Weir Group on track for recovery in 2017

Weir Group posted its interim management statement for the period to 26 April on Thursday, as the board reporting the company was on track for a “strong” recovery in 2017, with full-year profits anticipated to be in line with current market expectations.

The FTSE 250 company said first quarter order input grew 15%, while minerals aftermarket orders increased 13% and original equipment was up 4%.

Oil and gas orders rose 50%, which Weir said was driven by “significant growth” in North America.

Flow control orders fell by 11%, as downstream and power markets continued to be “challenging”.

Weir also reported “continued strong cash generation” in 2017 thus far.

“Mining and oil and gas markets continued to grow in the first quarter, supporting the view that we are at the beginning of a cyclical upturn in our main markets and I'm confident the group is well positioned to benefit,” said chief executive Jon Stanton.

“Demand for the group's mission-critical technology was supported by miners investing in productivity gains and a significant increase in North American onshore oil and gas activity, although pricing in this market remained at low levels.

“Power, mid and downstream markets, which are later cycle, continued to be challenging and will take longer to recover.”

Stanton said that, assuming commodity prices remained supportive, the board continued to anticipate “good growth” in constant currency revenues and “strong” cash generation, with full year profits anticipated to be in line with current market expectations and weighted towards the second half.

“The minerals division is expected to perform as anticipated with more challenging conditions in flow control partially offsetting additional momentum in oil and gas.”