THE ONGOING recovery in the oil and gas and mining sectors has had a knock-on positive effect on Glasgow-headquartered engineering business Weir Group, which has reported an increase in both revenue and profits for the first half of the year.

Over the six months to the end of June the FTSE 250 business saw turnover from continuing operations rise by 15 per cent to £1.1 billion while pre-tax profits were up by 38% to £143 million.

Chief executive Jon Stanton said the firm had achieved the results on the back of favourable market conditions.

“That resulted in each of the divisions that we had in our portfolio in the first half of the year delivering double-digit growth,” he said.

“We’re taking full advantage of the opportunities that our markets are presenting and by any measure we are outperforming our key markets.”

The firm’s minerals division, which makes and operates equipment used in the mining sector, saw revenues and operating profits both rise by 7% during the period, to £651m and £112m respectively.

Mr Stanton said the arm had been a beneficiary not just of rising commodities prices but also of the fact that mining companies themselves had not invested in their businesses during the period when prices were depressed.

“Our integrated solutions strategy is about helping clients who haven’t invested a lot of capex in recent years,” he said.

“We’ve got lots of boots on the ground in mines around the world to help improve production and take advantage of strong commodities prices at the moment.”

The division is expected to continue to do well, with orders at the end of the first half sitting 12% higher than at the same point last year at £728m.

Though smaller than the minerals division, Weir's oil and gas arm experienced stronger growth during the period under review, with revenues rising by 31% to £411m. Operating profits in the division almost doubled, from £32m to £63m.

Mr Stanton said this was as a result of oil prices stabilising at a level that is “comfortably above exploration and production investment incentive levels” while an increase in fracking activity led to greater demand for Weir’s technology.

As with the minerals division, oil and gas ended the six months with an increase in its order book, with the figure sitting 35% up at £438m.

As Weir is planning to sell its flow control business, which manufactures, supplies and supports equipment that is used in the global power sector, it did not include its performance in its overall results, but noted that revenues from the division remained constant at £161m.

Mr Stanton said the firm would begin the process of finding a buyer for that part of the business towards the end of the third quarter.

“We announced the sale in April and since then we’ve been working on separating the business from the group,” he said.

“There’s a bit of complexity to go through so we can offer a clean package to buyers.

“We’ve had a lot of calls [from potential buyers] because we announced the sale publicly.

“We’re going to formally launch the process and will go out towards the end of Q3 with a clean set of books.”

Mr Stanton noted of Weir’s $1.3bn acquisition of American tools business ESCO Corporation, which closed last month, that “everything we thought about the business has been reaffirmed".

The acquisition has resulted in Weir’s headcount rising from 15,000 globally to 18,000. While the firm had cut thousands of jobs in the wake of the downturn in its key markets, Mr Stanton said headcount had risen by around 1,000 prior to the ESCO deal going live.

Shares in Weir closed 1.5% down at 1948.5p yesterday.

Mr Stanton said he was focused on “building a strong share price” over the long term.