Weir announces £50 million share buy-back |
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Published
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Tue, 22 Mar 2005 01:00
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Weir, the Glasgow based engineer group declared a £50 million share buy-back yesterday, following a 3 per cent increase in its annual profits.
The CEO of Weir, Mark Selway explained that the buy-back decision had been taken since no significant acquisitions were underway. He went on further to say that though Weir had perceived of an opportunity for large-scale consolidation a couple years ago considering its excess capacity, nothing of that sort had happened in spite of the amounts offered for acquisitions being quite appealing. Justifying the move, Selway said that the company was not acting in haste and did not want to take any rash acquisition decisions based on a short term.
| Weir’s shares closed up 6.25p or 1.9 per cent at 331.25p with the news on the share buyback along with the announcement of a rise in underlying pre-tax full-year profits to £58.3m, compared with £56.7m in 2003, and a 3.2 per cent rise in the dividend to 12.8p from 12.4p.
As most buy-backs do, Weir sees this one too resulting in an increase in the earnings per share by reducing the number of shares in circulation. This would benefit the shareholders and would also prove instrumental for effective capital structuring of the company.
Reports also show Weir’s order input leap to 23.4 per cent from £793.4m last year to £876m, with America recording 33 per cent increase in growth, Europe and the former Soviet Union showing 20 per cent increase and Indonesia reporting an 89 per cent increase.
If a division-wise profit evaluation is done, Weir’s engineering products saw operating profit decrease 7.6 per cent to £30.9m against the powerful performance from minerals which seemed to balance the poor performance from pumps.
Even though engineering services profit margins slipped back to 10.3 per cent from 10.9 percent, the profit was seen to advance from £500,000 to £20.5m. Furthermore, Weir’s Techna division was also seen recording high profits of about £3.4 million from £800,000 during the past year.
A terrific market for Weir’s engineering products and services existed in Russia’s power, oil and mining sector, according to Selway. India could also make some business with Weir’s minerals and services.
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