Weir Group Regulatory News (WEIR)

18 Jan 2007 07:00

Weir Group PLC18 January 2007 18 January 2007 THE WEIR GROUP PLC TRADING UPDATE The Weir Group PLC issues a trading update in advance of its preliminaryannouncement for the 12 months ended 29 December 2006 due to be published on 21March 2007. In the second half, the Group continued to benefit from generally strong marketconditions, the restructuring undertaken in 2005 and the impact of recentacquisitions. We expect profit before tax and exceptional items for the full year to besubstantially ahead of 2005 and at the upper end of current Reuters marketestimates. Revenue growth in the second half is expected to be around 15%resulting in growth for the year of around 19%. As a result of an ongoing focus on working capital management, cash generationhas been strong which should result in a further reduction in net debt comparedto that reported at the time of the interims. In addition, net exceptional gains of around £15.5m are expected to berecognised for the year following the completion of the sale of theHuddersfield site of Weir Valves & Controls UK and agreed changes to the Group'sUK pension arrangements which will reduce the pension fund deficit. Divisional Trading Comment Engineering Products In the second half, our Engineering Products Division continued to achieve goodlevels of growth in order input, sales and profits leading to furtherimprovement in underlying operating margins when compared to 2005. The division benefited from restructuring undertaken in 2005 and the full yeareffect of the acquisition of Gabbioneta. Engineering Services As anticipated, revenues in the second half are expected to be marginally downwhen compared to 2005. While underlying profitability and operating marginsimproved, reported operating results are expected to be down on 2005 due toadditional once off restructuring costs in the Middle East, USA and UK. Defence, Nuclear & Gas The Defence, Nuclear and Gas Division continued to make progress with secondhalf revenues and operating profits ahead of last year. Outlook for 2007 The continuing level of input growth in 2006 and strength of the year-end orderbook are expected to translate to further progress across all divisions in 2007. Footnote: The pre-tax profit (before exceptionals) range of analysts' forecasts on ReutersKnowledge Consensus at 9 January 2007 was £74.60 m to £86.70 m with consensus at£82.70m. Contact details: The Weir Group PLCMark Selway, Chief Executive Tel. 0141 637 7111 (switchboard);Helen Walker, Public Relations Manager Tel. 0141 308 3739 (Mobile: 07789 032296)Maitland Tel. 020 7379 5151Suzanne BartchPeter Ogden Note to Editors: Print quality images are available to download at http://www.newscast. This information is provided by RNS The company news service from the London Stock Exchange