Weir Group sees strong growth driven by demand in the mining sector
Weir Group shares soar as engineer boasts record order book and profits are lifted by mining sector demand
- The FTSE-250 engineering company is on track to meet its 2023 targets
- CEO Jon Stanton cites ‘twin demands for decarbonisation and economic growth’
Weir Group profits jumped by a quarter last year after orders boomed on the back of strong demand from the mining sector as the industry looks to decarbonise.
The FTSE 250-listed engineering group reported a 21 per cent increase in revenues at constant currency levels to nearly £2.5billion as total operating profit jumped 25 per cent to £395million.
Growth was driven in part by a strong second half and final quarter, with orders rising 8 per cent in the final three months of the year.
In demand: Weir Group has bolstered its bottom line amid strong demand and drive to sustainability
The company has increased its final dividend by 57 per cent to 19.3p, making it 32.8p for the year.
Jon Stanton, chief executive officer said: ‘The mining industry is playing a crucial role in meeting the twin demands for decarbonisation and economic growth, resulting in multi-decade demand growth for critical metals. Weir is the focused mining technology leader that is well placed to capitalise.
‘This is reflected in the proven performance of our mining businesses through the cycle and was further evidenced in 2022.
‘We are making mining smarter, more efficient and sustainable. We are growing faster than our markets, strengthening margins and cash and reducing our CO2 footprint.’
Looking ahead the company said it has begun 2023 with a ‘record order book’ amid positive conditions in the mining market, with high activity levels and a focus on sustainable operations driving demand.
The company says its longer-term prospects are strong underpinned by decarbonsiation efforts and the transition to sustainable mining.
It is on track to achieve its target of 17 per cent operating margin this year, as well as revenue and profit growth.
Analyst firm Peel Hunt said it expects Weir to see 5 per cent revenue growth this year, with gross earnings reaching £400 million.
Weir’s share price rose 8.9 per cent or 169.00p to 2,068.00p over the morning following its results.