Shares in Weir Group closed up nearly 4% as the Glasgow engineering giant flagged its expectations of higher margins and its growing pipeline of greenfield orders, following a challenging first half of the year.

The company, which supplies parts and original equipment to the global mining industry, underlined its confidence of meeting expectations for the year as it reported a 3% fall in pre-tax profits to £165 million for six months ended June 30 and downgraded revenue expectations for the year, amid “macroeconomic and geopolitical tension”.

Chief executive Jon Stanton hailed “robust” conditions in the mining market and the “resilience” of Weir’s after-market business, following a second quarter which saw “probably more moving parts than I have seen for a long while, in terms of specific mine closures and some regions affected by conflicts”.

However, investors lifted shares as Weir flagged its expectation of higher margins for the full year and growing pipeline of orders for the second half.

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The company said after-market orders rose by 2% in the first half despite challenges caused by conflict and military coups in Central and West Africa, as well as “headwinds” brought by shutdowns by nickel and lithium operators in Australia, and ongoing mine closures in Panama and Turkey.

Weir said the strength of the copper and gold markets had “more than” offset the impact of shutdowns and hailed the emergence of major greenfield projects, principally in Asia and Africa. These include a £53m contract awarded in July for a greenfield mine in southern Asia, which will utilise Weir’s high-pressure grinding rolls.

Mr Stanton told The Herald: “I’m delighted we were able to grow our after-market orders by 2% and, on the projects side, we are highlighting that, finally, after talking about projects being slow to convert, we are now starting to see some larger projects moving ahead.

“There are a number of other projects coming through the pipeline, not quite at that size but between £10m and £40m… we are hoping to convert over the remainder of the year. The outlook for new mines is looking positive, albeit they are more eastern hemisphere based. [There is] a lot of activity in Africa, southern and central Asia, [and] Asia-Pacific. It is not necessarily the UK listed miners who are getting on with it, but miners from other parts of the world. And of course with our global footprint, we are in great shape to capture that.”

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Mr Stanton added: “The second quarter feels like the bottom of the current cycle, and we are picking up from here, which is great. That said, we delivered strong profit growth, up 8% [to £215m in] constant currency. Our margin performance was phenomenal in the first half of the year, up nearly 2% from 16 to 17.8%, and that is about strong delivery of our performance excellence programme, good underlying efficiencies, [and] good cost control, as well as some benefit from product mix in the first half. We are well on our way to delivering our 20% [margin] target in 2026.”

Mr Stanton said despite the company nudging down its revenue guidance for the year, Weir expects its operating margin to be higher than previously guided, meaning net profits are “bang in line with consensus”. He noted: “We had a very strong cash performance in the first half of the year, so that really underpins our confidence in the step up in pre-operating cash conversion we are targeting this year.”

Meanwhile, Mr Stanton highlighted the prospect of Donald Trump imposing import tariffs across the Atlantic should he lead the Republican Party to victory in the US election in November.

Trump has previously said he would introduce a 10% import tariff on all goods entering the US if he regains power.

“We’ve been there before and managed that in terms of tariffs, if they come through,” Mr Stanton said. “Generally, the macro [economic] outlook is more positive than it has been for a while, with inflation generally under control, [and] interest rate reductions potentially coming over the balance of the year. So, I think it is looking slightly more positive, albeit, depending on the outcome of some of the elections and other factors. I do think we have to be careful about inflation in the medium to longer term. It does have the potential, to my mind, to come back… There are inflationary pressures out there and the geopolitical tensions heighten that.”

Shares closed up 3.63p, or 70p, at 2,000p.