Weir Share Discussion Threads

[apad] 27/2/2013 10:08

Like the cash flow figures and current assets/liabilities figures. Nothing else to comment on so far. Be interesting to see how the 'shares on loan' figures change next week.
apad

[broadwood] 27/2/2013 08:24

Weir reports record profits and margins for 2012


Wed 27 Feb 2013


Weir reports record profits and margins for 2012 Engineering solutions group Weir managed to register record profits and margins last year and said that it expects another year of profitable growth in 2013.

The company, which works in the mining, oil & gas and power markets, reported a profit before tax of £443m for the 52 weeks to December 28th, up 12% from £396m in 2011, helped by a strong performance by the Minerals division, which saw "robust project activity" in most key mining equipment markets. Earnings per share increased by 12% from 133.6p to 150.1p.

Operating margins improved from 18% to 19.1% over the year, above the group's own forecasts, reflecting a "strong second-half improvement in Minerals and continued margin resilience in Oil & Gas".

Revenue rose 11% from £2.29bn to £2.54bn, up 4.0% on a like-for-like basis. Emerging markets revenue surged by 23% during the period and now account for 37% of group sales, up from 34% in 2011.

However, the order input slipped 2.0% from £2.44bn to £2.40bn as original equipment orders fell 13% owing mainly to weakness in the North American pressure pumping market.

The firm raised its full-year dividend by 15% from 33p per share to 38p per share and said that it plans a further double-digit increase for 2013.

Chief Executive Keith Cochrane said: "Weir delivered a strong performance for shareholders in 2012 despite challenging pressure pumping markets. We responded rapidly to changing market conditions, realigned capacity, reduced costs in affected areas and continued to maximise operational and cost efficiencies. This allowed us to deliver 2012 results in line with our mid-year expectations."

As for 2013, Cochrane said that while markets will be "more challenging", Weir will "continue to deliver profitable growth through new product introductions and a range of operational initiatives".

"Assuming a gradual economic and end market improvement, we expect to deliver low single-digit revenue growth and broadly stable margins in 2013 with lower first-half profits offset by growth in the second half."

[broadwood] 27/2/2013 08:08

The hare's running.

[ed 123] 27/2/2013 08:05

Yes. All time high for the shares. Shorts suffering.

[thegameofmoney] 27/2/2013 08:04

Never seen my wealth grow so quick lol :)

[broadwood] 27/2/2013 08:02

Its looking very happy at the start.

[phil140158] 27/2/2013 07:25

Whilst the results seem good and should reassure, is there anything there which would encourage shorters to hold their position?

[broadwood] 27/2/2013 07:06

Hopefully should reaasure.


Keith Cochrane, Chief Executive, commented:
"Weir delivered a strong performance for shareholders in 2012 despite
challenging pressure pumping markets. We responded rapidly to changing market
conditions, realigned capacity, reduced costs in affected areas and continued to
maximise operational and cost efficiencies. This allowed us to deliver 2012
results in line with our mid-year expectations. We continued to invest in the
Group's capabilities, underpinning our strategy to grow ahead of our end
markets.

Looking ahead into 2013, despite more challenging markets, the Group will
continue to deliver profitable growth through new product introductions and a
range of operational initiatives. Assuming a gradual economic and end market
improvement, we expect to deliver low single digit revenue growth and broadly
stable margins in 2013 with lower first half profits offset by growth in the
second half. Alongside substantially higher cash generation, the Group plans the
eighth consecutive year of double digit dividend growth."

[hernando2] 27/2/2013 07:05

Results seem good....

[broadwood] 26/2/2013 16:39

Managed to eke out a small gain. Sentiment seems pretty positive towards the shares - after all the shale operations are minimal.

We'll find out tomorrow.

[phil140158] 26/2/2013 12:26

Volume traded is very low (180,000 @ 12.30pm). No whispers about the results tomorrow. Hold onto your hats!

[phil140158] 25/2/2013 20:54

Can't see it holding above 2200 before the results, tgom. Thereafter - we shall see!!. I would be tempted to sell at 2230 if it did go that high, otherwise, I'm holding for the results.

[thegameofmoney] 25/2/2013 19:59

2230-2240 by Wednesday!! :)

[broadwood] 25/2/2013 06:47

bbd - yep, I was just about to post that article. Lets hope they continue to burn.

[phil140158] 24/2/2013 08:22

TGOM - food for thought in the last two posts from APAD and bigbigdave. Both present very plausible arguments, but support completely opposite points of view and outcomes for the share price!

If profits exceed £408m and current trading and prospects for 2013 are better than expected (no sign of the 'caution/cautious' word) then the share price could rise sharply.

edit: There are 212 million Weir Group shares. Imagine what would happen to the share price if all the shorted shares ( 15% of the total is 31 million!) were bought back at the same time!

On the other hand we might see a repeat of what happened to Aggreko!

[bigbigdave] 24/2/2013 07:19

Inside the City: Short-sellers fail to frack Weir shares

SPARE a moment for the short-sellers, those dastardly investors who make hay when a company's shares tank.

They are having a bad run at Weir Group. The £4.7bn supplier of kit to miners and oil drillers is the most "shorted" stock in the FTSE 100. About 15% of its shares are out on loan.

Short-sellers borrow stock from other shareholders and then immediately sell it. They do so on the agreement that they will return them to the original owner by a certain date.

SPARE a moment for the short-sellers, those dastardly investors who make hay when a company's shares tank.

They are having a bad run at Weir Group. The £4.7bn supplier of kit to miners and oil drillers is the most "shorted" stock in the FTSE 100. About 15% of its shares are out on loan.

Short-sellers borrow stock from other shareholders and then immediately sell it. They do so on the agreement that they will return them to the original owner by a certain date.
The company has benefited handsomely from fracking, a gas-drilling method that uses high-pressure water and chemicals to blast apart underground rock formations. Tens of thousands of such wells are being drilled every year in America. Weir has a 50% share of the market for the pumps used in the process.

The resulting deluge of gas, however, has led to a collapse in the commodity price - and the fortunes of many of the companies in the industry. And that has excited the short-sellers.

It is important to bear in mind, though, that shale equipment is a small, albeit lucrative, part of Weir's empire. It is a division of a division of a division. It acccounts for about a tenth of the oil and gas arm's business, which, in turn, makes up about 40% of group profits.

Expect a strong showing on Wednesday when Keith Cochrane, the chief executive, reveals annual results. City scribblers expect £408m in pre-tax profit, a 4% increase over last year's performance.

The short-sellers won't be pleased.

[thegameofmoney] 23/2/2013 14:20

Thanks Apad interesting points.Tgom

[apad] 23/2/2013 09:02

tgm

1. Only a few job vacancies in Middle East.
2. Acquisition costs and debt mean not much for shareholder divy increase (10% increase on not very much is not very much).
3. Strong run up to results invites short term profit taking.
4. The current market punishes results in-line with expectations (which is what I expect).

This is predicated on my knowing nothing about the share on loan issue.

apad

[thegameofmoney] 22/2/2013 19:19

Hi APADI am interested to know why you think the share price will fall on results. Half year results for your reference. :) Results for 26 weeks 29 June 2012 1 July 2011 Continuing Operations Order input(*1) GBP1,312m GBP1,220m +8% Revenue GBP1,325m GBP1,031m +29% Operating profit(*2) GBP248m GBP186m +33% Operating margin(*2) 18.7% 18.0% +70pts Profit before tax(*2) GBP226m GBP178m +27% Cash from operations GBP141m GBP129m +10% Earnings per share(*2) 76.4p 60.1p +27% Reported earnings per share 69.9p 56.3p +24% Dividend per share 8.0p 7.2p +11% Return on capital employed(*3) 30.6% 28.1% +250pts Net debt GBP844m GBP673m(*4) Tgom

[apad] 22/2/2013 18:15

Well phil,
I've now decided that I am fundamentally ignorant about the proxy relationship between Shares on Loan and shorters.
It seemed to me that there was a perfectly sensible argument in favour of shorting and the share price dropped. The share price is now back up to historic levels and the Shares on Loan are only a touch lower. This, despite the aforesaid perfectly reasonable argument being less strong.
Perhaps that's why I'm a LTBH shareholder and not a trader!
It's not an "update" next week it's the final! I'd like to see the price to net operating cash flow falling. I have an eps forecast of 153 - I'd be surprised if that is reached (it would be a PER of 14).
I expect the share price to fall on the results, but the problem with having a 5% limit on holdings is that I won't be able to take advantage of it, just as I wasn't able to take advantage of the price 3months ago. Still, I have bought WEIR on 7 occasions so I ought to be pleased.
Life!
apad

[phil140158] 22/2/2013 17:32

Profit taking - tgom. People like you who have made a packet recently are taking some or all of their profits off the table. Why risk waiting to see what next week will hold?

[thegameofmoney] 22/2/2013 10:29

After all the brokers updating for the better and an update out next week, why would you sell? Doesn't make sense to me.Tgom

[major clanger] 21/2/2013 21:12

Weir upgraded by JP Morgan Cazenove:

[phil140158] 21/2/2013 20:47

I saw in the Times today that Tempus featured Weir in his Deal of the day. He described the 3 recent acquisitions and then said "The shares edged 13p higher to 2553". A typo, wishful thinking or does he know something we dont?

[thegameofmoney] 21/2/2013 20:37

Hi Phil

Thanks for that. Yeah it's ticking along nicely, bit of a dip with the market today though.