Higher margin growth for Scots company
Weir upgrades on stronger US oil and gas
The company’s oil and gas division has seen increased volumes, stronger operating leverage and modest pricing recovery ahead of prior expectations, and has delivered low double-digit operating margins in the first half.
Assuming supportive market conditions continue, the division is now expected to deliver low-teens operating margins through the second half with full year revenues and operating profits that are above the upper end of analysts’ estimates.
At group level, this growth will be partially offset by one-off charges to operating profit of £13m related to previously announced legacy contract delivery challenges in the Gabbioneta business, part of the group’s flow control division. Expectations for the minerals division remain unchanged.
The updated outlook for the group’s full year performance is now for strong constant currency revenue and profit growth. As previously indicated, profits will be weighted to the second half of the year.
The group will publish its interim results on 27 July.