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Sterling strength hits Rotork

RESULTS: The strength of the sterling has sullied decent underlying growth in sales and profits at valve-tap manufacturer, Rotork
August 6, 2014

Rotork (ROR) is undoubtedly a British engineering success story. The company has been a leading manufacturer of actuators (valve-control devices) for decades and has established sales channels in 90 countries around the world. But this year, for exporters, it has not paid to be British.

IC TIP: Hold at 2,790p

The strength of the sterling knocked £23.5m off revenue and shaved £6.8m off adjusted operating profit, leaving it marginally down at £69.1m. Yet this masked good underlying growth across the business. Like-for-like sales, after adjusting for currency effects, rose 4.4 per cent, while Rotork's order book climbed 7.4 per cent since December. Three acquisitions in the second half of 2013 and the purchase of a Korean maker of valve positioners in March 2014 contributed an additional £10.7m of revenue during the period. And post-period-end, Rotork picked up Xylem Flow Control for £18m.

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