Rotork lifts dividend despite drop in 2015 profit and revenue

Industrial components manufacturer Rotork lifted its full year dividend and expressed confidence in the medium-term outlook, despite posting a drop in 2015 profit and revenue amid challenging markets.

For the year to the end of December, adjusted pre-tax profit fell 21.4% to £122.8m on revenue of £546.5m, down 8.1%.

Still, the company lifted its full year dividend by 0.8% from 2014 to 5.05p.

Chief executive Peter France said: “The challenging market conditions that we saw in the first half of the year continued for the remainder of 2015, with many of our key markets and geographies impacted by the weakness of the oil price, political instability and the slowdown in China.

"We were encouraged by the progress of our accelerated cost management programme in 2015 and further actions to mitigate the effect of end market weakness will remain a key focus in the current year.”

The company said that by continuing to implement its strategy for growth and targeted investment it is ensuring it is well placed to make further progress over the medium to long term.

Rotork said the results were in line with its trading update guidance in September and November.

Investec, which rates the stock at ‘sell’, said the results were “much as expected”.

“In view of recent news from the Oil & Gas sector, nothing in Rotork’s results came as a great surprise,” the brokerage said.

“Rotork remains robust in terms of market position, premium margins, lean operation and strong balance sheet, but there are challenges across the board. Not the least of these is balancing the long-term health of the group against shorter-term operationally-geared pressures stemming from lower volumes and pricing pressures.”

At 1017 GMT, Rotork shares were up 15% to 183.82p.