Weir Group scales back revenue guidance for full year

Scottish mining-focused engineering group Weir reported a small rise in first-half adjusted profits and said that strong aftermarket demand has bolstered its project outlook, though full-year revenues will likely miss forecasts.

While the company reiterated its outlook for constant-currency growth in operating profit and upgraded its forecast for operating margins at 18% – ahead of previous guidance – revenues are now expected to be "at the lower end of the range of current analysts estimates", which range from £2.60bn to £2.76bn.

Revenues in the six months to 30 June totalled £1.21bn, down 7% on the year before on a reported basis and 3% lower at constant currencies.

Statutory pre-tax profit was 7% lower at £117m, but the adjusted profits from continuing operations were 3% ahead at £193m.

Orders were more or less stable with last year at £1.25bn, helped by high levels of activity in hard rock mining, driving group aftermarket orders up 2%.

Looking ahead, the company said it has seen a growing order pipeline for the second half, helped by a £53m greenfield contract awarded in July for an high pressure grinding rolls (HPGR) led project.

"Our performance in the first half of the year is another proof point along the journey to deliver market leading through-cycle growth at sustainably higher margins. The resilience of our aftermarket biased business model and strong delivery of Performance Excellence benefits demonstrate the significant upside potential in our equity case," said chief executive Jon Stanton.

The stock was down around 1% at 1,912p in early deals on Tuesday.