Weir Group Regulatory News (WEIR)

13 May 2009 07:00



THE WEIR GROUP PLC

AGM AND INTERIM MANAGEMENT STATEMENT

For the 13 weeks ending 27 March 2009

The Weir Group PLC will today advise shareholders that, given its good performance in the first quarter, it remains confident in achieving expectations for the full year.

While order input1 declined 4%, compared to the same period in 2008, revenue1 increased 4% reflecting the recurring nature of the Group's aftermarket and momentum business and the strength of the opening order book across the longer cycle mining, oil & gas and power businesses. Together with the benefits of positive foreign currency translation, this resulted in stronger operating profits for the quarter, relative to the equivalent prior year period. 

Market overview

Minerals

The Minerals market has been significantly impacted by lower commodity prices and reduction in volume demand. In the first quarter the Minerals Division has experienced a 19% decline in order input1 when compared to the same period in 2008. Despite selective customer plant closures and evidence of some de-stocking, the decline in original equipment and new project orders is partially offset by a more resilient performance from aftermarket and spares activities. Reduced input in the first half is expected to be evident in reduced revenue in the second half of 2009 relative to the prior year.

Oil & Gas

The Oil & Gas Division achieved a 33% growth in order input1 in the first quarter. Strong growth in our downstream business provides good order visibility into 2010. Whilst our upstream Oil & Gas activities continue to be impacted by lower rig counts and the reduced price of natural gas in North America, market share gains have produced similar input when compared with the first quarter of 2008. This combined with SPM's significant backlog at the start of 2008 will result in comparatively lower revenues in 2009.

The downstream business continues to carry a solid order book and is still expected to deliver revenue growth when compared to 2008.

Power & Industrial

The Power & Industrial Division continues to perform well with order input1 growth of 6% in the quarter relative to the prior year period. In power, we continue to experience significant enquiry levels across our most important regions but do not expect to achieve the exceptional levels of order input experienced in the first half of 2008. Industrial markets, particularly in Canada, have been impacted by slowing activity levels. On balance the Power & Industrial Division expects to achieve further revenue1 progress when compared to 2008.

Financial position

There has been no material change in the financial position of the Group at 27 March 2009 as compared to 26 December 2008. 

Outlook 

The Group's strong start to the year underpins the Board's current expectations to achieve profit before tax and intangibles amortisation from continuing operations, as outlined in our preliminary results announcement on 10 March 2009, and within the range of £140m - £169m.

Footnote:

Input and Revenue growth refers to the like for like comparison of current year results to the equivalent prior year period for those businesses that have been part of the Group throughout the current and prior year reporting period, on a constant currency basis.