4th Mar 2019 08:40
LONDON (Alliance News) - Shares in valve-maker Rotork PLC were at the bottom of the FTSE 250 Monday despite hiking its 2018 dividend on the back of higher profit and revenue, after it forecast weaker growth in 2019.
Shares in Rotork were 7.5% lower at 273.70 pence on Monday.
In 2018, pretax profit jumped 50% to GBP120.7 million from GBP80.6 million the year prior. This was after revenue rose 8.3% to GBP695.7 million from GBP642.2 million in 2017, with organic constant currency revenue strong at 11%.
Profit performance also was helped by a sharp fall in administrative expenses to GBP189.5 million from GBP202.2 million the year before, which included a number of one-off costs.
On an adjusted basis - excluding exceptional costs - pretax profit widened 15% to GBP143.8 million from GBP124.8 million the year before, up 18% on an organic constant currency basis.
Rotork proposed a 3.70 pence per share final dividend, up 10% from 3.35p the year prior. For the full year, the dividend rose 9.3% to 5.90p from 5.40p the year before.
"This is a very exciting period for Rotork," Chief Executive Officer Kevin Hostetler said. "We have mapped out and are now executing a comprehensive plan to return Rotork to the levels of growth and margin performance previously experienced by the group, and to do this on a sustainable basis throughout the cycle."
"We have assembled a capable management team, comprising new and existing talent," Hostetler added. "We have a strong balance sheet, with opportunities to improve on an already strong track record of cash generation, providing scope to further accelerate progress."
"Following double-digit organic constant currency revenue growth in 2018, and mindful of macroeconomic uncertainty, we are planning for slower growth in 2019," Hostetler cautioned.
"Based on our current assessment of project phasing, we expect to deliver modest sales growth on an [organic constant currency] basis in 2019, with lower year on year sales in the first half reflecting the strong comparator period," Hostetler added.
"Margins will benefit from the restructuring plans under our Growth Acceleration Programme and the implementation of additional cost saving initiatives," Hostetler continued. "Overall, we expect full year margins to show progress on 2018."
In 2018, adjusted operating margins expanded to 21.0% from 20.3% in 2017.
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