Rotork H1 profit hit by Covid but 2019 dividend reinstated

Rotork reported a 4% decline in first-half profit on Tuesday as revenues were dented by the Covid-19 pandemic, but the industrial flow control equipment maker reinstated its previously-deferred final dividend for 2019.

Pre-tax profit fell to £50m from £52.2m in the first half of last year, with revenue down 11.1% to £283.2m and order intake 17.1% lower at £300.5m.

Revenues were lower mainly because Covid disrupted production facilities and Rotork Site Services, but rose sequentially through May and June. Meanwhile, the reduction in order intake reflected "a sharp reduction in global economic activity, the strong comparative period and extreme volatility in hydrocarbon prices", it said.

On the upside, profit margins were 50 basis points higher, benefiting from continued execution of the company’s growth acceleration programme, cost mitigation actions, reduced discretionary spend and mix.

The company withdrew its forward guidance for the current year at the end of March due to Covid-19. "We retain this position as considerable uncertainty remains, and therefore we are not announcing a dividend in respect of this period today," said chief executive Kevin Hostetler.

However, it will be paying the previously deferred 2019 final dividend of 3.9p per share.

Hostetler added: "Whilst the outlook for our end markets remains uncertain, we entered the second half with our production facilities operating at close to normal output levels, a solid order book and the considerable flexibility provided by our strong balance sheet. We are confident that we will successfully navigate the current challenges and will be a stronger business going forward."