Weir Group Regulatory News (WEIR)

The Weir Group PLC

Trading update

14 June 2010

The Weir Group PLC ("Weir" or the "Group") today issues the following update on trading in respect of the 22 weeks ended 4 June 2010. A separate announcement has also been issued today regarding the Group's acquisition of Malaysia based Linatex for US$200m (£138m)1. The Group is scheduled to announce its interim results for the 26 weeks ending 2 July 2010 on 3 August 2010.

Trading for the 9 week period to 4 June has been stronger than expected, especially at SPM and across the Minerals division. Aftermarket orders have continued to exceed expectations and we are starting to see a positive emerging trend in original equipment orders. Order input for the 22 weeks was up 25% (Q1: 16%) against the prior year period with aftermarket orders up 24% (Q1: 19%). These trends, together with a positive benefit from foreign exchange translation, means that we now expect profit before intangibles amortisation and tax for the 26 weeks ending 2 July 2010 to be around £140m. In addition we now expect profit for the second half of 2010 to be significantly ahead of profit for the second half of 2009 in constant currency terms.

Divisional update

Minerals

Order input for the 22 weeks was up 27% (Q1: 30%) with original equipment orders up 34% (Q1: 38%) reflecting the C$58m contract award at our Canadian business as previously announced. Excluding the effect of this award, order input was up 16% (Q1: 12%) with original equipment up 8% (Q1: broadly flat) reflecting the first positive signs of enquiry conversion. Aftermarket orders were up 22% which while lower than the 24% reported for the first quarter still exceeded our expectations. This together with a positive trend in original equipment orders means that we now expect 2010 full year operating profits in constant currency terms to be ahead of that achieved in 2009. 

Oil & Gas

Order input for the 22 weeks was up 31% (Q1: 4%) with upstream input up 96% (Q1: 74%) benefitting from continued high activity levels in the North American shale gas markets. Aftermarket sales have continued to be very strong and we are now also seeing the first signs of a pick up in original equipment orders for delivery through 2010. As a result of these more positive trends we are now targeting 2010 full year SPM revenue of around US$350m, an increase of 25% on our previous target. As expected, downstream input is lower year on year. 

Power & Industrial

Order input for the 22 weeks was in line with the prior year period (Q1: down 16%) reflecting a number of Chinese nuclear contract wins in the last 9 weeks. There has been no change to our expectation of input, revenue and margin progression over the full year.

Note: Order input is reported on a constant currency basis.

1 Exchange rate of £1 = US$ 1.45 at closing in London on 11 June 2010 A conference call for analysts and investors will be held at 8 a.m. (UK time) on Monday 14th June to discuss this statement and the Linatex acquisition. 

For dial-in details please contact Maitland on +44 (0) 207 379 5151