Weir profit £348m as revenue tops £2.4bn

Shares of Glasgow-based global engineering and mining giant Weir Group rose about 7% on Wednesday after it reported that 2022 revenue rose 28% to £2.472 billion and adjusted profit before tax soared 40% to £348 million.

The FTSE 100 firm said orders rose 14% to £2.644 billion as it declared a full-year dividend of 32.8p, up 38%.

Weir shares are now up about 33% for the past year, trading around £20.25 to give the firm a stock market value of about £5.3 billion.

Weir Group has roughly 11,000 staff in over 60 countries.

In its outlook, Weir said: “We begin 2023 with a record order book and positive conditions in mining markets, where high levels of activity, coupled with miners’ focus on sustainable operations, are driving demand for our AM spares and brownfield OE solutions.

“In 2023, we therefore expect to deliver growth in constant currency revenue, profit and operating margin.

“We are on track to deliver our target of 17% operating margin in 2023, supported by operational efficiencies and early benefits from Performance Excellence, and expect free operating cash conversion of between 80% and 90%.

“Further out, the long-term fundamentals for mining and our business are highly attractive, underpinned by decarbonisation, GDP growth and the transition to sustainable mining.

“We have a clear strategy to grow ahead of our markets, with specific growth initiatives underpinning our ambition to deliver through-cycle mid-to-high single digit percentage revenue growth.

“Beyond 2023, Performance Excellence will support margin expansion above 17% and we expect free operating cash conversion to increase to between 90% and 100%.”

Weir Group CEO Jon Stanton said: “The value creation opportunity for Weir is compelling. The mining industry is playing a crucial role in meeting the twin demands for decarbonisation and economic growth, resulting in multi-decade demand growth for critical metals.

“Weir is the focused mining technology leader that is well placed to capitalise. Deeply embedded in our customer operations and offering unique engineering expertise and innovation, our solutions are delivering excellent outcomes for all stakeholders.

“This is reflected in the proven performance of our mining businesses through the cycle, and was further evidenced in 2022.

“We are making mining smarter, more efficient and sustainable. We are growing faster than our markets, strengthening margins and cash and reducing our CO2 footprint.

“We are underpinning our continued progress through our commitment to our future technology roadmap with increased investment in R&D, and a sharper focus on execution through Performance Excellence.

“So our future is exciting. Reflecting high levels of confidence in this strategy to deliver long-term sustainable profitable growth, the board has approved a final dividend of 19.3p, an increase of 57% on 2021.”