Interim Management Statement

RNS Number : 7474K

Weir Group PLC

26 April 2010

 



 

THE  WEIR  GROUP  PLC

INTERIM  MANAGEMENT  STATEMENT

26 April 2010

The Weir Group PLC today issues its Interim Management Statement for the period to 23 April 2010. Financial information is given for the 13 weeks ended 2 April 2010.

During the first quarter, the Group has performed better than expected with an improvement in activity levels across a number of end markets. As a result of the positive first quarter and the current outlook through to June, we now expect profits for the first half to be substantially ahead of the prior year period. Aftermarket visibility beyond June remains limited and as such, it is too early to call any significant upside in the second half. Overall, we anticipate that full year profits before intangibles amortisation and tax will be around £30 million ahead of our previous expectations.

While revenue in the quarter was adversely affected by a weaker opening order book compared to 2009, this was substantially offset by stronger growth than expected in shorter cycle aftermarket revenues. Operating profits and margins were up on the equivalent prior year period, benefiting from an increased proportion of aftermarket sales, stronger operating leverage and ongoing returns from our downturn plans.

Order input for the 13 weeks was 16% up against the prior year period, with aftermarket orders up 19%.

MINERALS

Order input for the 13 weeks was up 30%, with original equipment orders increasing by 38% following the award of a C$58m contract to our Canadian business with delivery in 2011.  Underlying order input, excluding the impact of this exceptional contract, was up 12% with original equipment orders broadly in line with the prior year. Aftermarket orders were up 24% benefiting from customer restocking and weaker prior year comparatives.

It is not anticipated that first quarter aftermarket trends will continue for the balance of the year and while project enquiry levels remain strong, we remain cautious as to the timing of conversion into original equipment orders. In light of our strong first quarter trading performance, we now anticipate that the division will be able to achieve a broadly similar level of operating profits to that realised in 2009, in constant currency terms.

OIL & GAS

Order input for the 13 weeks was up 4% with upstream input up 74% benefiting from increased unconventional rig count and strong aftermarket sales reflecting the harsher shale environments in which our customers are now operating. As expected, this was largely offset by reduced downstream original equipment orders. While forward visibility for our upstream business remains limited, the stronger than anticipated performance in the first quarter means that we are now targeting that SPM US$ revenues for the full year will be broadly in line with those achieved in 2008. Downstream trading continues to be in line with our previous expectations.

POWER & INDUSTRIAL

Order input for the 13 weeks was down 16% reflecting the timing of a number of large contract awards in the first quarter last year. Quotation activity remains strong in the nuclear sector and over the full year we still expect to see divisional input, revenue and margin progression.

NET DEBT

There has been no material change in net debt at 2 April 2010 as compared to 1 January 2010.

Note: Order input is reported on a constant currency basis

A conference call for analysts and investors will be held at 8 a.m. (UK time) on Monday 26 April to discuss this statement.  

For dial-in details please contact Maitland on [phone]  

Contact details:
The Weir Group PLC
Helen Walker, Public Relations Manager	Tel. [phone] (Mobile: [phone])
Maitland	Tel. [phone]
Suzanne Bartch	(Mobile: [phone])
Rowan Brown	(Mobile: [phone])

 

END

 

 

IMSKKPDQBBKBQQB