Weir Group PLC (LSE:WEIR) shares jumped 7.8% to 2,720p after strong second-quarter orders and an improving product mix underpinned its full-year guidance.
Orders rose 8% at constant currencies to £1.43 billion in the first half, including a 10% increase in original equipment and 8% growth in aftermarket products. Demand was strongest across copper, gold, iron ore and oil sands.
Revenue increased 5% at constant currencies to £1.27 billion, although adjusted operating profit was flat at £239 million. The adjusted operating margin fell one percentage point to 18.8%, reflecting an unfavourable product mix, delayed production transfers and a strong comparison with last year.
Adjusted pre-tax profit dropped 8% to £196 million and adjusted earnings per share fell 7% to 54.6p. Statutory pre-tax profit, however, rose 7% to £175 million.
Chief executive Jon Stanton said the group had seen "an acceleration in Q2 supported by market share gains in new bids, competitive trials and demand for innovative new solutions".
Weir expects profitability and cash flow to strengthen in the second half as it delivers its order book and sells a greater proportion of higher-margin aftermarket products.
The mining equipment maker reiterated expectations for constant-currency growth in revenue, operating profit and margins. It expects full-year margins above 20% and remains on track for £90 million of cumulative efficiency savings.
Cash conversion is forecast to recover to 90%-100%, while net debt is expected to fall towards 1.5 times earnings by year-end.
The interim dividend rose 2% to 20p per share.
Broker Panmure Liberum said results "were broadly in line with expectations", with total orders slightly ahead of the £1.38 billion consensus forecast and a book-to-bill ratio of 1.12 up from 1.09.
"Minerals continued to win greater than 90% of field trials which is encouraging."
Peel Hunt said the results read "better than many expected", with EBITA of £239 million "bang on consensus".
Organic order book growth accelerating from the first to the second quarter, "which is important for second-half revenue delivery" and "highlights market share gains, which is a direct response to the debate in recent months post comments from peers".
With full-year guidance unchanged "there are many moving parts, so might there be some trims, particularly on FY margins. This would not be a surprise, but the key is the momentum after the sticky Q1, and the margin should follow, so this underpins our confidence", analysts said.
