Rotork profit down as underlying revenue drops

Rotork reported a drop in full-year pre-tax profit and adjusted operating profit as underlying revenue fell, but noted an improvement in the trading environment.

For the full-year 2016, pre-tax profit fell to £91.1m from £101.9m, with underlying revenue down 8% to £502.6m, pushing adjusted operating profit down to £120.6m from £125.3m.

Rotork said 2016 saw a return to a more stable trading environment for the company following the sharp downturn in oil and gas markets in the second half of 2015.

While there has been some improvement in market sentiment following a modest recovery in the oil price, activity levels in the group's oil and gas markets remain below those seen before the downturn.

The company said that although the trading environment improved, there was increased geopolitical uncertainty, namely in Europe and the US following the outcome of the EU referendum and the US Presidential elections.

Still, order intake was up 9.6% on the previous year thanks to contributions from acquisitions and currency tailwinds.

The company declared a full-year dividend of 5.10p, up from 5.05p the year before.

During the year, Rotork completed the acquisition of Mastergear, which operates from basis in the US, Italy and China and sits within the Gears division.

Chief executive Peter France said: "In the second half of 2016, the trading environment saw some stabilisation and we benefited from a strengthening currency tailwind. The acquisitions completed in 2015 and 2016, along with the introduction of a number of new products, also supported our growth.

"We anticipate that any near-term growth in energy markets will remain modest. Our focus will remain on providing our customers with innovative, high quality products and services, reducing their cost of ownership and improving plant efficiency.

"Cost management will remain a priority in the current year as we look to mitigate any inflationary pressures through our highly flexible operating base."