Weir pumps up hopes after record performance

The Glasgow-headquartered firm also advised that annual results would be "somewhat ahead of our previous expectations" as it benefits from investment by major international mining companies, plus resurgent conditions in the global oil and gas industry.

The FTSE 100 company, which now sources more than 90 per cent of its revenues from beyond UK borders, has seen its shares soar by almost 70 per cent over the past 12 months as it makes progress towards a five-year ambition of doubling 2009 profits by 2014 to 374 million.

Weir has been a recent favourite among stock-pickers and analysts at Investec plan to raise their full-year profit and revenue forecasts by about 5 per cent off the bank of yesterday's "strong" half-year results.

Keith Cochrane, who took over as chief executive of Weir in November 2009, unveiled a pre-tax profit of 178 million for the 26 weeks ending 1 July, up 24 per cent on same period in 2010.

Revenue jumped by a third to 1.03 billion as orders surged to 1.23bn, 43 per cent up on the previous year.

Cochrane said: "Clearly, we are positioned in three very attractive end-markets, particularly the minerals marketplace - where we are see a lot of the capital expenditure increases that the major mining houses announced at the back end of last year and the early part of this year now starting to translate to firm orders."

Weir's upstream oil and gas business received a particular boost from growth in unconventional shale drilling in North America, he said. Over the past 12 months, the upstream oil and gas operation has seen record input of more than $1bn (615m).

Cochrane said he was confident that both of these divisions would continue to make significant progress, particularly given the company's exposure to emerging markets.

"Clearly, we've had a great run over the past 18 months and there has been real momentum across the group," he said.

Cochrane pointed out that Weir had increased its research and development spending by 45 per cent in the first half of the year as it seeks to remain ahead of the curve - the company recently launched the Weir Advanced Research Centre in Glasgow in conjunction with Strathclyde University.

The only blot in the results was a warning that conditions for the firm's power and industrials business remained "mixed", with uncertainty hanging over the timing of new power projects.

The company has also had to make a one-off charge of 2m following its decision to withdraw that particular division from Libya in February, amid expectations that some or all working capital is unlikely to be recovered from the conflict-ridden country.

The City gave a positive response to yesterday's announcement, although Charles Stanley analyst Jeremy Batstone-Carr questioned whether the stock could continue its stellar run.

He said while there is "little doubt that Weir is an extremely strong business benefiting from continuing strength in orders in those parts of the business exposed to markets with rising global demand", he warned investors have "woken up to the attraction and resilience of Weir's business model" and much of the good news is already factored into the share price.

Weir shares fell slightly yesterday, closing down 14p at 2,072p. The firm declared an interim dividend of 7.2p, up 20 per cent.