ENGINEERING group Weir said yesterday it was confident on growth as it expects mining and oil and gas customers to continue to spend on valves and pumps, putting it ahead of schedule with a plan to double 2009 profits by 2014.
Weir said growing demand for commodities in China was fuelling large mining projects and the expansion into new geographies of oil and gas shale drilling made it upbeat about prospects for 2011 after what chief executive Keith Cochrane called an “exceptional 2010”.
Weir said full-year pre-tax profit jumped 58 per cent to £295m, beating a consensus forecast of £289m, according to a poll of 15 analysts.
“We’re now starting to see the emergence of international interest in unconventional drilling techniques in the shale markets in Australia and China,” Cochrane said.
“As we move into 2011, the theme will increasingly turn to original equipment ... that in turn will provide an increased installed base which will then drive greater aftermarket sales.”
Weir, which also supplies customers in the power generation market, said its order book grew to £1.9bn at the end of 2010, up 39 per cent, after customers increased capital expenditure.
Shares in Weir, which have rocketed 108 per cent in the last 12 months the FTSE by over 100 per cent in the same period, closed down 4.6 per cent at £16.97.
“Weir is an increasingly high quality asset, offering sector-leading growth, market-leading positions, and a robust business model. Despite the stock’s very strong run through 2010, we believe there is more to come,” said Investec analyst Andrew Wilson.
City A.M. Reporter