6th Aug 2019 08:44
(Alliance News) - Rotork PLC on Tuesday said it expects further margin progression in 2019 as it posted a drop in first half revenue and profit mainly on stronger comparatives.
"Whilst macroeconomic uncertainty remains, with recent order intake and the momentum of our Growth Acceleration Programme, we now expect to deliver flat sales on an organic constant currency basis in 2019, with full-year adjusted operating margins showing clear progress year-on-year," said Chief Executive Officer Kevin Hostetler.
In 2018, organic constant currency revenue was up 11% and adjusted operating margins stood at 21.0%.
"We are committed to delivering sustainable mid to high single digit revenue growth and mid 20s adjusted operating margins over time, and are pleased to report good progress in H1 despite sales, as expected, reducing year-on-year," Hostetler added.
Shares in Rotork were trading 7.6% higher at 304.70 pence each in London.
The company, which manufactures electric, pneumatic and hydraulic valves, posted pretax profit of GBP52.2 million for the six months to June 30, down 4.5% from GBP54.7 million in the year-ago period, on revenue of GBP318.6 million and GBP331.0 million, respectively.
Order intake dipped 0.6% to GBP362.5 million from GBP364.7 million. Adjusted operating margin increased to 21.1% from 19.8%, benefiting from the company's ongoing business improvement programme, or Growth Acceleration Programme.
Rotork said order intake and revenue for the first half was lower year-on-year due to strong comparative period which included several large projects.
The company added that it continues to experience some delays in the placement of large project orders, with pattern of order intake remaining uneven and market environment uncertain.
Rotork has decided to increase its interim dividend by 4.5% to 2.3p, saying this reflected confidence in progress for the full year.
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