Weir looks to oil and gas clients as mining division struggles

The company, which sells pumps and valves for the mining and oil and gas industries, reported a 5 per cent drop in 2013 profit yesterday after an expected fall in orders from mining clients which have been hit by low metal prices.

“In terms of minerals, we do anticipate a further reduction in capital expenditure for 2014,” chief executive Keith Cochrane said.

The European minerals division is headquartered at Todmorden, West Yorkshire. It cut 47 jobs at the site last year, in spite of investing heavily in new plant and machinery.

The company is counting on mid-single-digit growth in North American and Middle Eastern upstream investments this year to help it return to growth, provided oil and gas prices remain stable.

“In 2014, we anticipate that the group will return to underlying growth despite mixed end market conditions,” Mr Cochrane said.

Weir said its order book was already seeing a pick-up towards the end of last year, providing a much better start to the financial year than in 2013.

Shares in Weir Group rose nearly 7 per cent on the news to close at 2,515p.

“These figures read quite positively and despite being strong into numbers, shares should continue with some momentum,” said Espírito Santo Investment Bank.