Weir emerges chastened but in good trim

But there is no disguising the fact that 2016 was another tough year for the company. Orders were down 8 per cent at constant currencies, while operating profits pulled back 26 per cent on that basis on a 2.4 percentage point reduction in underlying margins.

Vast amounts of capital expenditure have been withdrawn or deferred in its principal markets, so the Glasgow-based group has responded to this challenge through its 'We are Weir' revised corporate strategy. Without wishing to sound overly cynical, many eye-catching strategic initiatives of this kind are designed primarily to influence market perceptions, but at least Weir's efforts delivered £110m in new product sales through the year. The company has also appointed its first ever chief technology officer, announced under separate cover.

In reality, when your potential sales pool is rapidly diminishing, the only option is to trim your cloth accordingly. All up, Weir has reduced its cost base by £170m since the fourth quarter of 2014. It also garnered £78m through disposals during the period, including Ynfiniti Engineering Services and American Hydro. It's those brass tacks adjustments that have enabled the group to maintain a healthy free cash flow of £129.7m, despite the prolonged downturn in its end markets.

At best, crude oil prices have stabilised, while prices for bulks such as iron ore and coal recovered strongly through 2017. This is reflected in segmental performance within the group; Weir’s oil & gas unit was unprofitable as operating margins turned to negative 2.2 per cent from a positive reading of 9.6 per cent a year earlier, while margins within the minerals unit improved 30 basis points year-on-year to 19.5 per cent.

Prior to these figures, JPMorgan Cazenove gave adjusted profits of £269m and EPS of 80.1p for the December 2017 year-end, rising to £322m and 100p in 2018.