Glasgow's Weir Group flags strong full-year outcome

Weir Group, the Glasgow-based engineering heavyweight, is gearing up for a 'strong' full-year outcome after revenues topped £1 billion in the first half.

The company employs some 18,000 people globally. Picture: Weir Group
The company employs some 18,000 people globally. Picture: Weir Group

The firm, which recently sealed a bumper $1 billion-plus (£760 million) acquisition of US-based Esco Corporation, has seen its core markets continue to recover.

Results for the six months to the end of June show that revenues from continuing operations leapt 23 per cent to just over £1.06bn, while total group operating profit jumped 62 per cent to £169m, measured on a constant currency basis.

The board has approved a 5 per cent hike in the interim dividend to 15.75p per share.

Chief executive Jon Stanton described the numbers as “really good” while highlighting top-line growth across all three of the group’s core divisions.

He said: “Our main markets – mining and oil and gas – and particularly our two key exposures, copper and North Amercian shale oil and gas, are very well placed to see some excellent growth over the next few years.”

He added that the company, which employs some 18,000 people globally, was seeing a “modest impact” from trade tariffs, chiefly at US businesses that have to import raw materials from China and Canada.

“It is one of those things that you have to deal with as a global business,” noted Stanton. “It means that we have to either pass price increases on to our customers or lobby quite hard to see if we can get exemptions for some of the tariffs that we are facing.”

The Weir Group boss said that the potential fall-out from Brexit was “less of a concern” for the business but added that management was “doing some contingency planning around that”.

The group recently completed its acquisition of Esco Corporation, marking its biggest ever deal.

The move followed the news in April that the Scots firm was buying the equipment parts maker, as it looks to bolster its mining arm.

Esco, based in Portland, Oregon and employing about 3,000, makes parts for surface mining and the construction industry, including ground-moving equipment. Weir said the deal placed an enterprise value of about $1.3bn on the business.

Stanton described the deal as a “real transformational moment” for Weir, which can trace its roots back to Victorian times.

“We are very excited about what it does for Weir Group,” he said. “It creates a platform for us to build on. We will be busy for the next few months then as we get beyond that we will be looking at what is the next thing.”

Weir also announced in April that it was offloading its flow-control division, which designs process pumps and valves for the power, oil and gas industries. That sale process is planned to commence late in the third quarter.

The disposal will have some impact on Weir’s current Scottish headcount of about 400.