Mining provider forecasts substantially better profits

Jun 24 2008 by Iain Laing, The Journal

A LEADING provider of engineering products for the oil and mining industries has said it expects profits to be substantially ahead of last year.

Glasgow-based Weir, which employs around 9,000 people worldwide, has continued to benefit from generally strong market conditions, particularly in mining.

As well as bettering last year’s figure, Weir said it was on course to deliver annual profits at the upper end of current market estimates. The current range in the City is for a figure between £142.5m and £163.7m.

It said it also benefited from reduced interest charges as a result of lower interest rates in the US, where it has carried out recent acquisitions.

The group’s customers include many of the world’s major mining companies, as well as BP, BAE Systems and the Ministry of Defence. Products include specialist valves and pumps used in a variety of engineering fields.

Weir also said yesterday it had reorganised its business into three divisions, reflecting its focus on mining, oil and gas and power and industrial markets.

Numis Securities upgraded its 2008 and 2009 forecasts by 5.5% following the update. It is now looking for profits of £165m this year, compared with the £120.2m in 2007.

Analyst Nick Webster said: “Weir is a momentum stock and with the expectation of further upgrades to estimates, we believe it will continue to outperform.”