Mining tech firm Weir Group delivered another year of strong growth in 2023, posting an 18% rise in adjusted profit to £459 million on a similar increase adjusted operating margins (17.4%), which exceeded its target for the year.
Free operating cash conversion for the year was 85%, which lies in the middle of the group’s 2023 target range of 80% to 90%, while the efficiency of its mining-focused platform led to a reduction in working capital as a percentage of sales to 21.3%.
These results, according to the Glasgow-based firm, builds on the strong momentum from its Performance Excellence transformation program, which realized absolute cost savings of £6 million and identified new opportunities that enabled the company to double its previous cost saving target to £60 million by 2026.
“Weir is delivering on the compelling value creation opportunity we set out as a focused mining technology company,” CEO Jon Stanton said in a news release. Our unique capabilities are enabling us to capitalize on the structural growth in demand for critical metals and the transition to more sustainable mining. In parallel, through Performance Excellence we are optimizing our operations and driving efficiencies.”
On the back of these results, Weir’s board is recommending a final dividend of 20.8 pence per share, in line with the company’s policy to pay out 33% of adjusted earnings per share (EPS). This equates to a total full year dividend of 38.6 pence per share, for an increase of 18% on the prior year.
Looking ahead, the company said it is expecting another solid year in 2024 on the back of a strong order book and positive ore production trends in the mining markets, as well as installed base expansion.
Benefits from Performance Excellence will support further margin expansion, it added, resulting in free operating cash conversion of between 90% and 100%, and in the longer term, underpin a 2026 operating margin target of 20%.
