British oil firm surges on back of US fracking boom

INVESTORS in Weir Group have a boom in US fracking activity to thank for a surge in the engineer’s shares yesterday.

Weir, which makes machinery and equipment for the mining, oil, and gas industries, has struggled to find its feet since being hit by the collapse of oil prices in 2014.

But punters added £336m to the firm’s value yesterday after it said full-year revenues and profits in its oil and gas division will beat predictions if the strong US fracking demand it has seen over the first half continues.

Weir said this has led it to see more parts being sold, stronger operating margins, and a recovery in prices so far this year.

Despite the firm warning overall growth will be hit by a one- off £13m historic charge, investors were left suitably impressed.

Shares rose 8.4pc, or 154p, to 1978p, placing Weir near the top of the FTSE 350.

Analysts were also taken back, with Numis upgrading the firm to ‘add’ from ‘hold’ after calling the update ‘significantly more upbeat’ than previous figures.

The FTSE 100 started the week off on the right foot after Friday’s mixed session, advancing 0.4pc, or 25.7, to 7404.1.

Miners were supported by a 1.6pc spike in copper prices after China reported a boom in its economy as a result of thriving industrial activity. Antofagasta led the pack, up 2.3pc, or 19.5p, to 878p, while Glen

core jumped 1.5pc, or 4.7p, to 320.8p, and Anglo American rose 1.2pc, or 13.5p, to 1130.5p. Pharmaceutical giant Astra

Zeneca was a notable presence among the FTSE’s winners given poor performance last week. It returned to the black after rumours of its boss’s departure to an Israeli rival began to simmer.

Shares were up 0.8pc, or 41.5p, to 5040p.

Shares in Go-Ahead Group were on the right track yesterday after the train and bus operator announced an eight-week extension to the current terms of its London Midland franchise.

The firm will now continue to operate the franchise as part of a joint venture with France’s Keolis until December.

Go-Ahead said it could run the trains as it is until February next year if the Department for Transport grants it another extension by August. The joint venture is fighting off competition from West Midlands trains for control of the line over the next ten years. The London Midland franchise has been a boon for Go-Ahead over the last year as its Southern Rail operations continue to be hit by strikes. Shares rose 2.9pc, or 50p, to 1785p.

Falling costs and lucrative mining conditions put the rocket boosters on platinum miner Lon

min yesterday. In the three months ended June 30, Lonmin mined 3.8pc more platinum than the same period last year, and 13.2pc more than the previous quarter. The firm’s costs over the period also fell 4.7pc from the prior three months, which saw the firm came close to breaching its debt covenants.

But analysts remain concerned that operating costs are still 6.4pc higher than the same time last year, with progress held back in part by a 3pc year-on-year drop in the average price of its products.

‘ Despite the better than expected results, we maintain the company will continue to face significant headwinds in terms of lower rand basket price, increasing costs and liquidity concerns,’ said Citi analysts. Regardless, shares rose 14pc, or 9.5p, to 77p, their highest value since May. In small-cap land, Stock Spirits

Group was flat at 165p despite buying a 25pc stake in an Irish whiskey maker for around £16.1m.