26th Feb 2014 09:35
LONDON (Alliance News) - Engineering solutions firm Weir Group PLC Wednesday reported a fall in profit and revenue for the full year, as it was hit by challenging end-user markets, but said it expects to return to underlying growth in 2014.
The company posted pretax profit of GBP418 million for the period ended January 3, 2014, down from GBP440 million a year earlier as revenue fell 4% to GBP2.43 billion from GBP2.54 billion.
The slight decline in full-year revenue reflects a lower opening order book, but the group said it still achieved record margins as it benefited from more than GBP40 million in direct cost savings and value chain excellence initiatives.
Weir said revenue for its oil and gas arm fell 7% to GBP796 million from GBP857 million in 2012, which it attributed to continuing subdued demand for pressure pumping original equipment as well as a lower opening order book.
Weir didn't provide information regarding the level of its current order book.
Revenues for the arm also declined as strong aftermarket growth was more than offset by a substantial reduction in original equipment sales, as had been expected, as a result of fracking fleet overcapacity.
The power and industrial divisions fared better with revenue rising 1% to GBP330 million from GBP326 million a year earlier but this was below expectations as a result of project delays in the fourth quarter.
The minerals divisions which supplies slurry handling equipment reported revenue broadly flat at GBP1.30 billion.
Financially, Weir said net finance costs increased to GBP48.4 million during the period, from GBP45.3 million a year earlier, as a result of higher average net debt.
Looking ahead the firm said it will continue to "capture profitable aftermarket opportunities" and cross sell its full product portfolio across all its end markets as it attempts to return to growth.
"We expect good constant currency revenue and profit growth with group margins broadly in line with 2013 levels, although our reported results are likely to be impacted by recent adverse foreign currency movements," Chief Executive Keith Cochrane said in a statement.
Despite the company setback in 2013, it increased its final dividend to 33.2 pence from 30.0p, lifting its total annual dividend 11% to 42.0 pence from 38.0 pence.
The stock was trading at 2,457.00 pence Wednesday morning, up 106.00 pence or 4.5%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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