Rotork posts record revenues in first half

6th Aug 2013 08:22

Record first half results from industrial valve manufacturer Rotork have provided encouragement for its acquisitive approach. Each of the FTSE 250 group's divisions turned a profit, combining to produce profits before tax and amortisation up 12.3% to £69.4m.Chief Executive Peter France said: "Our strategy of broadening our product offering and investing in our infrastructure has enabled us to grow order intake, revenue and profit all to record levels despite the weak economic conditions in some of our regions."Revenues rose 5.2% to a record £276.1m, with order intake 9.4% higher than the comparative period, boosted by North America and parts of Asia performing particularly well, and resulted in a record half year order book of £208.2m, 15.1% higher than the end of 2012. Rotork Fluid Systems showed the strongest order intake growth of 20.2%, but the group admitted ongoing weak economic conditions in certain markets hurt the Controls electric actuator division, with weakness concentrated in some European markets and the Indian power market.With two acquisitions feeding the period, and two more purchases announced in conjunction with the results, France explained that the board anticipated that, as in previous years, performance in 2013 would be weighted towards the second half. "The order book, project activity in the broad geographic regions we serve and our diverse end market exposure provide the board with confidence of achieving further progress in the full year."The integration of Soldo and Schischek, acquired in November 2012 and January 2013 respectively had resulted in both businesses making a positive contribution in the period, while Tuesday's additions in Italy and the US both strengthen existing operations for an overall consideration of what is understood to be close to £10m.Net cash balances of £41.6m were £18.3m lower than December 2012 and a 10.1% increase in the interim dividend was proposed at 18.05p per share.Jefferies said the results were slightly ahead of its expectations. "Rotork's interim results are a touch ahead of our forecasts (especially the Controls division), and we are mildly encouraged by the group's outlook statement and ongoing acquisition activity," the broker said.Analysts Andy Douglas and Stoyko Moev added: "Rotork is a class act among the UK industrials, and a continuation of the group's strong order intake highlights the group's strength in a mixed macro environment."Shares in Rotork were up 4.25% to 2,819p at 08:47 on Tuesday.OH