Aftermarket sales bolster Weir

9th Mar 2010 07:53

The weakness of sterling helped engineering group Weir grow revenues in 2009 and post a record operating profit.Revenue in 2009 grew 3% to £1,390m from £1,354m in 2008, but was down in 7% in constant currency (CC) terms.Order input in CC terms was 18% lower at £1,302m on a like for like basis. Original equipment orders were down 34% but after-market orders were down by only 2% from 2008’s levels; after-market sales formed 54% of total revenue, up from 50% in 2008.With amortisation of intangible assets excluded operating profit rose 11% to £205m in 2009 from £185m the year before while profit before tax grew 6% to £187m from £176.2m. On a CC basis operating profit was down 5%.Operating margin on a CC basis improved to 14.7% from 14.3%, reflecting the favourable impact of a higher proportion of after-market revenues and proactive management of the cost base.Net debt halved during the year to £119.2m from £239.9m at the end of 2008 Project enquiry levels at the group’s minerals division are up but the group remains cautious about prospects for 2010, and expects first half revenue from original equipment orders in this division to be lower than in the corresponding period of 2008.The immediate outlook for the upstream oil and gas business is more positive than it was a year ago but the group is expecting a more challenging environment for new orders in the downstream business.The group’s power & industrial division boasts a record order book and performance in 2010 will benefit from a strong nuclear workload.‘Although the pace and timing of global economic recovery remains uncertain and forward visibility limited, we are now targeting a broadly similar level of profitability to that achieved in 2009,’ said Keith Cochrane, the group’s chief executive/A final dividend of 16.20p has been proposed, up from 13.85p the year before. The full year dividend is therefore 14% higher at 21p compared to a pay-out of 18.5p for 2008.