Weir profit dragged down by acquisition, restructure costs

Writer, Stock Market Wire
Wednesday, February 27, 2019 - 07:59

Engineering company Weir Group posted a 71% fall in annual profit, pinned on exceptional acquisition and restructuring costs.

Pre-tax profit for the year through December fell to £53m, even as revenue rose 15% to £2.45bn.

One-off charges included £94m in relation to the acquisition of ESCO, including an inventory write-down and acquisition and integration costs.

A legacy product warranty issue in the oil and gas division led to an exceptional charge of £24m, while restructuring charges of £29m were also recorded during the period.

Underlying pre-tax profit rose 22% to £310m and the company declared annual dividends of 46.2p per share, up 5% on-year.

'The last year has been transformational for the group,' chief executive Jon Stanton said.

'With ESCO, we completed our largest ever acquisition while also agreeing the sale of the Flow Control division.'

'The result is a more focused and higher-quality global business that is simpler and stronger with more than 80% of the Group's revenues from attractive upstream mining and oil and gas markets.'

'Looking to the full year, we currently expect our mining and infrastructure markets to continue to benefit from positive industry fundamentals with oil and gas activity to improve modestly from current levels.'

'Overall, assuming market and macro-economic conditions remain supportive, we anticipate the group will deliver another year of good constant currency revenue and profit growth, supported by strong execution of our We are Weir strategy.'

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