraine and Russia net assets of around 2% of the group total and combined revenue and operating profit being less than 5%.

“We are actively assessing the situation closely and will update further as required,” said the firm.

Weir Group is one of Scotland’s biggest listed companies and it employs more than 11,000 people around the world.

The Glasgow firm reported a “clear path to 17% operating margins in 2023″ and said “subject to ongoing geopolitical uncertainty, strong growth in constant currency revenue and profit” are expected in 2022.

Weir CEO Jon Stanton said: “In 2021 we navigated successfully through a number of significant external challenges to deliver a strong performance for the year.

“Order momentum was strong, with a significant acceleration in Q4, and demand for recurring aftermarket consumables has now surpassed pre-Covid levels.

“As events continue to unfold in Ukraine and Russia, where our operations are relatively small, our priority is the safety of our impacted colleagues; we are doing all we can to support them and our thoughts are with them and their families.

“We start 2022 with a record order book and market conditions continue to be favourable.

“Subject to ongoing geopolitical uncertainty, and with Covid-19, inflationary and supply chain pressures likely to persist, we currently expect to deliver strong growth in constant currency revenue and profit this year and further progress towards our medium-term performance goals.

“Longer-term, our mining technology focus places Weir at the heart of a multi-decade growth opportunity in partnership with the global mining industry as it delivers the minerals essential for the clean energy transition more efficiently and sustainably.”

In its outlook, Weir said: “2022 has started well and the impact of September’s cyber incident is now behind us.

“We have a record order book and our markets are buoyant, supported by long-term structural growth drivers.

“In common with most global businesses we are managing ongoing disruption from Covid-19, as well as inflationary and logistics challenges in the supply chain, and remain vigilant of the heightened geopolitical risk.

“Specifically, the rapid escalation of events in Ukraine and Russia has created significant uncertainty about our operations and trading in those countries.

“Our overall exposure is small, with combined Ukraine and Russia net assets of around 2% of the Group total and combined revenue and operating profit being less than 5%.

“We are actively assessing the situation closely and will update further as required.

“Subject to the ongoing geopolitical uncertainty, in 2022 we expect to deliver strong growth in constant currency revenue and profit in line with our medium-term targets.

“Looking beyond the current year, medium-term growth prospects are exciting, underpinned by underlying macro trends which remain extremely favourable.

“With our strong and resilient business, we are well positioned to grow faster than our markets and deliver sustainable margin improvement in the long-term.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.