GLASGOW-based Weir Group has signalled its confidence in delivering further growth in 2024 as it reported a 23% rise in pre-tax profits to £321 million last year, driven by strong demand from the global mining sector.

The engineering giant took advantage of positive conditions in mining markets which saw its customers strive to capitalise on supportive commodity prices, helping it to boost margins.

The company underlined the benefit it is seeing from the strong demand for metals such as copper amid the drive to net zero, and flagged the impact of its investment in new technology and new cost efficiency drive.

And Weir said it has started 2024 with a strong order book, with conditions continuing to be supportive in its mining markets. It is targeting further margin expansion this year.

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Chief executive Jon Stanton told The Herald: “We are continuing to deliver on our promises, we are continuing to benefit from the focus that we now have, and as a mining technology leader we are benefiting from strong and active markets in mining, but also from all the work that we have been doing on broader strategic growth initiatives to accelerate that growth.

“When I look at the year with 9% revenue growth, 18% growth in operating profits, strong cash generation, [the] balance sheet in great shape, [and] margin improvement to 17.4%, which is ahead of the target that we set out, I feel it is a really, really strong set of numbers. [I am] very happy with the progress that we have made, and we are going to continue delivering that in 2024.

“Our market environment remains strong, we are getting traction with the technology which will drive incremental growth, and we will continue along with the Performance Excellence initiatives to improve our business, making it more efficient.”

Weir has in recent times routinely highlighted its strength as a “pure-play” supplier of mining technology which can take advantage of long-term demand for metals that are required for the energy transition and the move towards electrification. It has also positioned itself to demand for more energy and water-efficient mining equipment.

The company employs around 12,000 people and operates in more than 60 countries.

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Revenue climbed by 9% last year to £2.64 billion despite a 3% fall in original equipment (OE) orders. Mr Stanton explained the fall in OE orders reflected a tough comparison with the prior year, when it secured £33m of orders from nickel miners in Indonesia. After-market orders were “stable” over the period.

Mr Stanton noted that Weir was progressing well towards a target to lift its operating margin to 20% in 2026, which it set out in December. It forecasts achieving the ambition by “operating leverage from growth” and realising £60m of cost savings in 2026.

Weir expects to make £20m of savings from each of three focus areas: capacity optimisation, including footprint rationalisation; making its manufacturing leaner to reduce waste; and the shift to Weir Business Services, which involves moving from an in-country to a global shared services model, supported by a third-party provider.

Mr Stanton added: “So much of what we need to do over the next few years is within our control. We have got a very clear line of sight, [and] actionable plans in place. It is an uncertain world at the moment for sure, you never know what’s going to be around the corner. We have learned that over the last three years. What we have continued to do at Weir is to really build our resilience, our ability and agility to be able to respond to whatever comes down the track. We have got a very clear track record now of being able to do that.”

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Meanwhile, asked whether the recent Red Sea shipping attacks had affected the company, Mr Stanton said Weir has had some exposure to the issue, but he declared it was “not a big issue”.

He said: “We do have some seaborne freight that has historically gone through the Red Sea, which now has to go round the Cape [of Good Hope]. That is probably adding a couple of weeks to our lead time, for example, and freight costs have gone up slightly, but the impact is nothing compared to the supply chain challenges and inflation that we saw as we came out of the pandemic. It is having a very modest affect on us at the moment which we are taking in our stride.

“The thing to think about with Weir is that we are very focused now on mining technology and this industry, but we are incredibly diversified in terms of our commodity and geographic exposure. It is complicated world. There is always something going on somewhere that we have to deal with, but generally speaking we are incredibly resilient, and we do a great job in dealing with these challenges as they pop up here and there.”

Weir said Sir Jim McDonald, principal and vice-chancellor of the University of Strathclyde, will step down from the board following its annual meeting in April, when he completes his full nine-year term. Brian Puffer officially join as chief financial officer today (March 1).

Andy Agg was appointed to the board as a non-executive director on February 27, while Srinivasan Venkatakrishnan will step down as a non-executive director on March 31.

Shares closed down 2.3%, or 43.5p, at 1,833p.