- 17% order growth (-7% LFL1) benefiting from recent portfolio transformation
o Minerals order intake +5%: aftermarket +8% and OE gathering momentum
o ESCO pro forma2 orders +1%
o Oil & Gas orders down 27%
- Operating profit3 of £172m up 5% (-22% LFL1); in line with our expectations
o Minerals operating margin of 17.2%
o ESCO operating margin 14.1%, +300bps year-on-year
o Oil & Gas operating profit flat on H2 2018
- H1 2019 Net debt impacted by working capital phasing and IFRS 16
- Successful execution of portfolio transformation
o Flow Control sale completed for enterprise value of £275m
o Good progress on ESCO cost synergies; annualised run rate now $20m
- Good traction for new technologies focused on productivity and sustainability
o Increasing adoption of Enduron® HPGR and interest in Terraflow® tailings technology
o New SPM® QEM 5000 pump supporting transition to electric fracking
- Full year outlook continues to be for another year of good constant currency revenue and profit growth
o Oil & Gas operating profit now expected to be toward the lower end of its previous £55m-£95m range
|H1 2019||H1 20186||As reported||Constant Currency5||Like-for-like1,5|
|Profit before tax3||£147m||£147m||0%||n/a||n/a|
|Reported profit after tax||£78m||£64m||21%||n/a||n/a|
|Earnings per share3||42.2p||47.4p||-11%||n/a||n/a|
|Reported profit after tax||£53m||£67m||-21%||n/a||n/a|
|Earnings per share||20.3p||29.1p||-30%||n/a||n/a|
|Cash generated from operations3||£54m||£139m||-61%||n/a||n/a|
|Dividend per share||16.50p||15.75p||5%||n/a||n/a|
1 Like-for-like excludes the impact of acquisitions. ESCO was acquired on 12 July 2018.
2 Based on ESCO’s adjusted, unaudited US GAAP management accounts.
3 Adjusted to exclude exceptional items and intangibles amortisation. Reported operating profit and profit before tax from continuing operations were £130.7m (2018: £110.3m) and £105.7m (2018: £93.4m) respectively.
4 The Group financial highlights and divisional financial reviews include a mixture of GAAP measures and those which have been derived from our reported results in order to provide a useful basis for measuring our operational performance. Operating results are for continuing operations before exceptional items and intangibles amortisation as provided in the Consolidated Income Statement. Details of other non-GAAP measures are provided in note 1 (e) of the financial statements. Continuing operations excludes the Flow Control division which has been sold and reported in discontinued operations. ESCO was acquired on 12 July 2018 and its results have been included from that date.
5 2018 restated at H1 2019 average exchange rates.
6 Prior year restated for reclassifications between continuing and discontinued operations. Details are provided in note 1(d) of the financial statements.
Jon Stanton, Weir Group Chief Executive Officer said:
“The first half of the year progressed largely as we expected it to. We are making good progress in our mining equipment businesses benefiting from our focus on aftermarket-intensive applications, particularly for battery metals including copper, lithium, nickel and cobalt supported by our extensive installed base and global service network. Our pipeline of firm OE quotes has grown significantly year-on-year with encouraging demand for our technology that reduces water and energy consumption.
While oil and gas markets in North America continued to be challenging compared to the same period last year we saw good demand for our latest innovations. This included our Large Bore Simplified Frac System and our new QEM 5000 frack pump which is well positioned to support the development of future electric frack fleets.
As we look to the rest of 2019, we continue to anticipate another year of good constant currency revenue and profit growth.”
A live webcast of the management presentation will begin at 0800 (BST) on 30 July 2019 at www.investors.weir. A recording of the webcast will also be available at www.investors.weir.