Market report

Weir rises as investors back margin targets

Jon Stanton
Jon Stanton: strong growth trends

Weir Group, the Glasgow headquartered mining technology company, has set a new target for margins over the next three years which won the backing of investors.

Chief exective Jon Stanton told investors at a capital markets event that the board hoped to take its operating margin to 20% by 2026, compared with 17% this year. The savings target is doubled to £60 million.

Mr Stanton pointed to the “strong structural growth trends” in the mining markets where Weir supplies equipment including grinders, valves and pumps.

“We have been on a journey to sustainably higher margins and are on track to deliver an operating margin of 17% this year,” he said.

“I am confident and excited to move into this next phase, with our margin expansion journey well underpinned.”

The new forecasts were supported by City analysts including Peel Hunt, which sees Weir as one of the “most compelling compound growth propositions in the sector”. The shares rose 29.5p, or 1.6%, to 1894p.

Lloyds Banking Group edged up, or 0.68p or 1.5% to 45.69p as suggestions swirled that it should spin off its Halifax mortgage lending subsidiary. But talk that drinks giant Diageo could offload its beer portfolio sent shares in the Johnnie Walker and Smirnoff owner down 38p or 1.4% to 2774p.

After taking a battering from downbeat forecasts surrounding China, the ming sector staged a mini revival with Anglo American, up 44p to 2199p and Glencore 8.1p higher at 447.4p.

British American Tobacco fell 208p, or 8.4%, to 2279p after writing down the value of its US cigarette brands by £25 billion.

The FTSE 100 bounced back from two days of falls with a 25.54 points uplift to 7,515.38 as investors tracked a positive opening on Wall Street.

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