London-based Panmure Liberum has described Weir Group’s circa-13% share price slump after its latest full-year earnings report as the company “cooling off after a strong run” as Weir management talks about future growth being tied to “long-term structural tailwinds across the mining industry”.
The UK-listed equipment manufacturing company, which has a current market value of more than US$10.3 billion, booked relatively flat 2025 revenues (£2565 million) and orders (£2598 million) while net profit was down 21% year-on-year at £248 million and net debt more than doubled to £1274 million.
“We reduce our FY26 and FY27 earnings-per-share estimates by 7% and 2%, respectively, principally to reflect high interest costs,” Panmure Liberum said. “We increase our FY26 net debt estimate from £952 million to £1068 million, largely to reflect the higher FY25 position.”
Weir’s debt ballooned on the back of its US$800 million acquisition of Australian mining software firm Micromine, which Panmure Liberum rated a good deal vis-à-vis others in the sector. Analysts heard on Weir’s results call that the company had a strong pipeline of acquisition targets, though it expected 2026 to be about integration of Micromine and other 2025 add-ons.
“We expect the group to de-lever quickly due to its impressive cash conversion,” Panmure Liberum said.
“Our analysis suggests Weir could potentially have £408 million or £807 million at the end of FY26 and FY27, respectively, to deploy on M&A.”
Weir CEO Jon Stanton said the acquisition of Micromine – a “high growth business of scale” – and Brazil’s Fast2Mine “significantly accelerated our strategy to unlock the potential for digital technology to drive productivity and sustainability in mining”.
Weir has parked Micromine and its other digital businesses in equipment parts arm ESCO for now. Panmure Liberum said Micromine helped lift ESCO’s full-year EBIT margin to 22%.
“The group specifies that the ROIC of acquisitions must be greater than its WACC [weighted average cost of capital] by year three. To exceed this hurdle Micromine must generate EBIT of £79 million in FY28. We estimate that this represents a 44% CAGR from FY25 EBIT.
“Clearly, this is an ambitious growth rate.
“However, given Micromine has achieved a 25% revenue CAGR from 2022-25 we believe it is attainable. We highlight the high degree of operating leverage present in Micromine – software with a high recurring revenue stream – as well as the significant cost and revenue synergies [from] cross-selling into Weir’s wider customer base, to be achieved, which will help to deliver this growth.
“The FY25 results indicated that there has been good progress on the later.”
Weir said Micromine contributed £41 million of revenue and £17m of adjusted EBIT in eight months of trading after its 2025 acquisition. The group’s total revenue was up 2% (£51.2m) in the 12 months to December 31.
“We expect organic revenue growth of 6.4% for the group [in FY26] in line with guidance of mid-single-digit organic revenue growth,” Panmure Liberum said.
“However, we take the opportunity to reflect a c1% FX headwind given current exchange rates.”
