Weir disposes of two renewables-focused operations

Engineering company The Weir Group announced on Thursday the disposal of two renewables-focused operations - American Hydro Corporation and Ynfiniti Engineering Services - for a combined initial consideration of £34.4m, rising to £36.7m subject to certain conditions being satisfied.

The FTSE 250 firm said the businesses, which were part of the Flow Control division, generated combined revenues of £38m and £1.4m operating profit in 2015.

Weir will record a loss on disposal of around £5m, with the disposals being a part of the group’s ongoing £100m asset disposal programme “which is progressing to plan”.

On a constant currency basis, net debt at the end of June will be lower than previous guidance as a result of the disposal proceeds, Weir’s board confirmed, as well as the scrip dividend uptake.

Both disposals are expected to be complete by 30 June.

“The group notes that trading in April and May was consistent with the trends seen in Q1 and in-line with expectations,” the board added in the statement.

“Orders for the five months to the end of May were 15% below the prior year period with orders and revenues in April and May slightly lower than the prior year.

“As a result, the group remains on track to meet its prior guidance for first half profits, ahead of current market expectations,” it explained.

Weir said underlying cash generation remained robust, and there was no change to the group’s prior full-year guidance as outlined on 28 April.