Weir Group sells off two renewables units

Weir is cutting costs after being hit by the steep fall in oil and gas activity

Engineering firm Weir Group has announced the sale of two renewables units as it continues a £100m asset disposal programme.

Weir will receive up to £36.7m for American Hydro Corporation and Spain-based Ynfiniti Engineering Services.

The businesses, which generated a combined operating profit of £1.4m in 2015 on revenues of £38m, were part of Weir's flow control division.

Glasgow-based Weir said it would record a loss on disposal of about £5m.

However, it added that net debt at the end of June would be lower than previous guidance.

Both sales are expected to complete by 30 June.

US and Canada-based American Hydro supplies and installs large equipment upgrades and servicing for the hydroelectric and water distribution industries.

Madrid-based Ynfiniti provides operation and maintenance services for the wind, solar photovoltaic and thermo-solar energy sectors.

'Progressing to plan'

Weir said its asset disposal programme was "progressing to plan".

The company has been looking to cut costs after being hit by the steep fall in oil and gas activity.

In the first quarter, its flow control division saw orders fall by 20% on the previous year.

The company said economic uncertainty had led to "continued customer caution and project delays across the division's end markets".

In an update on the overall group's current performance, Weir said trading in April and May was in line with expectations.

Orders for the five months to the end of May were 15% below the same period in 2015, but it was an improvement on the 21% fall recorded in the first three months of the year.

It added: "As a result, the group remains on track to meet its prior guidance for first half profits, ahead of current market expectations.

"Underlying cash generation remains robust. There is no change to the group's prior full-year guidance as outlined on 28 April 2016."