AN engineering group with operations in Elland has forecast another big rise in annual profits.
Glasgow-based Weir said its involvement in fast-growing markets such as mining, power generation and industrial systems has boosted its order book at a time when its other core sector supporting oil and gas production faced challenging conditions.
The group’s half-year results showed a 27% rise in profits to £226m. It is now forecasting £440m to £460m for the full year against just under £400m in 2011.
Weir, which employs 14,000 staff and works for customers such as BP, BAE Systems and the Ministry of Defence, burst into the FTSE 100 Index in September, 2010, after a strong run for its shares.
The group, which hopes to double 2009 profits by 2014, said revenues and profits from its minerals division were ahead of expectations this year.
It reported a good “pipeline” of new project opportunities, adding that economic uncertainty and lower commodity prices have not impacted previously approved projects or production levels.
Earlier this year, Weir Valves & Controls UK Ltd, which employs about 200 people at its Huddersfield Road manufacturing plant in Elland, announced deals worth £25m to provide a range of specialist valves to two leading power companies in South Korea.
Weir said operating profits in the minerals division rose 20% to £120m during the half-year..
While the figure in oil and gas was 46% higher at £123m, orders were down 7% to £373m after the American pressure pumping market was affected by an industry switch towards liquids-rich shale formations.
Activity in the aftermarket was also impacted by overstocking.
Analysts said the latest figures were in line with expectations, but shares fell 4% today after a surge in previous sessions.
Scott Cagehin, an analyst at Numis Securities, said: “We continue to view Weir as a high quality business with leading market positions, excellent margins and strong cash generation.”
Weir’s shares closed down 49p or 3% at 1655p.
