Two under-performing businesses being restructured by specialist engineer Weir are on track to return to the black next year, the group said today.
Glasgow-based Weir, which announced the overhaul of the UK-based clear liquid and valve divisions earlier this year, also said it achieved an improvement in underlying profits of 1.5 per cent to £ 24.4 million in the six months to June 30.
That was at the top end of market expectations and was accompanied with a forecast of improved sales and profits in the second half of the year.
Shares closed down 2 at 358p.
Weir hopes to benefit from continued expansion into higher margin, higher growth markets, as well as from new business areas such as China.
The company said its focus in the first half of the year had been on reviving the two UK businesses that form part of its engineering products operation.
The moves resulted in the loss of 490 jobs but should restore the two businesses to profitability in the 2006 financial year.
Weir raised its interim dividend by 2.9 per cent to 3.55p, from 3.45p previously, as revenues in the first half rose 9.7 per cent to £354.1 million from £322.7 million.
The company said the restructuring programme at clear liquids was on track and proceeding within budget, adding that as a consequence of the reorganisation of the Cathcart site, the group's head office will move to Glasgow city centre towards the end of this year.
The restructuring at the valve arm is also proceeding to plan. Weir will move to a modern manufacturing facility three miles from the existing Huddersfield site.