Rotork Q1 order intake and revenue rise, reiterates FY expectations

Actuator manufacturer and flow control company Rotork reported a rise in order intake and revenue for the first quarter as it reiterated its expectations for the full year.

In a trading update for 1 January to 2 April, Rotork said group order intake and revenue rose 19.7% and 14.5% respectively, benefiting from favourable exchange rates and the contribution from acquisitions.

Currency contributed 13.7% to order intake and 13.1% to revenue, while acquisitions contributed 3.3% to order intake and 2.7% to revenue. On an organic constant currency basis, order intake was up 2.7% and revenue was down 1.4%. The order book at 2 April was £203.3m, 12.5% higher on an organic constant currency basis than at the end of December 2016.

On an OCC basis, the group saw improvements in order intake in its Controls and Fluid Systems divisions, albeit against soft comparatives, particularly for Fluid Systems, while Gears and Instruments order intake was lower than the previous year.

“The end market trends seen towards the end of 2016 continued in the first quarter of 2017. Oil and gas remained challenging, with weakness evident in the downstream sector, although we have seen an improvement in levels of activity in upstream and midstream.

“There was good activity in the power and industrial markets while water remained flat. Geographically, we saw growth in the Middle East and parts of Asia while parts of North America, Europe and Latin America remained subdued. We remain well placed internationally to benefit from opportunities in our key markets.”

Rotork had net debt of £44.7m at 2 April 2017, versus £55m at the end of December.

Looking ahead, it expects any near-term growth in energy markets to remain modest. However, the company said its strategy of expanding its end markets and products organically and through acquisition has resulted in a strong product portfolio, diverse end market exposure and a geographic presence that will generate continued opportunities.

Revenue is expected to be weighted to the second half of the year as usual and first half margins are expected to be lower than those for the comparative period. Nevertheless, Rotork said it was well placed to make progress this and management expectations for the full year are unchanged.