Records tumbled across the board at Rotork during the first half, and a bulging order book will keep the valve and control systems expert busy over the next six months, too. Still, given the shares have risen 20 per cent since late June and trade on lofty multiples, we expect nothing less.
Even weaker demand from the Indian power market and a £4m currency headwind failed to block progress - organic revenue grew 17 per cent and adjusted operating profit an impressive 23 per cent. Rotork thinks it is a temporary blip, but has shifted focus to more active industries such as water and oil & gas anyway. In fact, rising oil & gas spend in North America and eastern Europe generated double-digit sales growth at the core controls division.
Oil money also helped profits nearly double at the smaller fluid systems business, although last year's modest interim numbers probably flattered the figures this time. Comparisons for fluid systems get tougher in the second half, but the order book is up 21 per cent since December, and demand from Asia Pacific is now outstripping the Middle East. Elsewhere, there's been good growth at the gears unit, and the new instruments division is hitting targets.
Broker Peel Hunt wants adjusted pre-tax profit of £135m in 2012, giving adjusted EPS of 111p (£116.5m and 95.8p in 2011).
ROTORK (ROR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,215p | MARKET VALUE: | £1.92bn | |
| TOUCH: | 2,212-2,216p | 12-MONTH HIGH: | 2,274p | Low: 1,416p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 282p* | NET CASH: | £56m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 199 | 49.6 | 40.9 | 14.5 |
| 2012 | 246 | 58.1 | 47.8 | 16.4 |
| % change | +23 | +17 | +17 | +13 |
Ex-div: 29 Aug Payment: 28 Sep *Includes intangible assets of £102.5m, or 118p a share | ||||
