Weir Group sells renewables operations in £36.7m deal

Glasgow-based engineering group Weir is selling two renewables-focused businesses in a deal worth up to £36.7 million.

Weir Group is selling renewables-focused operations in the US and Spain. Picture: John Devlin

The firm said it was offloading Pennsylvania-based American Hydro Corporation and Spain’s Ynfiniti Engineering Services as part of its ongoing £100m asset disposal programme, and the sales are expected to complete by the end of this month.

American Hydro and Ynfiniti, which were acquired in 2010, formed part of Weir’s flow control division and generated a combined operating profit of £1.4m last year, on revenues of £38m.

Although Weir said it would book a loss of about £5m on the disposal, it told investors that its net debt at the end of June will be lower than previous guidance.

The group also said that first-half profits, due to be announced on 28 July, will come in ahead of the £74m currently forecast by City analysts.

Orders for the five months to the end of May were running 15 per cent behind the same period last year, although this marked an improvement on the 21 per cent decline seen in the first three months of the year.

In February, Weir said it planned to cut a further £40m of costs this year after seeing its annual profits almost halve.

The firm, which said it was facing “unprecedented” market challenges, delivered annualised savings of £110m during the year to 1 January as orders fell across the oil and gas and minerals sectors.

Overall revenues dropped 21 per cent to £1.9 billion, with pre-tax profits tumbling by 46 per cent to £220m as a result.