Company Profile

Weir is a leading global supplier of mining equipment. The group's two divisions supply the ground engaging tools (GET) and mine processing equipment that enable increasingly more efficient handling of hard rock with a focus on iron ore, copper and gold production. It operates six foundries, 32 manufacturing sites and has a global service centre footprint. The 300bps operating margin improvement strategy, targeting 20%, is two-third self-help and one-third external growth/operating leverage. Revenue is dominated (c.80%) by aftermarket consumable spare parts and service, giving strong visibility while its more energy efficient original equipment offering is gaining increased traction with customers. Stronger cash generation and scope for further working capital improvements provide scope for significantly reduced financial leverage and healthier dividend growth. Weir is also a perennial takeover target.