Interim Results
Weir Group PLC
25 August 2004
25 August 2004
THE WEIR GROUP PLC
INTERIM RESULTS 2004
'BUILDING THE FOUNDATIONS FOR SUSTAINABLE GROWTH'
Results for 26 weeks ended 25 June 2004 (unaudited)
Group Results
2004 2003 Change
Order Input (1) £451.6m £360.0m +25.4%
Turnover £392.4m £393.7m -0.3%
Operating Profit (2) £25.5m £26.7m -4.5%
Pre-tax Profit (2) £24.6m £23.6m +4.2%
Earnings per share (2) 9.1p 8.9p +2.2%
Dividend 3.45p 3.35p +3.0%
1 Excluding joint ventures and associates; calculated at constant 2004
exchange rates
2 Excluding goodwill amortisation
HIGHLIGHTS
•Significant increase in order input - over 25% at constant exchange rates
•Increased order input driven by new products and markets
•Improving outlook on new orders in Clear Liquid and Techna
•Strong turnover and profit growth in Engineering Services
•New product introduction programme on track
•Earnings per share up 2%; dividend up 3%
The Chairman of The Weir Group, Sir Robert Smith, commented: 'The stronger
performance from the Services, Techna and Minerals Divisions, when combined with
reduced pension charges, delivered results in line with expectations during the
first half of 2004.
The year to date performance has been shaped by the successful delivery of our
sales and marketing initiatives across the entire portfolio of our businesses,
growing first half input by 25%, at constant exchange rates, when compared to
the same period in 2003.
The benefits of the strong order book in Clear Liquid and Techna, coupled to the
continuing strong performances from Services and Minerals and the improved
pensions position of the Group, should deliver second half improvement when
compared to the same period in 2003.
Our strong balance sheet, when combined with our successful programmes for new
product and market developments and on-going operational improvements, provides
a solid platform for future growth.'
Contact details: The Weir Group PLC Available through UBS
Mark Selway, Chief Executive Tel. 020 7567 8000 (switchboard);
Helen Walker, Public Relations (Mobile: 07789 032296)
Manager
The Maitland Consultancy Tel. 020 7379 5151
Suzanne Bartch (Mobile: 07769 710 335)
General Overview
In the first six months to June 2004, turnover from continuing businesses was
£392m; marginally below the same period in the previous year due to adverse
foreign exchange translation of over £8m.
Operating profit before interest, taxation and goodwill, was £25.5m compared
with £26.7m, a decrease of £1m, due to adverse foreign exchange translation
effects of £0.6m and a new charge for share based payments of £0.4m. Pre-tax
profit at £24.6m was 4.2% above 2003 (£23.6m) due to the beneficial effects of
reduced pension finance charges.
In Minerals, we continued to build on our strengthening market position, growing
our turnover and profits while further progressing our efficiency and
productivity goals. Commodity markets continued to be buoyant and the award of
large contract work in China reflects our targeting of new, high growth markets.
As indicated in March, the Clear Liquid Division's lower first half input in
2003 was expected to deliver a comparatively softer first half sales performance
in 2004 against the same period in 2003. Notwithstanding this expectation, the
continuing operational improvements and ongoing product investment has resulted
in a significantly increased level of orders booked in the first half of 2004.
The Valves & Controls Division performed below expectations with the UK failing
to deliver the anticipated productivity improvements and supply chain concerns
in the United States. However the product development strategy continues to
progress well, delivering further new power orders in Asia.
The Services Division significantly increased both turnover and operating
profits when compared to the same period in 2003. Input at £103m was
particularly encouraging given the strength of the first half of last year.
In Techna, the new project work secured in the first half of 2003 and improved
performance from the defence business delivered a 12% increase in turnover and a
growth in profits when compared to 2003. These projects are progressing and our
preparation to deliver the second half profit-taking milestones is on track with
new orders for marine gas storage and sulphate removal packages supporting our
confidence for the future.
Weir's share of turnover from our Joint Ventures and Associates was £54.0m, 6.3%
above 2003. Operating profit at £4.4m translated to an 8.1% margin against 10.4%
in 2003. The first half of 2003 benefited from favourable profit-taking
milestones on major projects at DML. In 2004, the profit contribution is
expected to be more second-half biased.
Order input for Group subsidiaries in the first half of 2004 was £451.6m, 25.4%
above the same period in 2003. Strong performances were achieved across Clear,
Minerals, Valves and Techna with Services maintaining the high level of input
achieved in the first half of 2003. The current level of enquiries supports an
equally strong second-half to the year.
Financial Highlights
Group turnover fell marginally to £392.4m (2003: £393.7m), with stronger
performances in Engineering Services, Techna and Joint Ventures and Associates
being offset by a decline in Engineering Products and adverse foreign exchange
translation effects.
Operating profit, excluding goodwill amortisation, at £25.5m (2003: £26.7m) was
4.5% below 2003 with Group subsidiaries at £21.1m (2003: £21.4m) due to adverse
foreign exchange translation effects of £0.6m and a first time charge for share
based payments of £0.4m. Our Joint Ventures and Associate companies contributed
£4.4m against £5.3m in 2003.
Group pretax profit, excluding goodwill amortisation, was up 4.2% on the
previous year at £24.6m (2003: £23.6m) and included the benefits of our
improving pension finance position.
A tax charge of £5.9m (2003: £5.4m) gives an effective tax rate of 24.0%. The
resulting earnings per share, excluding goodwill amortisation, were 9.1p, 2.2%
above the first half of 2003.
The Group's net debt at the half year was £23.2m rising from £0.5m net funds
position at the year end. The first half outflow of £23.7m includes £18.6m for
the final dividend payment and an additional £10.0m contribution to the UK
pension funds.
Dividend
An interim dividend of 3.45p (2003: 3.35p) is declared. The interim dividend
will be paid on 12 November 2004 to shareholders on the register at close of
business on 15 October 2004.
Review of Results
Engineering Products
Our Engineering Products' sector includes the operations of our Minerals, Clear
Liquid and Valves & Controls Divisions. Turnover was 3.1% below 2003 at £204.5m
(2003: £211.0m) and operating profit decreased 17.4% to £13.6m (2003: £16.4m).
The Minerals Division had an excellent first half, growing its order input 15.6%
to £125.8m (2003: £108.9m). The business continues to make good progress in
accelerating its organic growth and increasing market share, particularly in the
Far East, through the development of excellent new products, penetration of new
markets and global offering of the existing portfolio. In particular, Minerals'
Netherlands operation saw large contract wins for the alumina industry in China.
In North America, a renewed investment climate in mining and a positive
reception to our sales and distribution initiatives have resulted in increased
orders.
The Clear Liquid Division delivered a 25.8% increase in order input to £82.8m
(2003: £65.9m) due to a combination of improving markets in European oil,
Chinese power and North American water treatment and a positive reception to our
new API and industrial products including the Uniglide and Rotojet VSR pumps.
The effects of the soft first half 2003 input resulted in a £13.9m decline in
the first half 2004 turnover when compared to 2003. While first half profits
were influenced by the reduced turnover we remain well positioned to deliver a
comparatively stronger second half performance.
The first half results for the Valves & Controls Division were mixed with input
growing 16.2% to £32.7m (2003: £28.2m). Turnover was broadly in line with 2003
but execution issues on projects in the UK and supply chain issues in the United
States produced an approximate £3m profit decline when compared to 2003.
Additional Group support has been provided to ensure that the scheduled output
is achieved and we expect to deliver a significantly improved second half. The
Division's product development strategy continued to plan and new power orders
in Asia are a direct result of investment in new products and re-engineering of
the existing portfolio.
Engineering Services
Turnover from the Services Division was £93.5m (2003: £87.5m) and produced a 28%
increase in operating profit to £9.5m against £7.4m in the first half of 2003.
At the operating profit level, the margin was 10.2% against 8.5% in 2003.
The Services Division delivered a 1.5% increase in input to £103.2m (2003:
£101.6m). The Australian services operation performed particularly well, growing
input by 34%. UK power orders were down on 2003 which was not unexpected
considering the high value of hydro refurbishment work booked last year.
Despite difficult market conditions, our Canadian service and distribution
businesses delivered robust margin and profit growth offsetting the total costs
of start up of our new United States service centres. The Canadian business also
acted as a shop window for distribution of the Group's products in Canada.
Minerals' first order for the developing Canadian Oil Sands was a direct result
of this inter-divisional collaboration.
During the balance of 2004, we will continue our strategy of expansion in North
America, the Middle East and Asia while pressing ahead with new products and
facility investments. The costs of establishing these new growth initiatives
will impact on margin performance for the balance of 2004.
Techna Division
Our Techna Division includes those businesses involved in the design and project
management of large-scale projects.
Turnover from our Techna Division increased 12.2% to £40.4m (2003: £36.0m) and
produced a first half profit of £0.4m against a loss of £1.3m in 2003.
The desalination and water treatment business delivered a significant increase
in input, when compared to the same period in 2003, to £84.0m (2003: £32.4m).
Turnover at £21.2m was 15.8% above the first half of 2003. Our new sulphate
removal technology and ongoing success with Weir LGE, our gas storage business,
provide a strong platform for the future. Significant orders in the oil sector
were a result of our investment in water injection technologies and the division
is also moving into new markets with their first desalination programme in
China. The increased level of overhead in the first half to assist in
achievement of key project milestones in the second half of this year resulted
in only marginal profit improvement when compared to the same period as 2003.
The defence and nuclear operations order input for the first half of 2004 was
£23.0m (2003: £23.1m). Turnover at £19.2m was 8.3% above 2003 producing a first
half profit improvement when compared to 2003.
Joint Ventures and Associates
Weir's share of turnover from Joint Ventures and Associates at £54.0m was 6.3%
above 2003 (2003: £50.8m). Operating profit of £4.4m (2003: £5.3m) produced an
operating margin of 8.1% (2003: 10.4%). The decline was due in part to the
favourable profit taking profile of DML in 2003 and to the reduction in North
Sea drilling activity which affected Weir Houston.
In the second half, we expect the performance of the trading activities to be at
a similar level to that achieved in 2003, but with a modest additional expense
for the development activities of the renewables Joint Venture.
The Board
Ian Boyd retires from the Board on 31 August 2004 after more than 35 years with
the Group, 23 years as Finance Director. His personal dedication, professional
experience and insight during his long association with the Group have been
invaluable. Chris Rickard, who joined the Group in January 2004, succeeds as
Group Finance Director.
Strategy
Our actions to unlock our organic potential delivered a good level of input
growth across all divisions through the continuing development of new products
along with increased market penetration helped by an improving economic climate.
During the first half of 2004, our successes across a large number of key
operational, financial and health and safety activities reinforced our core
belief that operational improvements provide the best short-term potential to
deliver earnings and competitive improvements for the Group.
Our expansion into strategically important markets made progress in the Services
Division, completing its phase one entry into the United States and a Joint
Venture formed in Malaysia.
We continue to monitor closely acquisition opportunities and explore avenues for
accelerated growth but remain firm in our requirement for value enhancing
benefits. Our recently implemented £300m committed bank facility further
strengthens our position but, as previously stated, we will only acquire
businesses which are compatible technically, geographically, structurally and
financially and where there is a clear opportunity to create value for our
shareholders.
Outlook
The solid first half trading performance and significant increase in order input
leaves the Group in a strong position at the half year.
Within the Engineering Products sector, the Minerals Division continues to have
strong momentum behind its productivity programme and the combination of new
product launches and buoyant commodity markets should deliver further
improvement in the balance of 2004.
The Clear Liquid Division is expected to deliver a stronger second half
performance in 2004 based on work secured in the second half of 2003. The
strengthening order book should underpin further progress into 2005.
The Valves & Controls Division performed below expectations in the first half of
2004 when compared with 2003. We have responded with a number of personnel
changes and additional support from the Group and expect the second half of the
year to show progress against the same period last year.
In the Services Division, market conditions remain strong across all our
business areas, but the combination of the favourable 2003 profit profile, cost
of our United States green fields and development of new higher growth markets,
will hold back margin growth and deliver profits broadly the same as 2003 in the
second half of the year.
In the Techna Division, we expect turnover and profit to improve when compared
to 2003 as a number of our recent project awards achieve forecast profit-taking
milestones. While there always remains some risk of unforeseen project delays, a
good level of progress has been made on our project work in the first half of
the year.
In the second half, we expect performance from our Joint Ventures and
Associates' businesses to return a broadly similar level as experienced in the
second half of 2003.
The second half results will reflect reduced pension costs of approximately
£1.5m against the same period in 2003.
The improvement in our order input and anticipated growth in second half sales
are expected to deliver a stronger second half to 2004 when compared to the same
period in 2003.
* * * * * * * * * * * * * *
Consolidated Profit & Loss Account
26 weeks to 25 June 2004 26 weeks to 27 June 2003
52 weeks to 26 Before Amortisation Before Amortisation of
Dec 2003 amortisation of of goodwill & amortisation of goodwill &
goodwill & exceptional goodwill & exceptional
exceptional items exceptional items
items Total items Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
----- ----------------- ------ ------- ------- ------- ------- -------
Turnover
690,718 Group 338,392 - 338,392 342,857 - 342,857
9,211 Share of - joint ventures 4,543 - 4,543 4,459 - 4,459
93,488 - associates 49,463 - 49,463 46,365 - 46,365
----- ----------------- ------ ------- ------- ------- ------- -------
793,417 392,398 - 392,398 393,681 - 393,681
----- ----------------- ------ ------- ------- ------- ------- -------
Operating profit
53,234 Group - before 21,086 - 21,086 21,406 - 21,406
goodwill amortisation
(6,927) - goodwill amortisation - (3,522) (3,522) - (3,393) (3,393)
----- ----------------- ------ ------- ------- ------- ------- -------
46,307 21,086 (3,522) 17,564 21,406 (3,393) 18,013
1,662 Share of - joint ventures 480 - 480 826 - 826
8,628 - associates 3,920 - 3,920 4,462 - 4,462
(183) - associate's goodwill - (134) (134) - (92) (92)
amortisation
----- ----------------- ------ ------- ------- ------- ------- -------
56,414 25,486 (3,656) 21,830 26,694 (3,485) 23,209
----- ----------------- ------ ------- ------- ------- ------- -------
1,663 Exceptional items - - - - - -
Interest & other income
(3,534) Group - net interest (1,258) - (1,258) (1,431) - (1,431)
& other income
(2,969) - other finance income 506 - 506 (1,488) - (1,488)
43 Joint ventures 19 - 19 25 - 25
(364) Associates (134) - (134) (184) - (184)
----- ----------------- ------ ------- ------- ------- ------- -------
(6,824) (867) - (867) (3,078) - (3,078)
----- ----------------- ------ ------- ------- ------- ------- -------
51,253 Profit on ordinary 24,619 (3,656) 20,963 23,616 (3,485) 20,131
activities before tax
8,355 Estimated tax on profit on 5,910 (38) 5,872 5,431 - 5,431
ordinary activities
----- ------------------- ------ ------- ------- ------- ------- -------
42,898 Profit on ordinary 18,709 (3,618) 15,091 18,185 (3,485) 14,700
activities after tax
14 Minority interest 3 - 3 31 - 31
----- ----------------- ------ ------- ------- ------- ------- -------
42,884 Profit attributable to The 18,706 (3,618) 15,088 18,154 (3,485) 14,669
Weir Group PLC
----- ----------------- ------ ------- ------- ------- ------- -------
21.0p Earnings per share 7.4p 7.2p
Earnings per share excluding goodwill
21.4p amortisation & exceptional items 9.1p 8.9p
21.0p Diluted earnings per share 7.3p 7.2p
Segmental Analysis
Turnover and profit on ordinary activities before tax were
contributed as follows:
26 weeks to 26 weeks to 52 weeks to 26 weeks to 26 weeks to 52 weeks to
25 June '04 27 June '03 26 Dec '03 25 June '04 27 June '03 26 Dec '03
Turnover Turnover Turnover Profit Profit Profit
£'000 £'000 £'000 £'000 £'000 £'000
--------------------- ------- ------- ------- ------- ------- -------
Engineering Products
Group 204,542 211,037 415,210 13,575 16,425 33,449
Share of associate 1 7 8 - (1) 2
--------------------- ------- ------- ------- ------- ------- -------
204,543 211,044 415,218 13,575 16,424 33,451
--------------------- ------- ------- ------- ------- ------- -------
Techna
Group 40,386 35,982 72,694 382 (1,319) 776
Share of joint venture 130 228 361 15 9 5
--------------------- ------- ------- ------- ------- ------- -------
40,516 36,210 73,055 397 (1,310) 781
--------------------- ------- ------- ------- ------- ------- -------
Engineering Services
Group 93,464 87,458 182,309 9,528 7,445 19,864
Share of joint ventures 4,413 4,231 8,850 465 817 1,657
Share of associate 49,462 46,358 93,480 3,920 4,463 8,626
--------------------- ------- ------- ------- ------- ------- -------
147,339 138,047 284,639 13,913 12,725 30,147
--------------------- ------- ------- ------- ------- ------- -------
Segmental totals
Group 338,392 334,477 670,213 23,485 22,551 54,089
Joint ventures
& associates 54,006 50,824 102,699 4,400 5,288 10,290
Goodwill amortisation
- Engineering Products - - - (3,329) (3,330) (6,659)
- Engineering Services - - - (193) (95) (214)
- Associates - - - (134) (92) (183)
Unallocated costs - - - (2,399) (1,710) (2,751)
Exchange adjustment -
Group * - 8,380 20,505 - 597 1,842
--------------------- ------- ------- ------- ------- ------- -------
392,398 393,681 793,417 21,830 23,209 56,414
Exceptional items -
Engineering
Products - - - - - 1,663
Interest &
other income - - - (867) (3,078) (6,824)
--------------------- ------- ------- ------- ------- ------- -------
392,398 393,681 793,417 20,963 20,131 51,253
--------------------- ------- ------- ------- ------- ------- -------
* For comparative purposes 2003 figures have been restated at the 25 June 2004
average exchange rates.
Dividends
52 weeks to 26 weeks to 26 weeks to
26 Dec '03 25 June '04 27 June '03
------- ------------------------------ ------- -------
On ordinary shares
12.4p pence per share 3.45p 3.35p
25,378 costing - £'000 7,111 6,842
An interim dividend of 3.45p (net) per ordinary share
(2003: 3.35p per ordinary share) will be paid on 12
November 2004 to shareholders on the register at close of
business on 15 October 2004.
Exceptional Items
52 weeks to 26 weeks to 26 weeks to
26 Dec '03 25 June '04 27 June '03
£'000 £'000 £'000
------- ------------------------------ ------- -------
1,663 Profit on disposal of land - -
------- ------------------------------ ------- -------
1,663 Non operating exceptional items - -
------- ------------------------------ ------- -------
The comparative figure for the 52 weeks to 26 December 2003
relates to the disposal of surplus land at the Manchester
site of Weir Pumps Limited which was completed on 4
December 2003.
Tax
52 weeks to 26 weeks to 26 weeks to
26 Dec '03 25 June '04 27 June '03
£'000 £'000 £'000
------- ------------------------------ ------- -------
(437) Group - United Kingdom 557 26
10,709 Group - overseas 4,091 4,214
114 Joint ventures 169 122
2,603 Associates 1,055 1,069
(4,634) UK tax - exceptional - -
------- ------------------------------ ------- -------
8,355 Tax on profit on 5,872 5,431
ordinary activities
------- ------------------------------ ------- -------
Overseas tax includes a £38,000 tax credit relating to
amortisation of goodwill as disclosed on the face of the
profit and loss account.
Basis of Preparation
The interim financial statements are unaudited and do not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985.
These statements have been prepared on the basis of the accounting policies
set out in the Group's 2003 Annual Report and Accounts and were approved by the
Board of Directors on 25 August 2004. Financial statements for the 52 weeks to
26 December 2003 are abridged statements; full accounts with an unqualified
audit report have been lodged with the Registrar.
Consolidated Balance Sheet
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- ---------------------------- ------- --------
Fixed assets
113,933 Intangible assets - goodwill 103,598 111,905
102,557 Tangible assets Investments 101,539 99,391
9,029 Joint ventures - share of 8,503 9,767
gross assets
2,724 - share of gross liabilities 3,000 3,181
------- ---------------------------- ------- --------
6,305 5,503 6,586
16,337 Associates 18,943 16,407
445 Other 468 600
------- ---------------------------- ------- --------
23,087 24,914 23,593
------- ---------------------------- ------- --------
239,577 Total fixed assets 230,051 234,889
------- ---------------------------- ------- --------
Current assets
99,671 Stocks 93,046 101,586
179,888 Debtors 196,423 197,091
117,898 Cash at bank & in hand 60,602 121,362
------- ---------------------------- ------- --------
397,457 350,071 420,039
------- ---------------------------- ------- --------
Creditors falling due within
one year
173 Bank overdrafts & short term 2,310 1,911
debt
115,065 Other borrowings 79,693 9,999
178,198 Other creditors 164,469 163,583
------- ---------------------------- ------- --------
293,436 246,472 175,493
------- ---------------------------- ------- --------
104,021 Net current assets 103,599 244,546
------- ---------------------------- ------- --------
343,598 Total assets less current 333,650 479,435
liabilities
Less: Creditors falling due
after more than one year
428 Loans 365 143,319
1,211 Obligations under finance 951 1,389
leases
34,490 Provisions for liabilities & 32,725 35,902
charges
Deferred income
26 Grants not yet credited to 23 86
profit
567 Minority interest 530 568
------- ---------------------------- ------- --------
306,876 Net assets excluding 299,056 298,171
retirement benefits
72,691 Retirement benefits - 63,523 100,404
liability
------- ---------------------------- ------- --------
234,185 Net assets including 235,533 197,767
retirement benefits
------- ---------------------------- ------- --------
Capital & reserves
25,587 Called up share capital 25,691 25,527
208,598 Reserves 209,842 172,240
------- ---------------------------- ------- --------
234,185 235,533 197,767
------- ---------------------------- ------- --------
Consolidated Cash Flow Statement
52 weeks to 26 weeks to 26 weeks to
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- ---------------------------- -------- --------
Cash inflow / (outflow) from
operating activities
56,796 Funds generated by 17,506 20,755
operations
569 (Increase) / decrease in (12,548) (22,147)
working capital
(1,480) Cash spent on exceptional (304) (828)
items
------- ---------------------------- -------- --------
55,885 4,654 (2,220)
1,248 Dividends received from joint 1,250 325
ventures
2,626 Dividends received from 45 -
associates
(4,172) Returns on investments & (1,913) (1,811)
servicing of finance
(7,584) Taxation (4,461) (3,363)
(12,922) Net capital expenditure (9,942) (7,779)
213 (Purchase) / sale of (50) (62)
investments
(4,563) Acquisitions (182) (333)
61 Disposals 40 2,740
(24,718) Equity dividends paid (18,564) (17,865)
------- ------------------------------ -------- --------
6,074 Cash (outflow) / inflow before (29,123) (30,368)
liquid resources & financing
62,694 Management of liquid 40,934 45,581
resources
1,104 Financing - issue of shares 2,025 88
- - new loans - 17
(51,169) - debt repaid (28,592) (5,621)
2,113 - foreign exchange hedging 181 (297)
------- ------------------------------ -------- --------
(47,952) (26,386) (5,813)
------- ------------------------------ -------- --------
20,816 (Decrease) / increase in (14,575) 9,400
cash
------- ---------------------------- -------- --------
Reconciliation of Net Cash Flow to Movement in Net (Debt) / Funds
52 weeks to 26 weeks to 26 weeks to
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- ------------------------------ -------- --------
20,816 (Decrease) / increase in cash (14,575) 9,400
51,169 Cash flow from debt repaid 28,592 5,621
- Cash flow from new loans - (17)
(62,694) Cash flow from management of (40,934) (45,581)
liquid resources
------- ------------------------------ -------- --------
9,291 Change in net (debt) / funds (26,917) (30,577)
resulting from cash flows
(91) Leases - inceptions (6) -
(10,620) Exchange 3,249 (7,122)
------- ------------------------------ -------- --------
(1,420) Movement in net (debt) / funds (23,674) (37,699)
during the period
1,924 Net funds at 27 December 504 1,924
2003
------- ------------------------------ -------- --------
504 Net (debt) / funds at 25 June (23,170) (35,775)
2004
------- ------------------------------ -------- --------
Reconciliation of Operating Profit to Net Cash Inflow /
(Outflow) from Operating Activities
52 weeks to 26 weeks to 26 weeks to
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- -------------------------------- ------- -------
46,307 Operating profit 17,564 18,013
22,174 Depreciation, goodwill 10,973 11,259
amortisation & grant credits
49 Loss / (gain) on disposal of 19 (235)
tangible assets & investments
(11,497) Funding of pension & post (12,249) (10,614)
retirement costs
(237) Increase / (decrease) in 773 2,332
provisions
- Share based payments 426 -
------- -------------------------------- ------- -------
56,796 Funds generated by operations 17,506 20,755
------- -------------------------------- ------- -------
(2,104) Decrease / (increase) in 3,764 (3,603)
stocks
9,551 (Increase) / decrease in (19,894) (5,233)
debtors
(6,878) Increase / (decrease) in 3,582 (13,311)
creditors
------- -------------------------------- ------- -------
569 (Increase) / decrease in working (12,548) (22,147)
capital
------- -------------------------------- ------- -------
(1,029) Cash spent on exceptional (224) (224)
environmental provision
52 Cash (spent)/realised on (478) (478)
exceptional closure costs
(348) Cash spent on exceptional Warman (126) (126)
reorganisation costs
------- -------------------------------- ------- -------
(1,480) Cash spent on exceptional (304) (828)
items
------- -------------------------------- ------- -------
55,885 Net cash inflow / (outflow) from 4,654 (2,220)
operating activities
------- -------------------------------- ------- -------
Statement of Total Recognised Gains & Losses
52 weeks to 26 weeks to 26 weeks to
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- -------------------------------- ------- -------
35,815 Profit excluding share of profit 12,161 10,823
for joint ventures &
associates
1,591 Share of joint ventures' 330 729
profit
5,478 Share of associates' profit 2,597 3,117
------- -------------------------------- ------- -------
42,884 Profit attributable to The Weir 15,088 14,669
Group PLC
39,045 Actuarial gain - -
(11,569) Tax thereon - -
8,370 Exchange differences on foreign (9,076) 9,818
currency net investments
(364) Tax thereon (4) (59)
------- -------------------------------- ------- -------
78,366 Total recognised gains relating 6,008 24,428
to the period
------- -------------------------------- ------- -------
Reconciliation of Movements in Shareholders' Funds
52 weeks to 26 weeks to 26 weeks to
26 Dec 2003 25 Jun 2004 27 Jun 2003
£'000 £'000 £'000
------- -------------------------------- ------- -------
78,366 Total recognised gains 6,008 24,428
(25,378) Dividends (7,111) (6,842)
Other movements
1,104 New share capital subscribed 2,025 88
- Share based payments 426 -
------- -------------------------------- ------- -------
54,092 Net addition to shareholders' 1,348 17,674
funds
180,093 Opening shareholders' funds 234,185 180,093
------- -------------------------------- ------- -------
234,185 Closing shareholders' funds 235,533 197,767
------- -------------------------------- ------- -------
Shareholders' funds are entirely attributable to equity interests.
Independent Review Report to The Weir Group PLC
Introduction
We have been instructed by the company to review the financial information
for the 26 weeks ended 25 June 2004 which comprises the Consolidated Profit
& Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement,
Consolidated Reconciliation of Net Cash Flow to Movement in Net (Debt)/Funds,
Statement of Total Recognised Gains & Losses, Reconciliation of Movements in
Shareholders' Funds and the related notes. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by the law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' Responsibilities
The interim report, including the financial information contained therein,
is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim report in accordance
with the Listing Rules of the Financial Services Authority which require
that the accounting policies and presentation applied to the interim figures
should be consistent with those applied in preparing the preceding annual
accounts except where any changes, and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 26 weeks ended
25 June 2004.
Ernst & Young LLP
Glasgow
25 August 2004
Interim Results
The Interim Results will be sent to shareholders and copies will be available
from The Weir Group PLC, 149 Newlands Road, Cathcart, Glasgow G44 4EX.
Interim Dividend Paid
12 November 2004
Interim dividend will be paid to shareholders on the register at close of
business on 15 October 2004.
Details contained in the interim report can be downloaded from The Weir Group
website at: www.weir.co.uk
Paste the following link into your web browser to download
the PDF document related to this announcement:
http://www.rns-pdf.londonstockexchange.com/rns/2788c_-2004-8-24.pdf
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