Weir cranks up mining focus after losses
Weir Group, the Glasgowheadquartered global engineer, is eyeing a possible sale of its under-pressure oil and gas division after posting a full-year loss.
The firm reported a £372 million pre-tax loss for the year to 31 December, compared with a £86m profit the year before.
Revenues were up 7 per cent on a constant currency basis to £2.66 billion while operating profit, on the same measure, dipped 1 per cent to £352m.
The board is recommending a final dividend of 30.45p per share, resulting in a total dividend of 46.95p for the year, up 2 per cent from 2018 and “reflecting confidence in the long-term prospects of the group”.
Chief executive Jon Stanton said: “2019 saw a strong performance from our mining businesses with margin expansion in both minerals and Esco.
“North American oil and gas market conditions deteriorated significantly through the year and we undertook a major cost reduction programme in response. While the long-term prospects for shale remain positive, current market dynamics mean it now has a very different investment case to our premium mining technology positions.
“We are therefore taking actions so that we can maximise value for shareholders whenever the right opportunity is identified.”
He said coronavirus had given Weir cause for concern.
RBC Capital Markets analyst Mark Fielding noted: “A small reduction in consensus may be driven by oil and gas, but we don’t see this as a major surprise.”