Rotork order intake shows 'sequential improvement' in Q3

Manufacturer Rotork said on Wednesday that third-quarter order intake had shown "sequential improvement", with declines being slightly less than the 15.6% seen in the first half of the year.

Rotork stated that third-quarter revenues were at 97% of the 2019 level on an organic constant currency basis, an improvement on the first-half's 9.6% year-on-year decline, with reduced activity at Rotork Site Services accounting for much of the drop.

The FTSE 250-listed firm highlighted that the majority of its activity was driven by customers' operational expenditure, rather than capital expenditure, allowing it some breathing room as clients continued to spend on automation and environmental projects, as well as maintenance and refurbishment. However, the group did acknowledge that large project activity had "remained subdued".

Oil and gas sales declined, with revenues higher in Europe, the Middle East, Africa and the Asia-Pacific region but lower in the Americas, as trading conditions remained "mixed".

Rotork also pointed out that it had remained "highly cash generative", with a strong balance sheet and £146.8m of net cash as of 1 November after paying an interim dividend back in September.

"The group's performance in the first ten months has demonstrated the improved resilience of the business," said Rotork.

"Although there remains uncertainty on the continuing impact of the Covid-19 pandemic, and risks of temporary factory closures and logistics issues, we expect 2020 adjusted operating profit to be at, or slightly above, the top end of the range of current market expectations."

As of 0830 GMT, Rotork shares were up 2.22% at 325.06p.