Rotork confirmed its reputation as the bluest of the blue-chip engineers with yet another set of record sales and profits. The Bath-based company is what all UK engineers now aspire to be: the global leader in a high-tech niche, with a focus on high-margin design and assembly rather than manufacture. Rotork's speciality is actuators - control systems for valves - which it sells mainly to oil groups, power stations and water treatment plants.
The company's core electric-valve division, Controls, barely felt the recession and posted a 4.2 per cent sales increase as its clients in Europe and the Asia Pacific region continued to invest. The division's operating margin of 32.7 per cent was also a record and should be supported in future by a factory opening in Bangalore.
These achievements did mask weakness in the smaller divisions. Fluid Systems, which supplies actuators for fluid-power valves, reported flat revenues and lower margins, but trading should now improve with its order book up 18 per cent in the past six months, including the acquisition of a US nuclear power specialist called Hiller. Revenues at Rotork Gears, which focuses on valve gearboxes, actually fell over the period, though that trend, too, should now reverse as orders are up 21 per cent year-on-year.
Numis Securities expects full-year pre-tax profits of £98m and EPS of 80p (£91.5m and 74.9p in 2009).
ROTORK (ROR) | ||||
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ORD PRICE: | 1478p | MARKET VALUE: | £1.3bn | |
TOUCH: | 1476-1480p | 12-MONTH HIGH: | 1,537p | LOW: 868p |
DIVIDEND YIELD*: | 2.0% | PE RATIO: | 19 | |
NET ASSET VALUE: | 214p | NET CASH: | £86.5m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
---|---|---|---|---|
2009 | 180 | 44.4 | 36.1 | 11.15 |
2010 | 184 | 47.5 | 38.8 | 12.75 |
% change | +2 | +7 | +7 | +14 |
Ex-div:01 Sep Payment:24 Sep *Excluding a special dividend of 11.5p per share for 2009 |