LONDON (ShareCast) - (Sharecast News) - Engineering group Weir on Wednesday posted a rise in annual profits on the back of a booming mining industry, sparking a surge in the stock.
The company said pre-tax profits for 2022 rose by 24% to £260m. Revenue was up 28% to £2.47bn as orders surged 14% to £2.64bn.

Shareholders were rewarded with a 38% rise in the annual dividend to 32.8p a share. Growth was driven in part by a strong second half and final quarter, with orders rising 8% in the final three months of the year.

"Throughout the year, conditions in mining markets were highly favourable. Across most key commodities, market prices were significantly above miners' cost to produce and end market demand was high. This was particularly the case for energy transition metals, such as copper, as physical inventory levels tightened through the year," the company said.

"With large greenfield expansion projects slow to convert, miners met demand by accelerating production from existing assets and by developing harder and more complex ore deposits. This, coupled with a growing installed base and the effects of declining ore grades, drove record demand for our aftermarket spares and expendables."

"In original equipment, we won market share as miners ordered Weir solutions to debottleneck and improve the efficiency of existing assets."

Weir said its longer-term prospects were underpinned by decarbonsiation efforts and the transition to sustainable mining, and added that it was on track to achieve its target of 17% operating margin this year, as well as revenue and profit growth.

Analysts at Shore Capital rated the stock a 'buy', adding that "population growth, the convergence of living standards, urbanisation, ore grade decline (more materials need to be processed to extract the same amount of metals/minerals) and the demand for metals/battery metals to support the global clean energy transition/decarbonisation all point in Weir's favour".

Reporting by Frank Prenesti for Sharecast.com

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