Weir shares surge after hike in first half earnings forecast

City A.M. Reporter
ENGINEERING group Weir saw its shares jump by almost 15 per cent yesterday after it said its first half profit would be well ahead of last year.

Weir, a maker of pumps and valves for the mining, oil and gas and power generation industry said it anticipates full-year profit to be about £30m higher than previous City expectations of around £185m. Aftermarket sales would account for £12m of the increase while strong sales from its oil and gas unit would contribute a further £12m.

Meanwhile, the rest of the rise would come from favourable raw material prices, chief executive Keith Cochrane said.

Industrial materials firm Cookson also raised its outlook for the first half yesterday as global steel production and electronics end-markets grew at a faster rate than expected. Last week, manufacturing firm IMI said its first half had improved – driven by better demand for commercial vehicles and margin improvements from cost cuts.

Analyst Nick Webster of Numis Securities said Weir’s balance sheet strength gave it scope for acquisitions.

“We estimate Weir has firepower in excess of £400m and we would expect the company to complete deals over the next 12 months.”