Weir has become the latest of Britain’s resurgent engineers to report a rip-roaring return to profit growth and chunky rises in the dividend.
The producer and servicer of heavy duty pumps for the oil and mining industries, and increasingly for the shale gas market in America, comfortably outstripped City forecasts on orders and earnings. It also pushed up its dividend for the year by 29 per cent to 27p.
Weir’s performance follows a week of strong reporting from Britain’s engineering groups. IMI, the valve-maker, increased its payout by 29 per cent. Amec, the energy industry services group, pushed it up 50 per cent. GKN, the automotive engineer, reinstated a dividend last paid in 2008.
Keith Cochrane, Weir’s chief executive, admitted that the only barrier to the company’s growth is an ability to produce enough gear fast enough. “Our biggest challenge is execution,” he said. “Our markets, especially shale gas, have been growing very rapidly.”
Weir reported orders up 40 per cent at £1.9 billion, revenues of £1.6 billion, up 10 per cent on an organic basis, and pre-tax profits of £295 million — 58 per cent higher than in 2009, or 49 per cent better on a like-for-like basis.
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Weir shares closed 84p off at £16.95, putting the group on a multiple of almost 17 times after posting earnings per share for 2010 of 100.4p.
No women on the board yet, and no apologies
Weir Group is making no apologies for being one of the 18 FTSE 100 companies outed by The Times as having no women on its board (Robert Lea writes).
The engineering group has never had a female director and Mr Cochrane indicated he would not be going out of his way to meet the target in the recent report by Lord Davies of Abersoch that 25 per cent of FTSE 100 boards be made up of women within four years. “I am not a great believer in quotas. I am a believer in having the right people and the right range of skills,” the chief executive said. “We have a number of women who are managers.
“At board level, it is important we have the right skill sets. [The issue of female board representation] is a fair question to pose for business, It is prompting debate, it is giving us food for thought ... and we will consider the issue in the future.”