Shares in Weir drop on update

Shares in Glasgow engineering group Weir fell almost 7 per cent yesterday after it said third-quarter operating profits were expected to be slightly lower than forecast.

In an interim management statement the company blamed increased costs and investments in its minerals business for the reduced performance.

But the company said increased levels of activity in the oil and gas sector helped third-quarter orders to come in 21 per cent higher than the prior year period and it anticipates strong growth in fullyear constant currency revenue and profits at a group level.

Chief executive Jon Stanton said: “As the North American onshore oil and gas industry continues to demonstrate its increased relevance as a source of global supply, our oil & gas business is fully leveraging its market leadership position in support of higher activity levels among customers.

“While international markets remained challenging the division has accelerated in 2017 as we expected and is well placed to continue to fully capture future opportunities.”

Stanton said the investment in the minerals business meant the company would be “well set to benefit from increased momentum in 2018 and beyond”.

Orders in the flow control division fell 2 per cent in the quarter as Weir said markets continued to be challenging.

“While there are early signs of these markets stabilising, they remained highly competitive and subject to project delays,” it said.

The company said it anticipates strong growth in full year constant currency revenue and profits at a group level. Net group debts have risen but Weir said that was in line with normal patterns.