28th Feb 2025 10:21
(Alliance News) - Weir Group PLC on Friday announced a major acquisition in Australia as it reported a healthy increase in profit in 2024.
The engineering firm has agreed to buy Perth, Australia-based Mining Software Holdings Pty Ltd, known as Micromine, for GBP657 million.
Micromine is a global software provider to the mining industry, with solutions across the upstream mining value chain. It supports critical mining operations from exploration through mine design and planning, operational scheduling and mining operations in hard ore, soft ore and underground applications.
Glasgow-based IMI said the cash deal is expected to close in the second quarter. It expects the acquisition to accretive to earnings per share in the first full year of ownership with return on invested capital greater than weighted average cost of capital in 2028.
Chief Executive Officer Jon Stanton said: "The acquisition of Micromine is a significant step in our strategy of investing in technology to accelerate smart, efficient and sustainable mining. The combined force of Micromine and Weir will create a sector-leading globally scaled platform to optimise performance across the mining process."
Jefferies analyst Andy Douglas said: "This is a good, strategic deal that we are upbeat on over the longer-term, but management is paying up in the near-term."
In response, shares in Weir rose 4.3% to 2,384.00 pence each in London on Friday morning.
The deal came as Weir said pretax profit rose 8.1% to GBP347 million in 2024 from GBP321 million a year prior. Adjusted operating profit rose 2.8% to GBP472 million from GBP459 million. But revenue fell 4.9% to GBP2.51 billion from GBP2.64 billion.
The firm declared a 22.1 pence final dividend, brings the total up 3.6% to 40.0p in 2024 from 38.6p a year before.
CEO Stanton said: "The power of our transformed platform was evident in our strong execution in 2024 with operating margins and cash conversion significantly ahead of expectation, supported by strengthening demand conditions in the second half."
As we go into 2025, we have a growing pipeline of project bids, a strong order book, and see positive aftermarket demand drivers in mining. For the full year, we expect to deliver growth in revenue, operating profit and margins. We expect our Performance Excellence programme will deliver incremental savings of GBP20 million in 2025, and cumulative savings of GBP80 million through 2026, moving our operating margins sustainably beyond 20%."
By Jeremy Cutler, Alliance News reporter
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