31st Jul 2025 10:21
(Alliance News) - Weir Group PLC on Thursday raised operating margin guidance underpinned by a continued favourable backdrop in mining which is supporting demand for aftermarket products.
The Glasgow-based engineering company said pretax profit from continuing operations was flat at GBP165 million in the six months ended June 30 with revenue edging down 1.7% to GBP1.19 billion from GBP1.21 billion.
Adjusted operating profit rose 10% to GBP237 million from GBP215 million with adjusted operating profit margin of 19.8%, rising from 17.8% last year.
Weir raised the dividend by 9.5% to 19.6 pence per share from 17.9p.
The company was upbeat for the future noting activity levels in mining markets are positive underpinning demand for its aftermarket offerings.
The continued favourable backdrop in mining, combined with execution of Performance Excellence underpin confidence in upgrading 2025 operating margin guidance to 20%, Weir said.
This would be a year ahead of schedule, and ahead of market consensus of 19.7%. In 2024, Weir reported an operating margin of 18.8%.
Performance Excellence was launched in 2023 and targetted GBP60 million of cost savings by 2026. At the time Weir aimed to achieve an operating margin of 20% in 2026.
Weir said the raised outlook includes an additional GBP10 million underlying improvement in profitability offset by translational foreign exchange headwinds expected through the second half of the year.
Weir expects free operating cash conversion of between 90% and 100% on 2025, in line with medium-term guidance.
"Further out, the long-term value creation opportunity for Weir is compelling", the company said.
"The fundamentals for our business are highly attractive, underpinned by long-term structural growth trends in our mining markets, and our technology strategy to accelerate sustainable mining. In addition, we expect the benefits of Performance Excellence will drive further margin expansion and move our operating margins sustainably beyond 20%, while our strong cash generation and balance sheet give us optionality to allocate capital, compounding total shareholder returns," Weir added.
Shares in Weir rose 2.5% to 2,690.00 pence each in London on Thursday.
By Jeremy Cutler, Alliance News reporter
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