the weir group plc, uk
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April 2004
CO
MPA
NY
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Pump Industry Analyst
Thomas Industries Increported record earnings forthe year ended 31 December2003, on net sales that werean all time record for thecompany’s pump and com-pressor business.
2003 net income wasUS$37.3 million, up fromUS$32.7 million in 2002.Net sales for the year wereUS$376.8 million, well upon last year’s US$240.6 mil-lion. Net sales and netincome for 2002 includeonly four months of contri-butions from Rietschle,which was acquired inAugust 2002.
Looking ahead to 2004,CEO Timothy Brown saidthey are optimistic about
the year ahead as they antici-pate additional operationalimprovements within thepump and compressor busi-ness. “Our priorities will beon growing sales andimproving our operationswith particular emphasis onreducing costs, improvingon-time delivery and lower-ing our overall cost of quali-ty,” explained Brown.
The company recentlyannounced plans to shut itsfacility in Wuppertal, Ger-many, with an anticipatedcost for the first three quar-ters of 2004 of US$3 million.The Wuppertal product linewill be transferred to the newMemmingen facility by theend of June 2004. ■
Thomas Industries Inc,USA
Key Figures (US$ million)Quarter ended 31.12
2003 2002
Net Sales 99.6 85.4Of Which:Pump and Compressor 99.6 85.4
Cost of Product Sold 66.1 55.8
Gross Profit 33.6 29.6
Operating Income 14.1 14.7Of Which:Pump and Compressor 8.8 8.4
Net Income 8.5 8.7
Year ended 31.12
2003 2002
Net Sales 376.8 240.6Of Which:Pump and Compressor 376.8 240.6
Cost of Products Sold 246.8 154.9
Gross Profit 129.9 85.7
Operating Income 60.1 54.5Of Which:Pump and Compressor 36.7 31.7
Net Income 37.3 32.7
COMMENT
The Weir Group plc,UK
Key Figures1 (£ million)Year ended 26.12
2003 2002
Turnover 793.4 841.7Of Which:Engineering Products 428.9 429.2Engineering Services 188.9 153.4
Order Input 727.4 675.4
Operating Profit 63.5 62.2
Pre-tax Profit 56.7 60.0
Profit attributable to The Weir Group 42.9 50.2
1 Continuing operations
Weir’s 2003 performancewas shaped by operationalimprovements, new productdevelopment and successfulgeographic expansion. Theseactivities, together with theeconomic upturn that thecompany is beginning to seein a number of sectors, areexpected to contribute to animproved 2004 performance.
In 2003, turnover fromcontinuing businesses in-creased 0.9% to £793.4 mil-lion. Operating profit beforeinterest, tax, goodwill andexceptionals was £63.5 mil-lion compared with £57.7million last year, a 10.0%gain.
Engineering Productsturnover, which includesMinerals, Clear Liquid andValves & Controls, was inline with 2002 at £428.9 mil-lion, while operating profitincreased 7.2% to £34.9 mil-lion, driven by the strongerperformance from Mineralsand an improved result fromClear Liquid.
The results for Valves &Controls were affected bycontinued softness in thepower and nuclear markets
and one-off charges to ration-alize the French operationsand to improve the UK busi-ness. Order input respondedpositively to new product andsales initiatives. The contin-ued softness in the US andEuropean power markets wascountered by extensivegrowth in Asia.
Engineering Services’turnover increased 23% to£188.9 million, resulting inan operating profit of £20.6million against £15.3 millionin 2002. The improvementsreflect efforts to grow UKservice operations andexploit opportunities in thekey growth markets of NorthAmerica, Australia and theMiddle East.
In 2003 Weir committedextensive funds to new prod-uct development. In the ClearLiquid Division new productlines included the Unigliderange and the new RotojetVSR 2100 pump. A newrange of pumps from theMinerals Division introducedspecifically to boost marketshare in the Canadian oilsands industry has enjoyedencouraging initial results. ■
COMMENT