US Edition 
Weir profits hit by strong pound
British engineer is latest British company hurt by sterling's rise
Engineering firm Weir Group has joined the swelling ranks of big British companies whose profits have been savaged by the strengthening pound.
On Thursday, Weir reported that operating profits had fallen 7pc during the first-half of the year to £201m as a result of adverse currency movements. The swing wiped £23m off the final figure in the first six months of the year, equivalent to 11pc of earnings.
Glasgow-based Weir sells pumps and valves for the mining and oil and gas industries and employs about 15,000 people in 70 countries.
Over the past year, sterling has gained about 13pc against the US dollar and about 10pc against the Euro, as the pace of Britain’s economic recovery outstrips other western countries and investors bet that it will be among the first to push up interest rates.
In the last few weeks, a raft of British multinationals have reported a dent to profits form the pound’s relentless rise. GSK, the drugmaker, Burberry, the luxury retailer, and Associated British Foods, were among the first to feel the sting. This week, they have been joined by Rolls Royce, British American Tobacco, and GKN. Next week, another wave is expected.
Weir said growth in many of its overseas markets had been effectively cancelled out by the strength of the pound.
“If you look at the basket of currencies we deal in – the US dollar, the Canadian collar, the Australian dollar, the South African rand, and the Chilean peso, they have all weakened against sterling since last year,” Jon Stanton, Weir’s finance director said in an interview.
Weir emphasised that it was happy with underlying performance during the period. The currency translation overshadowed roaring profits in Weir’s oil and gas division, which jumped 27pc to £98m, largely as a result of orders from the booming US shale industry.
However, performance in its minerals division was disappointing with equipment orders slumping 27pc.
The company said it expected the second half of the year to be better, although there was likely to be a further £17m hit from sterling.
"We anticipate strong revenue and profit growth in the second half of 2014, assuming no further deterioration or disruption in mining end-markets," Keith Cochrane, Weir’s chief executive, said in a statement.