Weir reports record profits and margins for 2012

Engineering solutions group Weir managed to register record profits and margins last year and said that it expects another year of profitable growth in 2013.

The company, which works in the mining, oil & gas and power markets, reported a profit before tax of £443m for the 52 weeks to December 28th, up 12% from £396m in 2011, helped by a strong performance by the Minerals division, which saw "robust project activity" in most key mining equipment markets. Earnings per share increased by 12% from 133.6p to 150.1p.

Operating margins improved from 18% to 19.1% over the year, above the group's own forecasts, reflecting a "strong second-half improvement in Minerals and continued margin resilience in Oil & Gas".

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Revenue rose 11% from £2.29bn to £2.54bn, up 4.0% on a like-for-like basis. Emerging markets revenue surged by 23% during the period and now account for 37% of group sales, up from 34% in 2011.

However, the order input slipped 2.0% from £2.44bn to £2.40bn as original equipment orders fell 13% owing mainly to weakness in the North American pressure pumping market.

The firm raised its full-year dividend by 15% from 33p per share to 38p per share and said that it plans a further double-digit increase for 2013.

Chief Executive Keith Cochrane said: "Weir delivered a strong performance for shareholders in 2012 despite challenging pressure pumping markets. We responded rapidly to changing market conditions, realigned capacity, reduced costs in affected areas and continued to maximise operational and cost efficiencies.This allowed us to deliver 2012 results in line with our mid-year expectations."

As for 2013, Cochrane said that while markets will be "more challenging", Weir will "continue to deliver profitable growth through new product introductions and a range of operational initiatives".

"Assuming a gradual economic and end market improvement, we expect to deliver low single-digit revenue growth and broadly stable margins in 2013 with lower first-half profits offset by growth in the second half."