Weir FY profits grow amid strong mining demand, shares slump on increased IT spend

(Sharecast News) - Engineering firm Weir Group said both profits and margins had expanded in the 12 months ended 31 December as rising mining activity drove growth across the business, but traded lower early on Wednesday as higher IT-related spending saw the company downgrade its 2026 guidance. Weir said orders had risen 7% to £2.59bn, supported by minesite expansions, debottlenecking projects and increased technology adoption. Original equipment orders were flat, but up 6% on an underlying basis excluding large contracts, while aftermarket orders climbed 8% on high activity levels and recent acquisitions.

Revenues increased 6% to £2.56bn, with OE revenue up 2% and aftermarket revenue rising 8%, while adjusted operating profits advanced 15% to £518m, lifting Weir's adjusted operating margin to 20.2%, up 150bps year-on-year.

Free operating cash conversion came in at 92%, within guidance, while net debt stood at 1.9x EBITDA following recent M&A activity. Return on capital employed was 17.9%, reflecting acquisition spend.

Looking to 2026, Weir expects constant‑currency growth in revenue, operating profit and margins, supported by further brownfield expansion, strong activity levels and continued growth in mining software. Free operating cash conversion was pegged to be somewhere between 90 and 100%, while Weir also reiterated mid‑single‑digit organic revenue growth and roughly 50 basis points of margin expansion for FY26.

Analysts at RBC Capital Markets noted Weir's softer 2026 guidance, driven by higher spending on a new company-wide IT system, will weigh slightly on margins However, the Canadian bank also noted margins were "steady" and underlying demand "remains solid", especially in mining aftermarket services, keeping the long-term growth story intact despite the near-term headwind.

As of 1130 GMT, Weir shares were down 8.35% at 3,118p.

Reporting by Iain Gilbert at Sharecast.com