News that Rotork's (ROR) veteran chairman will retire in April didn't dampen investor sentiment towards the manufacturer of industrial valve controls. Indeed, the shares climbed 6 per cent on results day after the engineer fended off fierce currency headwinds to post increases in all its reported figures.
Chief executive Peter France points to Rotork's three acquisitions - which broadened its product portfolio and strengthened its overseas presence - as the driving force behind these record full-year results. Together, they spurred a 4 per cent increase in adjusted operating profits to £157m, and even helped widen the company's already impressive margins by 20 basis points to 26.4 per cent.
The integration of Korea-based Young Tech, meanwhile, increased Rotork's exposure to emerging markets and global trends such as population growth and urbanisation. Mr France reckons demand for cleaner energy, greater fuel efficiency and improved resource usage should partially offset the impact of a plummeting oil price.
Oil and gas represents 57 per cent of group revenue, but Mr France is yet to see any noticeable impact on customer orders. Most of Rotork's exposure, he says, is to less vulnerable downstream markets, although a sharp decline in energy prices could be harmful to the group's upstream prospects.
Broker Investec has placed its forecasts under review, but previously expected adjusted EPS to grow 6 per cent to 131.7p in 2015.
| ROTORK (ROR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,600p | MARKET VALUE: | £2.3bn | |
| TOUCH: | 2,596-2,600p | 12-MONTH HIGH: | 2,890p | LOW: 2,146p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 434p* | NET CASH: | £46.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010** | 381 | 98 | 81 | 32.5 |
| 2011** | 448 | 113 | 93 | 37.3 |
| 2012 | 512 | 124 | 103 | 43.0 |
| 2013 | 578 | 138 | 115 | 48.1 |
| 2014 | 595 | 141 | 119 | 50.1 |
| % change | +3 | +2 | +3 | +4 |
Ex-div: 9 Apr Payment: 18 May *Includes intangible assets of £222m, or 255p a share **Excludes special dividends: 11.5p in 2011 and 2010 | ||||
