Orders and working capital up at Weir

Despite this, “cash from operations” – including both continuing and discontinued activity – declined by a quarter, to £221m. Operating cash flow fared worse, down by nearly a third to £160m, due to a surge in working capital. The chief causes of this were the £64m build up in inventory and a £118m increase in trade and other receivables, versus decreases of £7m and £58m in 2016. Impressively, Weir still managed to decrease its working capital as a percentage of sales, and boost the inventory turnover ratio from 2.2 to 2.7.

A tighter cash position helps to explain why net debt and shareholder distributions were both flat, although the latter is also partly due to investors’ greater preference for cash rather than scrip dividends in 2017. Analysts expect little change in the dividend this year, but anticipate adjusted pre-tax profit of £337m and EPS of 121p in 2018, compared with last year’s estimates of £250m and 88p.