Weir H1 profit up 26% to £126m; revenue tops £1bn

Shares of Glasgow-based global engineering and mining giant Weir Group rose as much as 6% on Thursday after it published results for the six months ended June 30, 2022, showing revenue rose 22% to £1.096 billion and profit before tax jumped 26% to £126 million.

Weir announced an interim dividend of 13.5p per share, up 17%.

In its outlook, Weir said: “We enter the second half of the year with a strong order book and operating momentum, and we continue to expect to deliver strong constant currency revenue and profit growth, with operating profit towards the upper end of the range of current analysts’ expectations.”

The consensus forecast range on operating profit provided by the company is for £320 million to £386 million.

Weir’s outlook added: “As previously outlined, we expect second half operating margins to sequentially improve, reflecting higher volumes and our continued focus on operational efficiencies, and full year margins to show good progress towards our FY23 target.

“We expect working capital levels will decrease in the second half, and our full year cash conversion targets are unchanged.

“Looking beyond the current year, notwithstanding some recent softening, commodity prices are well above incentive levels, and providing this continues, we expect mining production activity to be stable at high levels.

“We expect our highly resilient aftermarket focused business to continue to grow through the cycle, benefiting from production trends, ore grade declines and aftermarket demand from a growing installed base.

“We are confident in delivering against our medium term targets, and we expect the transformation programme we have announced today will deliver further margin expansion beyond 2023.”

Weir also announced that Ricardo Garib will retire as president of Weir Minerals with effect from December 31, 2022, after 43 years of service. He will be succeeded by Andrew Neilson, who is currently president of Weir ESCO.

Weir is one of Scotland’s biggest listed companies and it employs more than 11,000 people in 60 countries around the world.

Weir CEO Jon Stanton said: “Momentum continued to build through the first half as we won record orders, executed strongly and made meaningful progress in delivering our technology and sustainability roadmaps which underpin our growth and long term strategy.

“Ore production activities, the driver of our highly resilient aftermarket-focused business, were extremely favourable as commodity prices were well above incentive levels and customers ordered Weir solutions to unlock higher production and productivity.

“We enter the second half of the year with a strong order book and are managing through a complex operating environment successfully.

“As a result, we continue to expect to deliver strong growth in constant currency revenue and profit this year.

“Today we are excited to be announcing a programme to transform our business processes capitalising on our now mining focused platform.

“We expect to realise £30m annualised run-rate savings by 2025, which will expand operating margins beyond 17% and maximise value for all stakeholders as we execute on the multi decade growth opportunity which lies ahead.”