Interim Management Statement
INTERIM MANAGEMENT STATEMENT
The Weir Group PLC today issues the following interim management
statement in respect of the 13 weeks ended 25 September 2009.
During the third quarter, the Group has continued to perform
well despite ongoing trading uncertainties in many of its markets.
As expected revenue was adversely impacted by first half input
trends, although operating results benefited from a greater
proportion of aftermarket sales, the realignment of the cost base
at a number of operations and a continued positive foreign currency
translation effect. Order input1 for
the 39 weeks ended 25 September 2009 was 22% down against the same
period in 2008 (H12: -21%), with
aftermarket input1 down 4%
(H12: -2%).
Divisional Overview
Minerals
The minerals market continues to be impacted by the general
economic slowdown and reduced levels of capital spending.
Divisional order input1 for the 39
weeks was down 22% compared to the same period in 2008
(H12: -20%) with original equipment
orders down 39% (H12: -37%) offset by a
stabilisation in aftermarket input reflecting the resilience of our
business model. Whilst increasing enquiry levels represent the
first signs of improving market conditions, the timing of
conversion into firm orders remains open.
Oil & Gas
Divisional order input1 for the 39
weeks was down 17% compared to the same period in 2008
(H12: -12%) with upstream activities
continuing to be impacted by lower natural gas prices and rig count
offset by continued good progress in the downstream businesses.
Weir SPM remains on track to deliver against our revenue and margin
expectations for the year and we are becoming more confident that
we have seen a bottoming out of this market, although any recovery
is likely to be slow. The division's service operations continued
to perform well with good levels of activity in the North Sea and
North America offsetting the continued soft market in Dubai.
Power & Industrial
The division continues to perform well with order
input1 for the 39 weeks down 10%
compared to the same period in 2008
(H12: -21%) following a good level of
power orders in the quarter from China and first input recognised
on the 15 year Canadian Naval Engineering contract. Across the
division, power enquiry levels continue to be strong, although the
industrial markets remain sluggish.
Material Events
Following the announcement of 16 September 2009, Keith Cochrane
took over from Mark Selway as Chief Executive on 2 November 2009.
Mark will remain with the Group until 31 December 2009. The search
for a new Group Finance Director is progressing.
Financial Position
Net debt at 25 September 2009 was below 26 June 2009 (£200m)
benefiting from strong operating cashflow generation.
Outlook
The Group's strong performance in the quarter and ongoing
foreign currency translation benefits gives increased confidence in
the outlook for the 53 weeks ending 1 January 2010. The Board now
expects an increase in current year profit from continuing
operations before tax, intangibles amortisation and exceptional
items to around the upper end of current analyst
forecasts3.
Notes:
1 Input is
reported on a constant currency basis.
2
H1 refers to order input for the 26 weeks ended 26 June 2009
compared to the 26 weeks ended 27 June 2008.
3
Reuters Knowledge Consensus at 30 October for profit before tax,
intangibles amortisation and exceptional items was £166.6m with a
range between £151.60m and £177.10m.
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Contact details: The Weir Group
PLC
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Keith Cochrane, Chief Executive
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Tel. 0141 637 7111 (switchboard);
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Helen Walker, Public Relations Manager
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Tel. 0141 308 3739 (Mobile: 07789 032296)
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Maitland
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Tel. 020 7379 5151
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Suzanne Bartch
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(Mobile: 07769 710 335)
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Rowan Brown
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(Mobile: 07834 434 662)
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