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