31st Jul 2014 07:54
LONDON (Alliance News) - Engineering company Weir Group PLC said trading in its first-half was in line with expectations, boosted by a strong performance in its upstream Oil & Gas division, leading the company to retain its guidance for the full-year.
In its first-half results for the 26 weeks to July 4, 2014, the company said revenue declined to GBP1.14 billion from GBP1.20 billion during the period, down 5% on a reported basis.
Pretax profit declined 6% on a reported basis to GBP182 million from the GBP193 million last year.
The FTSE 100-listed company increased in interim dividend by 70% to 15.0 pence per share from the 8.8 pence per share paid last year.
As reported in June, the company cited the expected impact of currency headwinds on its full-year results; Weir Group said Thursday that adverse foreign currency exchange rate movements hit its balance sheet during the first-half, causing an 11% reduction in its reported operating profits, a GBP23 million hit.
Weir Group said that it saw a 9% increase in its order book during the half-year, with strong growth in the upstream oil & gas business which contributed a 40% year-on-year rose in divisional input. The FTSE 100-listed company also said that mining markets remain challenging, with margins impacted by the recent industrial action in South Africa.
Weir said that while delivering underlying first-half performance in line with expectations, double digit growth in Oil & Gas was partially offset by challenging mining end market conditions and the impacts of prolonged industrial action in South Africa. Value Chain Excellence initiatives continued to make progress, leveraging Weir's global scale to deliver significant savings, it said.
Looking ahead, Weir Group is confident in its second-half prospects and believes that it is well-positioned to take advantage of opportunities across its markets in the period, although remains cautious about continuing currency headwinds.
"We anticipate strong revenue and profit growth in the second half of 2014, assuming no further deterioration or disruption in mining end markets. As a result we remain on track to meet our full year expectations of good constant currency revenue and profit growth with Group margins broadly in line with 2013 levels. Reported results will continue to be affected by foreign currency headwinds, which strengthened over the first half," said Chief Executive Kevin Cochrane.
Shares in Weir Group slumped shortly after the market open Thursday; the stock is the biggest faller on the FTSE 100, trading 2.97% lower at 2,588.70 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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