THE FTSE100 engineer Weir posted a forecast-beating 12 per cent rise in profits in 2012, as strong demand for its pumps from mining companies offset a weaker performance in oil and gas.
The pumps and valves maker posted full-year pre-tax profit of £443m, ahead of the £396m it made in 2011, and beating a consensus forecast of £434m from a poll of 21 analysts.
Profit growth was underpinned by demand for Weir’s products and services from mining companies, particularly from copper and gold projects in South America and Africa.
The group employs 420 people at its foundry in Todmorden, which makes pumps, valves and impellers for an international customer base of mining giants like BHP Billiton, Rio Tinto and Anglo American in countries as far flung as Chile, Finland and Canada. Its equipment is used to push slurry through pipes and is essential in mining and minerals processing.
The group’s operations at Todmorden are part of the minerals division, which made an operating profit of £256m, up 21 per cent on 2011.
Weir invested £5m in the foundry last year. It acquired the site in 1999 and considered closing it in 2005. But local management introduced ‘lean’ manufacturing principles inspired by Honda and turned the foundry into a success story.
Weir’s pumps are also used by shale oil and gas producers in the US to force sand and chemicals into the ground to fracture the rocks, but low gas prices resulted in a decline in drilling activity in the second half of the year.
“Looking ahead into 2013, despite more challenging markets, the group will continue to deliver profitable growth,” chief executive Keith Cochrane said.
The company said it will raise its full-year dividend by 15 per cent to 38p and that a double digit increase was also planned for 2013.
Shares in Weir, which have gained 21 per cent in the last three months, closed at