Weir Group (WEIR) is moving its portfolio towards aftermarket products in upstream mining, oil and gas, and announced the disposal of its downstream pumps and valves business Flow Control for £275m in February 2019. More than 80 per cent of the engineering group’s revenues now comes from upstream mining, oil and gas markets, according to chief executive Jon Stanton. ESCO, its upstream mining toolmaker, has delivered annualised cost synergies of $15m since being acquired in July, “well on our way to our target of $30m”, Mr Stanton adds.
The group’s minerals division reached a landmark in 2018, with a 14 per cent rise in orders, and aftermarket orders exceeding the £1bn mark for the first time. Oil and gas experienced a 17 per cent growth in orders driven by a strong first half, before capacity constraints in the Permian basin in North America, the premature exhaustion of customer budgets and extended seasonal breaks hit second-half performance. Mr Stanton envisages “up to 50 or 60 per cent more capacity” being added across pipelines in the basin as we enter the second half, thus alleviating these capacity concerns.
Broker UBS is forecasting respective full-year 2019 operating profits and EPS of £384m and 99.6p, against prior year figures of £334m and 89.8p.
| WEIR GROUP (WEIR) | ||||
| ORD PRICE: | 1,646p | MARKET VALUE: | £ 4.27bn | |
| TOUCH: | 1,643-1,647p | 12-MONTH HIGH: | 2,333p | LOW: 1,223p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 222 | |
| NET ASSET VALUE: | 826p* | NET DEBT: | 52% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 2.44 | 149 | 34.0 | 44.0 |
| 2015 | 1.88 | -174 | -73.1 | 44.0 |
| 2016 | 1.84 | 42.8 | 20.1 | 44.0 |
| 2017** | 1.99 | 198.6 | 72.7 | 44.0 |
| 2018 | 2.45 | 86.1 | 7.4 | 46.2 |
| % change | +23 | -57 | -90 | +5 |
| Ex-div: | 25 Apr | |||
| Payment: | 06 Jun | |||
| *Includes intangible assets of £2.2bn or 835p a share. **Restated for IFRS 15 accounting standards | ||||
