Keith Cochrane to stand down as Weir Group chief executive

Mr Cochrane announced his departure as the Glasgow firm unveiled a 25 per cent drop in interim pre-tax profits to £82 million.

Fifty-one-year-old Mr Cochrane, who said he has “enjoyed every minute” of his ten years on the board will leave the business at the end of September to be replaced by current finance director Jon Stanton.

He said succession was something he had been thinking about for some time. “I’m a great believer that chief executives do have shelf lives and there is a right time for you personally – and for the business – for a chief executive to move on.

“You don’t know when the right time is until it’s upon you. You can’t predict when that day will be, but it starts to get perhaps a bit samey for you and samey for the business. When that happens, it’s telling.”

Calling Weir “a special business”, he added: “One thing’s for sure, I’m not retiring. I will be looking out for the next opportunity.”

Revenue for the six months to June 30 was down 12 per cent to £866m, as the company’s exposure to the oil and gas downturn continues to impact earnings, though Mr Cochrane said the performance was ahead of expectations.

Of his departure, he added: “Businesses need different leadership styles, approaches, perspectives. Of course, I’ve got my own way, and we all have our own unique way of thinking about business and leadership and it’s good for businesses to get different perspectives.”

Over the course of his tenure, Weir has returned 150 per cent to shareholders and he said Mr Stanton had a great platform to build on.

Taking the helm for his last set of results, Mr Cochrane said he was disappointed with the Brexit vote but that it was now time to look forward to the opportunities it could create.

He added that it was “way too early” for anyone to have a view on the value of a second independence referendum but acknowledged that it was a “legitimate question that some will pursue in due course”.

The priority, he said, was that the UK and Scottish governments had to come together to map out the post-Brexit environment.

“Do you park the independence question and focus on ensuring Scotland and the UK are going to be successful for business? Ultimately it is business that creates jobs and value and we’ve got to have the right environment. It’s not just all about the constitutional framework.”

The last three years of Mr Cochrane’s leadership have been hindered by the oil and gas downturn and that, he said, was why overall numbers were down.

A 43 per cent reduction in oil and gas revenues swallowed up three per cent gains in both its minerals and flow control businesses.

“The sheer scale of the downturn overwhelms that growth but the results demonstrate our resilience and the robustness of the business,” said Mr Cochrane.

He added that the company had protected its research and development budget and continued to invest, highlighting the £38m contributed from new products, and the progress in its digital technology, which includes its first 3D-printed component in its flow control business.

He also said the oil and gas division was in a relatively good place because of its exposure in North America and the Middle East, which Mr Cochrane said were the two markets that will benefit from any recovery in the oil price, and hinted that there could be a pick-up in activity in Q4.

The largest of several buys made in the shale, oil and gas industries during Mr Cochrane’s decade on the board was the £328m splashed on shale firm SPM in 2007, a deal that he said was a very important acquisition for the group.

“It’s for others to write that legacy piece, not me. But I’d like to think we’d look back at good exposure for the group. Have we benefitted? Yes. We’re feeling the pain right now but we’ve had some fantastic years and it’s an industry that has a very positive outlook.”

Mr Cochrane also said the prospect of Weir working on the Hinckley Point nuclear power station was exciting. As one of two UK preferred bidders for equipment orders at the EDF plant, he said: “It will create opportunities – particularly in Alloa.”

Summing up the business ahead of his imminent departure, Mr Cochrane said: “It is in good health, it has a good strategy and there’s a great platform to secure the group’s future and enable it to benefit as end markets recovered.”