Weir share price: Group warns of ‘guaranteed’ Scottish independence costs

on Apr 3, 2014
Updated: Apr 9, 2020
Listen, Thursday, April 3: The Weir Group (LON:WEIR) has become the latest FTSE 100 company to voice its concerns over Scottish independence, warning that a ‘yes’ vote in September would result in ‘guaranteed costs’ for businesses.

Weir’s share price has shed about 0.5 percent in London so far today.
**Weir Group voices Scottish independence concerns**
The Glasgow-based engineering group today released a report looking into the economic consequences of a ‘yes’ vote. The 80-page document, compiled by Oxford Economics for The Weir Group, said that higher taxes for Scottish firms would be likely in the case of a ‘yes’ vote in the September referendum.

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Commenting on the report, the company’s chief executive Keith Cochrane said that for businesses, “the costs of independence are guaranteed but the benefits are uncertain”.
Cochrane told the BBC that he personally would be voting ‘no’. Speaking as he launched the report, Cochrane pointed out that while there were benefits in an independent Scotland being able to do things differently from the rest of the UK, the independence status also meant “additional costs for companies that operate across these islands”.

Responding to the report, Scottish Finance Secretary John Swinney, told the BBC that international comparisons showed that “independent countries of Scotland’s size have considerably larger manufacturing sectors than the UK and are able to offer more support to their manufacturing companies than Scotland is currently able to do”.
“Weir Group operates in 70 countries, employs over 15,000 people worldwide and has just confirmed the purchase of a successful Finnish company, showing no signs of uncertainty about their operations,” he added.

On Tuesday, The Weir Group confirmed that it had approached Finland’s Metso Corporation (HEL:MEO1V) with a takeover offer. (Weir share price slips as group confirms talks with Finnish rival)
Weir’s report marks the latest warning from a FTSE 100 company on the risks associated with Scottish independence. Last month, BAE Systems Plc (LON:BA), which runs Scotland’s largest military shipyards in Glasgow, said in its annual report that a ‘no’ vote would be better for the company’s business. (BAE share price: Defence group warns of Scottish independence risks)

In February, Edinburgh-based Standard Life (LON:SL) signalled that it was ready to move south of the border in the case of a ‘yes’ vote. (Standard Life share price: Company ready to leave Scotland if necessary)
Willie Walsh, the chief executive of British Airways owner International Consolidated Airlines Group Plc (LON:IAG), however sees independent Scotland as a positive development with the Scottish government having pledged to reduce and possibly abolish air passenger duty.
**JPMorgan reiterates ‘neutral’ rating**
Analysts at JPMorgan Chase & Co yesterday reiterated their ‘neutral’ rating on The Weir Group without specifying a price target. Earlier this week, Canaccord Genuity reaffirmed the FTSE 100 company as a ‘buy’ with a price target of 2,500p, while earlier last month, Numis Securities reiterated their ‘add’ rating on the stock with the same price target.
The Weir Group currently has a consensus ‘hold’ rating and an average price target of 2,283.42p.
**As of 15:00 BST, buy Weir shares at 2512.00p.**
**As of 15:00 BST, sell Weir shares at 2510.00p.**


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