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Neil Veitch
Fund Manager SVM Asset Management
SVM UK Opportunities Fund
Neil Veitch
SVM Asset Management
Key Facts
Only involved in Fund Management
UK, European and Global specialists
Highly incentivised
Agile and capacity aware
= Performance
Source: SVM 31 Dec 06
Neil Veitch
Performance Boutique
Fund Name % growth sector rank
SVM UK Opportunities 35.8 1/324
SVM UK Alpha 25.3 26/324
SVM UK 100 Select 22.4 45/324
SVM Continental Europe 24.3 10/103
SVM Global Opportunities 12.7 2/181*
SVM All Europe SRI 6.4 3/21**
Source: LipperPerformance for 12 months to 31/12/06 except *from launch 15/05/06 & ** from launch 31/10/06
…..so how did we do last year?
Neil Veitch
What do clients expect of a Fund Manager?
Buy stocks that are trading at a discount to intrinsic value
Sell them when they achieve full value or when there is more upside elsewhere
Buy low – Sell high
Balfour Beatty share price
1.5
2
2.5
3
3.5
4
4.5
Oct-
03Dec
-03
Feb-0
4Apr
-04
Jun-
04Aug
-04
Oct-
04Dec
-04
Feb-0
5Apr
-05
Jun-
05Aug
-05
Oct-
05Dec
-05
Feb-0
6Apr
-06
Jun-
06Aug
-06
Oct-
06
Sold
Sold
First Bought
Bought again
Source: Bloomberg
Neil Veitch
What excites the market?
Higher Growth
Operational Restructuring
Financial restructuring
M&A
“Ch ch changes”
Special Situations
Neil Veitch
Consensus equals index return less charges
0
5
10
15
20
25
30
35
40
45
19
155
Source : Bloomberg
FTSE 350 average number of analysts per company by market cap
% o
f F
TS
E 3
50
20 50 100 350
28
Neil Veitch
Size matters
Example
Market cap of the 125th company in the FTSE 250 = £947m
Fund Size Holding Ownership of shares in issue
£750m 2% 1.6%
£2bn 2% 4.2%
£4bn 2% 8.4%
Source : Bloomberg 31/12/06
Neil Veitch
The Dilemma – getting in is easy
“All you need is love”
Neil Veitch
The Dilemma – Getting out can be harder
“Yesterday, all my troubles seemed so far away”
Neil Veitch
Aim to sell on the last piece of good news
C&C Group share price Buy
Targets could prove conservative Cider market is being created Growth in a stagnant market
Sell
Analysts forecasts Good news fully discounted Potential seasonal impact
Source: Bloomberg
6
7
8
9
10
11
12
13
14
15
May
-06
Jun-
06
Jul-0
6
Aug-0
6
Sep-0
6
Oct-
06
Nov-0
6
Dec-0
6
Bought
Sold
Neil Veitch
Process – Find, Analyse, Decide
Neil Veitch
Process – Find, Analyse, Decide
Neil Veitch
Process – Find, Analyse, Decide
Neil Veitch
Company Analysis - Weir Group
Market Cap £1087m
Global producer of specialised pumps and valves.
Pricing Power
Major supplier to oil, gas and utility sectors – organic sales growth of >10% per annum
Restructuring programme well advanced
Share buy backs to continue
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
May
-04
Jul-0
4Sep
-04
Nov-0
4Ja
n-05
Mar
-05
May
-05
Jul-0
5Sep
-05
Nov-0
5Ja
n-06
Mar
-06
May
-06
Jul-0
6Sep
-06
Nov-0
6
Bought
Weir Group Share Price
Source: Bloomberg
Neil Veitch
Disciplined Company Analysis
Top line growth
Margins
EV/Sales
Cash Conversion
Source: SVM
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
Neil Veitch
Disciplined Company Analysis
Top line growth
Margins
EV/Sales
Cash Conversion
Source: SVM
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E690.10 787.90 940.00 1021.00 1101.00 1150.00
Neil Veitch
Disciplined Company Analysis
Top line growth
Margins
EV/Sales
Cash Conversion
Source: SVM
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E690.10 787.90 940.00 1021.00 1101.00 1150.00
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E7.5% 7.2% 8.3% 9.4% 9.8% 10.1%
Neil Veitch
Disciplined Company Analysis
Top line growth
Margins
EV/Sales
Cash Conversion
Source: SVM
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E690.10 787.90 940.00 1021.00 1101.00 1150.00
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E7.5% 7.2% 8.3% 9.4% 9.8% 10.1%
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E1.53 1.34 1.12 1.03 0.96 0.92
Neil Veitch
Disciplined Company Analysis
Top line growth
Margins
EV/Sales
Cash Conversion
Source: SVM
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
SVM Company Research Date: 31/12/06
Company Name: Country
RIC: WEIR.LN SVM Analyst: NVEI
Current Price (GBP): 5.25 6.00
Market Cap(GBP): 1,066 No. shares o/s:(mil) 203 Yr End: Dec
One Line Client Summary:
Key Figures 2004 A 2005 A 2006 E 2007 E 2008 E 2009 ESales 690.10 787.90 940.00 1021.00 1101.00 1150.00
% change 14.2% 19.3% 8.6% 7.8% 4.5%EBITDA 67.20 74.10 96.20 115.20 128.10 135.90
EBITDA margin 9.7% 9.4% 10.2% 11.3% 11.6% 11.8%EBIT 52.00 57.10 78.20 96.20 108.10 115.90
% change 9.8% 37.0% 23.0% 12.4% 7.2%EBIT margin 7.5% 7.2% 8.3% 9.4% 9.8% 10.1%Net Interest -3.10 -4.10 -2.50 -5.00 -5.00 -5.00
Tax % 21.0% 22.0% 26.0% 26.9% 27.0% 27.5%Associates 6.4 9.2 8.0 7.8 8.0 8.0
Cash Exceptional 0.00 16.00 10.00 5.00 0.00 0.00Net Income 43.69 48.52 61.94 72.37 81.10 86.20
% change 11.1% 27.7% 16.8% 12.1% 6.3%EPS 0.21 0.25 0.31 0.36 0.40 0.42
Debt 85.00 186.06 186.06 186.06 186.06 186.06Cash & Equivalents 97.60 109.60 81.99 101.66 130.51 171.62
EBIT/Net Interest 16.8 13.9 31.3 19.2 21.6 23.2Debt-Cash/EBITDA -0.2 1.0 1.1 0.7 0.4 0.1
Operating Cash Flow 40.97 42.39 71.37 81.35 94.11Capex charge 24.80 25.70 23.50 22.50 22.00 20.50
other cashflow -5.00 -60.80 -18.60 0.00 0.00 0.00Free Cashflow -24.80 15.27 18.89 48.87 59.35 73.61
WC 169.96 194.51 232 252 272 284
P/E 25.00 21.34 17.21 14.73 13.14 12.36Dividend 25.70 26.60 27.90 29.20 30.50 32.50
Dividend Yield 2.4% 2.5% 2.6% 2.7% 2.9% 3.0%FCF Yield -2.3% 1.5% 2.0% 5.0% 5.9% 7.0%
FCF / EBIT (cash conversion) 82% 70% 58% 81% 80% 89%EV/Sales (trade value) 1.53 1.34 1.12 1.03 0.96 0.92
EV/EBITDA (trade value) 15.67 15.41 12.16 9.98 8.75 7.95WC/Sales 25% 25% 25% 25% 25% 25%
Risks
Catalyst
Weir Group UK
Better than expected numbers as a consequence of strong end markets and delivery on restructuring
Weir is a manufacturer and supplier of industrial pumps and valves for global end markets such as minerals processing, oil & gas, power and general industry
Slowdown in global growth feeding through into the end market demand for commodities. However, compared with the peer group Weir has very high visibility with orders extending out 2-3 years.
Target Price (£):
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E690.10 787.90 940.00 1021.00 1101.00 1150.00
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E7.5% 7.2% 8.3% 9.4% 9.8% 10.1%
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E1.53 1.34 1.12 1.03 0.96 0.92
2004 A 2005 A 2006 E 2007 E 2008 E 2009 E82% 70% 58% 81% 80% 89%
Neil Veitch
Process – Find, Analyse, Decide
Neil Veitch
Portfolio activity during 2006
57
64
68
61
50 52 54 56 58 60 62 64 66 68 70
At end 2006
At start of 2006
Bought
Sold
“A little less conversation a little more action, please”
Number of Stocks
Source : SVM
Neil Veitch
Will it look like this in 6 months?
Size Analysis Sector Analysis
Source : SVM 31/12/06
1.2
8.8
18.9
60.2
10.8
0 10 20 30 40 50 60 70
Cash
Fledgling/AIM
Small
Medium
Large
Fund %
0 5 10 15 20 25 30 35 40
Cash
Technology
Financials
Utilities
Telecommunications
Consumer Services
Health Care
Consumer Goods
Industrials
Basic Materials
Oil & Gas
Benchmark % Fund %
Neil Veitch
Top of the Pops
1 Year 3 Years 5 Years Launch*
SVM UK Opportunities 35.8% 107.7% 119.7% 195.9%
Sector Ranking 1/324 6/284 7/227 2/192
Cumulative Performance, % change to 31st December 2006
Source: Lipper * Launch 20/03/00
Performance to “make you feel like dancing”
Neil Veitch
FOR PROFESSIONAL ADVISERS ONLY
Please remember that past performance should not be seen as an indication of future performance. Stockmarkets and currency movements may cause the value of an investment to fall as well as rise and investors may not get back the amount originally invested. Investing in small companies may increase the volatility of the fund.
Disclaimer
The information provided in this presentation is for the sole use of those attending the presentation. It may not be reproduced in any form without the express permission of SVM Asset Management and to the extent that it is passed on, care must be taken to ensure that this is in a form which accurately reflects the information presented here.
Regulatory Status
SVM Asset Management is authorised and regulated by the Financial Services Authority
Percentage growth 31/12/2005 31/12/2004 31/12/2003 31/12/2002 31/12/2001for each year 31/12/2006 31/12/2005 31/12/2004 31/12/2003 31/12/2002
to last quarter end
SVM UK Opps 35.8 25.1 22.2 28.9 -18.0
FTSE All-Share Index 16.8 22.0 12.8 20.9 -22.7
+8.0 +4.7Fund performance compared to Index
+19.0 +3.1 +9.4
*Source: Lipper Hindsight, UK All Companies, mid to mid, UK net, to last quarter end 31/12/06
Investment Warning