Weir Share Discussion Threads

[broadwood] 12/10/2009 09:48

Nice Broker upgrade this morning - t.p 810p!

[henryatkin] 17/9/2009 12:10

Broadwood .... Weir markets have changed for the better in so far as they now put a lot of enthasis on after sales support and maintenance which is a good earner whatever the economy. In fact as some firms cut back on their own maintenance staff it makes better oportunities for Weir support teams. Also a lot of Weir pumps & Hopkinson valves are far more technically advanced than they were back in the seventies so specialist support is expected by the customer. I also think that todays managers are far more savvy as to economic cycles and coping with its impact.

[broadwood] 16/9/2009 23:23

James - was just reading that when you posted.C.E's departure not too serious - according to Tempus.

henry - hopefully the markets they serve are very different now.

[henryatkin] 16/9/2009 17:30

Broadwood ... yep, I don't expect the market to take any notice of me. Just offering an opinion. I see a lot of similarities between now and the seventies. I don't believe we are into a long slow bull market for the next ten years - just as I didn't believe Weir was a rubbish company in 2008 just because its share price was falling. I'm simply trying to do a bit of crystal ball work based on what history can tell us. Sulzers got into trouble two years after the bottom of the recession back in the seventies so we just need to keep a close on what is going to happen to turnover in 2011. In the mean time lets hope for 722:-)

[broadwood] 15/9/2009 09:59

henry - good post but it seems the market thinks we have already gone through that phase?

Anyhow, nice upgrade from heavyweight Goldmans this morning. Target 722p.

Seems to be helping a good deal.

[henryatkin] 12/9/2009 09:16

I wonder if the share price isn't running ahead of itself & here are my concerns. I spent 35 years as an Engineer/Manager in the electricity supply industry and running my own Engineering company prior to retiring. I used Weir and Hopkinsons on a regular basis throughout that time. My spend budget was divided into capital and revenue. For those new to company budgeting revenue spend is tax deductable where as capital spend is non tax deductable - both are defined by HMRC. The revenue budget is for spare parts and maintenance - that spend is constant throughout the economic cycle. The capital budget is for new major items of plant such as as a complete spare pump or valve. Weir management have rightly diverse risk by building a strong after sales repair & maintenance division but are still exposed to a high level sales of capital equipment. Now if you look at almost any listed company announcement recently you will see that the report will focus on reducing debt. That is always the case in a downturn. Slashing the capital budget is the first target in controlling debt and strengthening the balance sheet. This would not hit Weir immediately because capital budgets are set in the previous year. So Companies would have ordered major plant in 2007 for delivery and payment in 2008. In 2008/9 they would not be ordering so strongly for delivery/payment in 2009/10. This reflected in broker forecasts for year end 2010 where Weirs earnings per share fall 20% form 2009 figurures. What happens after 2010 is anybodies guess. Brokers are forcasting a rise back up to 2009 levels. In my experience it is very unlikely that companies will be increasing capital spending so quickly. In the 1970's the squeeze on capital spending took years to recover so imo Weir earnings could stay flat for a few years. It was during this capital spending downturn of the seventies that Sulzer Pumps went bust but for a last minute rescue by the Swiss government. I still rate Weir as a first class engineering company but make no mistake that they are facing difficlt times and at 45p EPS next year & possibley for some time after that they seem fully valued to me 15xEPS .

[broadwood] 10/9/2009 09:22

It seems we're running again.

As to why? Chairman seems pretty positive to me within the bounds of the usual caution;

The Chairman of the Weir Group, Lord Smith of Kelvin, commented: "Despite the
economic uncertainties in the first half of 2009, the Group increased revenue,
profit and earnings per share compared to the prior year period and achieved a
significant reduction in net debt through excellent cash generation.


The Group's sector leading performance in the period clearly demonstrates the
resilience of our operating model and is testament to the effectiveness of the
Group's strategy to focus resources at higher growth, long cycle sectors where
significant non-discretionary aftermarket sales underpin performance.


The Group's continued strong performance, despite weaker markets, supports the
Board's confidence in achieving the upper end of previously given management
guidance3 for the full year for profit before tax, intangibles amortisation and
exceptional items."

Not new news but reassuring all the same.

[broadwood] 09/9/2009 14:31

Evidenced today. No stopping it now.

[chrisb1103] 02/9/2009 20:39

Agree with all, definitely holding on for more upside imho, any recent retrace should only provide a buying opportunity for many, (including myself most probably). For any not readily familiar with the resilience of this star performer...... Headlines 4th Aug Interims on 4/08/09:

Turnover jumped 12 per cent to £709.8million with pre-tax profits up by the same percentage to £91.4m (from £81.1m)

The company generated GBP123.9 million cash from operations, up GBP59.6 million on last year's figure. As a result, net debt fell to GBP200 million from GBP261.7 million.

Analysts forecast full-year pretax profit to come between GBP140 million and GBP169.1 million. (likely upper end)

It increased its dividend by 3% to 4.80 pence, payable from earnings per share of 28.4p.

A solid performer indeed tratante!

[tratante] 04/8/2009 16:05

a solid performer, definitely one for the long term as their ability to weather the recent storm demonstrates. Good luck.

[win2003] 04/8/2009 14:56

I agree, tratante en acciones. On the basis that 700 to 800p/share was a reasonable valuation for a significant period before the recent unpleasantness, it should be attainable again in the medium term, IMHO, considering the business WEIR are in. Sure, it won't go up in a straight line!

[tratante] 04/8/2009 14:32

I agree, but think it might take a breather and drop back a bit first.

[win2003] 04/8/2009 13:34

...and they are, more upside here, IMHO

[tratante] 03/8/2009 16:14

judging by today's rise someone expects them to be good!

[rusty steele] 03/8/2009 13:07

anyone any views on the interims tomorrow?

[scottishfield] 25/6/2009 22:52

tratante, yes indeed, however as it happened, I invested recently in chg, so 'still not in' ! good luck anyway

[tratante] 25/6/2009 21:45

Many thanks for posting this useful info Chris.

[chrisb1103] 25/6/2009 21:16

interim results 4th august. this is worth noting:



The range of market expectations for 2009 [earnings] is a wide one-between £140 million and £169 million. But, even at the lower end of that range, earnings per share would still come out at around 47 pence, leaving the shares selling for under 11x earnings. That is not a very demanding rating for a company with a terrific profit record.

Weir has a strong balance sheet with net debt of just £240 million and total credit facilities of £625 million, which do not expire for another two years. Last year's dividend was lifted 12% and the shares currently yield 3.6%. Even on a worst-case scenario for 2009 earnings, the dividend would be two and a half times covered.

[tratante] 25/6/2009 13:30

Could be October, there was one then in 2008. Last one came out in May this year around time of AGM.

[lucky_lady] 25/6/2009 12:46

Anyone know when the next trading statement is due?

[tratante] 23/6/2009 18:38

now could be a good time to stop wishing...

[scottishfield] 27/5/2009 14:38

still not in & still wishing I was..

[rusty steele] 13/5/2009 12:56

Anydody any thoughts on today's statement?

[jugears] 12/5/2009 12:30

I'm still in for the long run.