WEIR Group added more than £185 million to its market capitalisation in spite of posting a 14% dip in half-year profits.

The Glasgow engineering giant saw its revenue slide 10% from £1.325 billion to just short of £1.2bn between January and June this year.

The drop was mainly due to a 24% fall in its oil and gas division which fell back from £503m to £381m although Weir has indicated it does not expect any further "deterioration" there during the rest of the year with prospects in fracking said to be improving.

Pre-tax profits, excluding exceptional items and amortisation, for the six months were at £193m, down from £225m in the comparable period of 2012.

But the market reacted positively to the announcements sending Weir's shares up 87p, or 4%, to 2164p giving it a market capitalisation of more than £4.6bn.

Investec up its rating on the stock from hold to buy saying indicators for better profitability in the second half of the year were "credible".

The broker added: "In the longer term we believe the group remains well positioned in attractive end markets with an increasing installed base."

Weir's chief executive Keith Cochrane said the company had produced a "good set of numbers" in a tricky trading period.

He said: "The results emphasise the product range and geography we have is helping us to perform in despite challenging market conditions."

Delays in a number of major mining projects plus over supply in the US fracking market contributed to the lower profits.

Mr Cochrane said many mining companies were constraining capital spending with a trend towards expanding at existing brownfield sites rather than starting production at new greenfield locations.

A 40% dip in the number of North American gas rigs – taking them to 15-year lows – during the period hit the oil and gas division.

Lower sales of pressure pumping equipment were offset by a first contribution from fracking pressure control product manufacturer Mathena, bought by Weir in December for £237m, and improvement in aftermarket and maintenance revenues.

Mr Cochrane said there are signs fracking – in which a mixture of water, sand and some chemicals is pumped into a well under high pressure to force hydrocarbons from the rock – is beginning to gain more traction around the world particularly in China, Russia, Australia and the Middle East.

He said: "It is still quite small beer but we can see it growing to be quite significant over the next few years."

Mr Cochrane is also encouraged by recent developments, which include generous tax breaks for operations, in getting a UK fracking industry started.

He said: "The UK has a very interesting opportunity [in shale gas] and it is one we would keen to see happen.

"In terms of jobs, revenue and energy dependency it makes sense for the UK to invest in its own resources.

"The framework which [the government has put in place] is a positive measure."

Revenue in Weir's power and industrial division was up 1% from £157m to £158m which the company said had been helped by nuclear maintenance contracts in the US and UK and new build activity in gas turbines in North America.

Net debt widened to £950m, from £689m at the end of December last year, with Weir citing the £214m it spent on acquisitions during the period.

Mr Cochrane added he was glad information regarding the Scottish independence referendum was beginning to filter through but is still hopeful of more clarity in the months ahead.

He said: "There have been some interesting papers from the UK government over the past few months which have been informative on some of the consequences and questions. We now need to see the Scottish government white paper."