Weir Group PLC
18 January 2007
18 January 2007
THE WEIR GROUP PLC
The Weir Group PLC issues a trading update in advance of its preliminary
announcement for the 12 months ended 29 December 2006 due to be published on 21
In the second half, the Group continued to benefit from generally strong market
conditions, the restructuring undertaken in 2005 and the impact of recent
We expect profit before tax and exceptional items for the full year to be
substantially ahead of 2005 and at the upper end of current Reuters market
estimates. Revenue growth in the second half is expected to be around 15%
resulting in growth for the year of around 19%.
As a result of an ongoing focus on working capital management, cash generation
has been strong which should result in a further reduction in net debt compared
to that reported at the time of the interims.
In addition, net exceptional gains of around £15.5m are expected to be
recognised for the year following the completion of the sale of the
Huddersfield site of Weir Valves & Controls UK and agreed changes to the Group's
UK pension arrangements which will reduce the pension fund deficit.
Divisional Trading Comment
In the second half, our Engineering Products Division continued to achieve good
levels of growth in order input, sales and profits leading to further
improvement in underlying operating margins when compared to 2005.
The division benefited from restructuring undertaken in 2005 and the full year
effect of the acquisition of Gabbioneta.
As anticipated, revenues in the second half are expected to be marginally down
when compared to 2005. While underlying profitability and operating margins
improved, reported operating results are expected to be down on 2005 due to
additional once off restructuring costs in the Middle East, USA and UK.
Defence, Nuclear & Gas
The Defence, Nuclear and Gas Division continued to make progress with second
half revenues and operating profits ahead of last year.
Outlook for 2007
The continuing level of input growth in 2006 and strength of the year-end order
book are expected to translate to further progress across all divisions in 2007.
The pre-tax profit (before exceptionals) range of analysts' forecasts on Reuters
Knowledge Consensus at 9 January 2007 was £74.60 m to £86.70 m with consensus at
Contact details: The Weir Group PLC
Mark Selway, Chief Executive Tel. 0141 637 7111 (switchboard);
Helen Walker, Public Relations Manager Tel. 0141 308 3739 (Mobile: 07789 032296)
Maitland Tel. 020 7379 5151
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