A lot was expected of valve control specialist Rotork, and these impressive results were just enough to satisfy the City – business improved in all divisions and customers are now making positive noises.
A 17 per cent rise in underlying operating profit to £115.9m was little surprise and, despite a small dip due to acquisitions, adjusted operating margin of 26 per cent remains among the best in the sector. Meanwhile, a drop in the order book since the half-year to £157m was blamed on the timing of certain projects. Relentless demand from the oil and gas industry guaranteed 17 per cent growth in profits at the core controls division, to £92.1m, and record operating margins of 33 per cent. But fluid systems grew fastest, even when acquisitions are stripped out – largely thanks to a stunning second half that generated over two-thirds of the division's annual profit of £17.1m. And a 15 per cent second-half margin there made up for a weak first-half margin, too. Management also has high hopes for the new instruments unit, headed by 2011 acquisition Fairchild, where margins are more impressive.
Broker Numis Securities expects adjusted pre-tax profit of £128.7m in 2012, giving adjusted EPS of 106p (from £116.5m and 96.2p in 2011).
ROTORK (ROR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,066p | MARKET VALUE: | £1.79bn | |
| TOUCH: | 2,063-2,066p | 12-MONTH HIGH: | 2,109p | LOW: 1,416p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE | 258p* | NET CASH: | £48.5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)† |
|---|---|---|---|---|
| 2007 | 236 | 57.3 | 45.6 | 21.7 |
| 2008 | 320 | 75.8 | 62.0 | 26.0 |
| 2009 | 354 | 90.9 | 74.2 | 28.4 |
| 2010 | 381 | 97.9 | 80.5 | 32.5 |
| 2011 | 448 | 113 | 93.0 | 37.3 |
| % change | +18 | +15 | +16 | +15 |
Ex-div: 11 Apr Payment: 21 May *Includes intangible assets of £106.8m, or 123p a share †Excludes special dividends: 11.5p in 2011, 2010, 2009 and 2008 and 9.3p in 2007 | ||||
