1st May 2014 07:36
LONDON (Alliance News) - The Weir Group PLC said Thursday that has retained its guidance for the full-year as trading since the beginning of 2014 has been in line with management expectations, although expects full-year results to be hit by currency headwinds.
In an interim management statement for the period January 4 to April 30, 2014, the company said it expects good constant currency revenue and profit growth with margins broadly in line with 2013 levels. However, reported results will be impacted by adverse foreign currency movements, said Weir.
The engineering firm said that it expects the currency headwinds to be greater in the first-half, resulting in full-year reported revenue and profit being weighted more towards the second-half.
Weir said that its performance in the first quarter was buoyed by higher underlying activity levels as it entered 2014, particularly in its Oil & Gas and Power & Industrial divisions. First quarter input was 7% higher than the previous year, it said, 1% up on the fourth quarter of 2013. Original equipment orders were down 2% and aftermarket orders were up 13% against the prior year period.
Operating margins were broadly in line the previous comparative period, said the company.
On a divisional basis, in Minerals, order input for the 13 weeks was down 7% against the prior year comparator which contained a number of material brownfield orders. Original equipment input was down 27% on the previous year, which the firm said reflects ongoing weakness in mining end market conditions and the absence of any large orders in the first quarter.
Oil & Gas order input came in ahead of expectations, up 33% on the year before, said Weir. Original equipment and aftermarket orders were up 33% on the first quarter of 2013 - the low point of the upstream cycle. On a sequential basis, input was 9% higher than the fourth quarter of 2013, said the firm.
In the Power & Industrial business, order input for the 13 weeks was up 5% on the previous year. Original equipment input was up 19% and was offset by a 9% decline in aftermarket orders.
The Weir Group said that its full-year divisional revenue and operating margin expectations remain unchanged.
In April, the firm said it was considering its options after making a takeover approach for Finish firm Metso Oyj. The company rejected Weir's approach, saying it wouldn't be in the best interests of its shareholders.
Weir cited the approach a merger proposal, buts its shareholders would hold the vast majority of the combination under its initial proposal. After becoming public knowledge April 1, Weir detailed the deal on April 16, saying it had proposed an all-share deal under which Metso shareholders would receive 0.8400 Weir shares per Metso share held, resulting in Metso shareholders owning approximately 37% of the combined company.
Shares in The Weir Group were trading marginally higher shortly after the open, up 0.15% at 2,694.05 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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