Final Results

Rotork PLC
03 March 2008


3 March 2008

                                 Rotork p.l.c.

                            Preliminary Announcement

      Double digit growth in revenue and operating profit in each division

                                     2007             2006          % change          % change
                                                                                     (constant
                                                                                     currency)

Revenue                           £235.7m          £206.7m            +14.0%            +17.5%
Operating profit                   £55.4m           £45.1m            +22.8%            +29.1%
Profit before tax                  £57.3m           £46.1m            +24.3%            +30.5%
Earnings per share                 45.6 p           36.4 p            +25.3%            +31.5%

Financial Highlights

  • Record performances in revenue and profits in all three divisions
  • Record order book up 29% at £98m
  • Recommended final dividend of 14.0p, up 20%
  • £10m additional interim dividend during 2008

Operational Review

  • Rotork Controls operating profit up 18%
  • Rotork Fluid Systems achieved 15% return on sales and 33% growth in
    operating profit
  • Strong growth achieved by Rotork Gears - operating profit up 57%
  • Margin improvement across all divisions
  • Chinese market still buoyant


Chief Executive Bill Whiteley, commenting on the results said:

'In 2007, Rotork celebrated its 50th Anniversary in style with end user and
geographic markets very active throughout the year. The rate of investment in
infrastructure in energy and water projects continued to increase, which
benefited all three of our operating divisions.'

'Projects across nearly all of our geographic and end user markets remain
active. Order intake at the start of the year has been particularly buoyant,
including a strong start from our North American and Chinese operations. In
contrast with recent years, it would appear that our trading results are likely
to be enhanced by a more favourable currency environment in 2008.'


For further information, please contact:

Rotork p.l.c.                                      Tel:  [phone]
Bill Whiteley, Chief Executive
Bob Slater, Finance Director

Financial Dynamics                                 Tel:  [phone]
Sophie Kernon / Jon Simmons
Chairman's statement



Financial highlights

The past year has seen Rotork celebrate its 50th anniversary in a period when
strong trading in each of our underlying markets has enabled us to achieve
record results and a sound position from which to enter 2008. We have passed a
number of milestones including record performances in terms of revenue and
profits from each of the three operating divisions and finished the year with
our highest ever reported order book, up 29% at £98m. Total sales revenue was
£236m, up 14% on 2006, and profit before tax increased by 24% to £57.3m. The
trading figures are after the negative impact of currency in a year where the
weakening US dollar reduced the value of part of our earnings. However, in spite
of this currency headwind, we were still able to improve operating profit margin
from 21.8% to 23.5% due to operational gearing and the robustness of Rotork's
business model. At constant currency, sales revenue and profit before tax
increased by 18% and 31% respectively.

Divisional highlights

Rotork Controls

The oil & gas, power and water markets, which the Controls Division serves,
continued to be active in the year particularly in Asia and Europe. The new
production facility in Shanghai had a successful first full year in operation
and met all of its goals. This facility will be of increasing significance in
supporting the important Chinese market in the future.

The division increased revenue to £164m, up 11% on the prior year with operating
profit at £44m, up 18%.We now believe that the mix of facilities that we have in
the Controls Division across the world gives us the capacity to support our
customer base in each of our markets for the foreseeable future. New marketing
initiatives took place in the year and we opened our first direct presence in
Brazil.

Rotork Fluid Systems

Rotork Fluid Systems continued its pattern of strong growth established over the
last few years, and expanded its share of the available market as well as
capitalising on the significant investment currently being seen worldwide in the
markets for its products. Sales revenue grew 18% to £48m and operating margin
achieved our 15% target. We are increasingly being seen as providing the
actuator of choice by leading industry participants. This has been helped by our
exacting approach to product quality, constant investment in facilities and
products, and our drive to bring technology originally developed for our
electric actuator products into our Fluid Systems product offering.

Rotork Gears

Rotork Gears produced strong results in the year, with sales revenue up 31% at
£32m and operating profit up 57% to £7m. We are now the largest manufacturer of
products of our type, and have production facilities in five countries in
Europe, the US and Asia. We can effectively offer a local service to customers
wherever they are based from our global facilities. We are continually improving
products and services, and developing new products for use on standard and
specialist applications. The net margins in this business have increased as we
continue to improve efficiency and reduce costs.

Cash

Cash generation in the year has been strong due to the buoyant trading position
and good control of working capital. In addition, except for a £2m additional
contribution to the UK final salary pension scheme, there have been no unusual
cash outflows in the year with the result that cash balances increased at the
year end to over £38m. Subsequent to the year end, we announced two
acquisitions. The acquisition of Remote Controls Sweden was completed on 30
January 2008 for a consideration of £13m. Much smaller, but strategically
important, was the acquisition of the intellectual property and business of the
Drallim SVM product on 13 February 2008, for £630,000. Both of these
transactions were settled for cash.

Dividend

The Board is recommending an increase in the final dividend for 2007 and the
payment of an additional interim dividend for 2008. The final dividend for 2007
of 14.0p per share (an increase of 20% year on year) will be paid on 9 May 2008
to shareholders on the register on 18 April 2008. A one off additional dividend
of £10m (11.5p per share) will be paid on 18 July 2008 to shareholders on the
register on 27 June 2008.

Performance and risk

In his Business Review, the Chief Executive discusses the application of the
Group's approach to performance measurement through KPIs, our approach to the
assessment and mitigation of risk, and how we ensure that we have correct health
& safety procedures, and environmental policies. We take great care to deal with
these matters responsibly, ensuring that controls and processes are embedded in
working practices where possible and that reporting is prompt and transparent.
Our increased disclosure this year underscores the importance which we attach to
these matters.

Board Changes

John Matthews has been Senior Independent Director since joining the Board in
1998 and for much of this time has chaired both Audit and Remuneration
committees. Having now completed nine years on the Board, John will retire at
the forthcoming AGM. He leaves with our best wishes and appreciation for his
much valued advice and support.

I am pleased to welcome John Nicholas to the Board as a non-executive Director.
John is currently Group Finance Director of Tate & Lyle plc prior to which he
held the same position at Kidde plc. He will chair the Audit Committee and be a
member of both the Nomination and Remuneration committees.

Bill Whiteley

Bill Whiteley, who will retire at this year's AGM, has been a director of Rotork
p.l.c. for twenty-four years, the last twelve of which he has served as Chief
Executive. During his tenure as Chief Executive, Bill has led the Group to
outstanding success and, consequently, its world leadership position in its
specialised sector and its position as a highly rated constituent of the FTSE
250. He leaves a strong and experienced executive team who under the leadership
of his successor, Peter France, are well placed to deliver further growth. On
behalf of the Board I extend to Bill our appreciation and gratitude for his
enormous contribution and wish him well for the future.

Outlook

Projects across nearly all of our geographic and end user markets remain active.
Order intake at the start of the year has been particularly buoyant including a
strong start from our North American and Chinese operations. In contrast with
recent years it would appear that our trading results are likely to be enhanced
by a more favourable currency environment in 2008.

Roger Lockwood
Chairman
29 February 2008


Business review

Business Overview

For over 10 years Rotork has been the world leader in actuation solutions for
the oil & gas, power and water & waste water treatment sectors of the capital
goods market. Our products are also used in a wide range of applications in a
variety of industries, including shipboard control systems, ventilation and air
handling control. Rotork is a genuinely global business, with both marketing and
production operations across the world. We are known for our ability to support
customers in the field at very short notice from our own resources. Rotork has a
reputation for innovative solutions to complex problems and our product
development history has shown a pattern of improving the efficiency, quality and
cost effectiveness of the product through the application of technology. This,
and a constant drive to improve customer support, has lead to us being the
number one heavy duty actuator group in the world. We are structured around
three divisions:

  • Rotork Controls, the original and largest division supplying high quality,
    state of the art electric actuator products for controlling industrial
    valves;
  • Rotork Fluid Systems, which supplies heavy duty pneumatic and hydraulic
    valve actuators for operation in plant control, emergency shut down and
    other critical applications, primarily for the oil & gas sector;
  • Rotork Gears, a world leader in the supply of gearboxes, adaptors and
    ancillaries for the valve industry.

Rotork supports customers across the world mainly through directly owned
operations. We have 14 production plants internationally and multiple direct
sales and support operations in 22 countries. This, together with an extensive
network of indirect sales offices, gives total coverage of our customers and
markets globally. We have around 12,000 active customers.

The key drivers for the Group's businesses relate to investment in oil & gas,
power generation and water & waste water installations around the world with
demand being generated by new and expanded capacity, upgrades to existing
facilities and replacements. This is often linked to projects which are aimed at
improving the efficiency, safety and environmental performance of plants. Valve
actuators are critical components and their long-term reliability and
performance is extremely important to users. They also act as a key interface
between plant control systems and related hardware. Rotork's reputation for
quality, worldwide support and technical innovation is crucial to its leadership
position in the field. The broad geographic spread of our operations and
applications means that we have a large number of repeat customers around the
world and no one customer accounts for more than 5% of our revenue in any year.

Business Strategy

The objective of Rotork p.l.c. is to increase shareholder value by developing
its leadership position in worldwide valve actuator activities. The Group's
businesses are focused on the specialist area of valve automation. The origins
of the Company go back to the 1950s and over its 50 years in this business
Rotork has continued to build on its reputation as an innovator of new concepts
in this field and has provided users with increasing levels of functionality,
performance and assurance. Our strategy of providing modern innovative products
that leverage technology, while remaining focussed on the technical applications
that our customers need, has enabled us to provide quality solutions to the
industries that we serve. We have been able to do this partly as a result of our
methodology of selling directly to our end user customers and their technical
advisers. This ensures that, where possible, plant specifications have the
correct products for the application and support the customer's need for plant
efficiency and control.

The Group's recent strategy has focused on opportunities to leverage our
leadership position in heavy duty electric actuation into other closely
associated areas of valve automation. Key programmes relate to the development
of products and control systems, marketing initiatives, creating service revenue
opportunities and driving cost reductions relating to these businesses. The most
important current product initiative relates to the development of our range of
actuators aimed at the process control market.

Year Under Review

In 2007, Rotork celebrated its 50th Anniversary in style with end user and
geographic markets very active throughout the year. The rate of investment in
infrastructure in energy and water projects continued to increase which
benefited all three of our operating divisions. Overall order intake was up
12.6% and revenue up 14.0%. The order book increased to £97.6m which is 28.5% up
on the start of 2007. Profit before tax was up 24.3%. Return on sales, a key
performance indicator of the business, increased to 24.3% from 22.3% last year.

Rotork Controls

Revenue from our electric actuator division, Rotork Controls, increased by 11.1%
to £164.2m while operating profit rose by 17.6% to £43.5m. At constant
currencies these increases would have been 15.4% and 23.7% respectively. As a
percentage of unit actuator order input, the principal markets for electric
actuators were: oil & gas 39% (2006: 40%); water 22% (19%); power 31% (32%) and
miscellaneous 8% (9%). As can be seen the end user markets were similar to the
prior year but with an above average increase in the number of actuators going
into the water market. This was driven by growth in the markets worldwide and
improved penetration in some key markets.

UK Operations

We continued to see good levels of business emanate from the UK, with the water
market benefiting from AMP4 investment requirements laid down by the regulator
and the power market from the large Combustion Plant Directive.

There was a strong sales and profit performance from the main electric actuator
assembly plant in Bath, which was assisted by continuing sourcing initiatives
limiting the cost of component increases. We are looking for additional
initiatives in 2008 to continue to mitigate cost pressures.

Europe

The European sales and support companies all increased profits from the prior
year, with particularly strong performances in Italy and Germany. Europe
accounted for 16% of the total input units against 13% in 2006. Work on existing
oil & gas installations was active throughout the region; in particular we
benefited from increased investment in oil and product storage facilities. Our
business in the water market in continental Europe also continued to grow, with
our French subsidiary making encouraging progress. Elsewhere our relatively new
Russian sales company continued to develop its business while the Dutch company
doubled the size of its facility to enable it to expand its factory fit and site
service capabilities. The European businesses also benefited from increased
business from valvemakers in their territories. The Italian valvemakers, in
particular, had extensive order books built on the high level of worldwide
energy projects, particularly those being built in the Middle East.

The Americas

Rotork Controls Inc had a number of challenges entering 2007, which included a
high hurdle set by its prior year profit performance, a softening US$ and an
economy which was displaying weaknesses in some areas. Against this background,
the company performed well and continued to benefit from investment in water &
waste water treatment facilities. It also benefited from the US valve industry's
competitiveness on international projects. US Process Controls saw a good
recovery of its business, mainly based on improved sales to the power companies.

The Canadian company had a disappointing year, due to slower than expected
project activity, especially in the West. The Venezuelan subsidiary continued to
face difficult challenges in what is potentially a promising market for our
products.

For the Americas, order input in units increased in total but reduced to 16%
from 17% of the Group.

Asia Pacific and the Rest of the World

Asia continued to be a major engine for growth for the business. Asia Pacific
accounted for 50% of the input of electric actuators up from 49% last year.
China continued to be the most important contributor with increased levels of
business. The Indian market maintained the high levels of business seen in 2006,
driven by investment in power generation and large refinery projects. Our
electric actuator manufacturing plants in Kuala Lumpur, Shanghai, Chennai and
Bangalore all performed well and achieved increases in profits.

Elsewhere, the Singaporean, Malaysian and Thai sales companies all saw increased
levels of business as did those in Japan and Korea. The latter did well to
overcome some local difficulties and ended the year with a stronger operation.

The Australian operation continued to perform well while the turnaround in the
fortunes of our South African company, which made a loss in the prior year, was
also most encouraging.

Rotork Fluid Systems

Rotork Fluid Systems, which designs, assembles and markets pneumatic and
hydraulic valve actuators continued to achieve exceptional growth. The main
markets served by our products are oil & gas related and unlike electric
actuators the majority are used on upstream applications, transmission and LNG
plants and terminals. These markets continue to benefit from high levels of
investment. A notable success was winning substantial orders on the very large
Shell GTL (Gas to Liquids) Pearl project in Qatar. The principal assembly plant
is based in Lucca, Italy, with products also assembled in Rochester, N.Y. and
Melle in Germany. The division had two long-term key performance goals. Firstly
to achieve 20% of Group revenue and secondly a 15% return on sales. It just
achieved both of these objectives this year, having narrowly missed the revenue
target in 2006 (19%) and increased return on sales from 13.3% to 15.0% in 2007.
This is despite its main cost base being in euros and the euro/dollar rate
having averaged $1.38 against a prior year of $1.26.

Order input was 34.6% up on the prior year, while revenue increased by 18.3% to
£47.9m and operating profit was up 33.3% to £7.2m.

The Italian operation performed very well and we increased our investment in the
facility, improving the office area and installing an upgraded ERP system both
there and in the plant in Melle.

The product range was extended and improved, while further progress was made in
gaining additional customer and market approvals. The division had increasing
success on projects requiring engineered solutions particularly in the
electro-hydraulic (EH), gas over oil, linear and subsea product areas. A notable
success was the large EH order for the Aramco Khurais project in Saudi Arabia.
The US operation also benefited from the upsurge in engineered solutions
business.

The division's global capabilities continued to be enhanced, mainly through the
development of the Group's worldwide sales companies and offices. Among these,
the UK based operation in Leeds and the Spanish office had excellent results.

The acquisition of Remote Controls Sweden was completed on 30 January 2008 for a
consideration of £13m. This company, which is based in Falun, Sweden, was
established in 1961 and has a worldwide reputation for supplying high quality
lower torque actuators to a wide array of markets. These products complement the
mainly heavy duty products of the existing RFS ranges and will be sold through
Rotork's worldwide network of sales offices.

The acquisition of the Drallim SVM partial stroke and valve monitoring patented
product for £630k on 13 February 2008 provides the division with a platform to
further develop products for safety critical applications. Rotork has sold the
SVM product for some years and sees the demand for this type of diagnostic
system increasing due to its ability to improve plant safety and productivity
while also reducing plant capital costs.

Rotork Gears

Rotork Gears manufactures gearboxes, adaptors and other ancillary devices for
industrial valvemakers worldwide. Through these valvemakers it serves a wide
variety of end user industries.

Rotork Gears achieved growth well above our plans and benefited from an active
worldwide valve market, especially in Europe and America, and investment in its
worldwide operations and supply chain. Revenue was up 31.3% to £31.9m and
operating profit was up 56.5% to £7.3m. The star performers were the two main
plants in Leeds and Losser in The Netherlands. Both achieved significant growth
in revenue and profits.

Much work and investment was centred on the new Chinese facility which met an
ambitious production target and achieved a number of important milestones,
including the assembly of the updated 232 aluminium range of units and further
progress was made in opening up the Asian market.

The engineering team was re-organised to create a dedicated R&D resource and
progress was made with a number of important product initiatives. New or
improved product ranges will be launched in 2008.

One of the key objectives for the coming year will be to develop the existing
operations, those already mentioned plus the operation in Italy; firstly to
ensure that the business continues to increase capacity to improve service
levels to our customers; secondly to make sure that opportunities to rationalise
production and reduce costs are delivered.

Key Performance Indicators ('KPIs')

Rotork has a culture of customer service and support and this ethos is reflected
in the way that the business is controlled on a day to day basis. We manage the
operations through targets primarily related to trading activities and have well
established systems and procedures to support this. KPIs have long been used to
aid management in monitoring progress in achieving its objectives. Most targets
are financial KPIs but more recently we have developed a similar approach to non
financial issues connected with areas such as environmental matters and health &
safety.

Rotork's philosophy of product assembly only, using sub contractors to
manufacture components, gives significant flexibility in the production model
and KPIs assist in monitoring the efficiency of this model. Management's focus
is on what we regard as the high added value activities of design, marketing and
management control. This means that our approach to measuring performance is
oriented towards success in penetrating the markets in which we operate, the
development and profitability of our products, a desire for a high return on
capital, and strong cash generation. We have produced consistent improvement in
performance in these measures through the year under review.

The Group use a range of indicators to assess performance at individual company,
divisional and Group level. The following are the main key performance
indicators at Group level showing four years performance and explanation where
appropriate of issues underlying some of the measures.

Financial KPIs

Growth of the business, market penetration and quality of earnings are crucial
target areas for Rotork and we have a number of measures of performance used
throughout the Rotork organisation. Revenue growth is a simple but effective
measure of our performance against our objectives in this area and, supported by
the relationship of our net profit to sales and the growth in earnings per
share, provides a small but powerful range of ratios that enable management to
quickly view the performance of the business and drill down to divisional level
and below to view returns. With an asset light business model, we have a target
of growth in return on capital which provides an effective view of balance sheet
performance and each of the divisional businesses review this. Conversion of
profit into cash has a high priority within the Group and is embedded within
reward schemes at divisional management as well as Group level.

Sales revenue growth

This is reported in detail for all operating businesses and is a key driver in
the business. These measures enable us to track our success in specific project
activity and our progress in increasing our market share by products and region.
This also is an important driver in our product development programme.

2007: 14.0%, 2006: 18.2%, 2005: 19.0%, 2004: 8.0%.

Return on sales

This is calculated as profit before tax (after financing and interest) shown as
a percentage of sales revenue. This measure brings together the combined effects
of procurement costs and pricing as well as the leverage of our operating
assets. Our overall aim is for continuous improvement over time, notwithstanding
the impact of currency.

2007: 24.3%, 2006: 22.3%, 2005: 21.0%, 2004: 21.4%.

Cash generation

The conversion of profit into cash is an important measure for Rotork. This is
calculated as the ratio of operating cash flow to operating profit. Operating
cash flow is defined as the movement in cash and cash equivalents, adjusted to
add back cash flows from financing activities, the acquisition of subsidiaries,
income taxes paid, exceptional cash outflows and less interest received. It is
used internally as a measure of performance where a target of 85% is regarded as
a base level of achievement. This also forms one of the constituent parts of the
reward system where management is incentivised to achieve a performance beyond
this level.

2007: 99%, 2006: 102%, 2005: 101%, 2004: 86%.

Return on capital employed

Rotork has an asset light business model by design, and reporting this ratio
internally helps management at Group level to monitor our adherence to this
philosophy. The calculation shows profit before tax as a percentage of capital
employed. Capital employed is defined as shareholders' funds less net cash held,
and the pension deficit net of related deferred tax is added back.

2007: 79%, 2006: 69%, 2005: 54%. 2004: 53%.

EPS growth

The measurement of earnings per share reflects all aspects of the income
statement including management of the Group's tax rate. We aim to increase EPS
each year.

2007: 25.3%, 2006: 27.3%, 2005: 16.7%, 2004: 5.2%.

Non-financial KPIs

We monitor non-financial areas in our businesses particularly in the
environmental, health & safety and quality control areas and put strong emphasis
within our organisation on improving our performance here.

Waste recycling

This KPI measures the proportion of total waste produced which is recycled. We
have an active programme aimed at reducing our environmental footprint
throughout the organisation. We collect this information through regular
submissions through our extranet site.

2007: 57%, 2006: 46%, 2005: 38%.

Dividends

Rotork is a cash generative business and has a policy of returning funds to
shareholders where they are not required for reinvestment in the business in the
foreseeable future. The Board's policy is one of increasing dividends generally
in line with earnings. In recent years where there has been excess cash in the
business this has been distributed back to shareholders in the form of
additional dividends. In the year under review cash generation has been good and
the Board is recommending to shareholders that the final dividend for 2007 be
14.0p per share which is an increase of 20% over the prior year. In addition,
the Board is intending to pay an additional interim dividend for 2008 of 11.5p
per share, representing the distribution of £10m of excess cash. This will be
paid to shareholders on 18 July 2008, to shareholders on the register on 27 June
2008.

Treasury

The Group's treasury function in Bath manages financial risk relating to foreign
currency exposure, debtor risk and cash movements within the Group.

Rotork is affected by movements in world currencies and aims to mitigate the
effect of this through the diversity of location of production units as well as
taking action through derivative instruments. The main currency exposure results
from trading transactions between our production plants and trading companies
and customers around the world. This exposure is covered by simple forward cover
derivative instruments aimed at protecting known income streams: no speculative
or non trading hedging takes place within the Group.

The impact of currency on the results of the Group can best be seen by
converting the 2007 results to the effective exchange rates for 2006, so
comparing results at constant currency. This would have produced the following:

                                                                                2007           2006
                                                                                  £m             £m
Operating profit as reported                                                    55.4           45.1
Translation impact                                                               0.5              -
Transaction impact                                                               2.3              -
Operating profit at 2006 rates                                                  58.2           45.1


Overall we believe that profit for the year would have been approximately £2.8m
higher if the 2006 exchange rates had prevailed. The increase in operating
profit, reported as 22.8%, would have shown an increase of 29.0% at constant
currency. Weighted average rates for translation of our two main trading
currencies for the last few years have been:

                     US dollar                 Euro

  • 2002             1.52                      1.58
  • 2003             1.66                      1.44
  • 2004             1.83                      1.46
  • 2005             1.80                      1.46
  • 2006             1.84                      1.47
  • 2007             2.01                      1.45

Receivables management is done at each operating business unit but controlled
centrally in Bath. There is commonality in our customer base across many of the
geographic units and debts outside the UK are insured centrally on a limit per
customer basis, and this operates across the operating divisions. Overall we
believe a level of 65 days sales outstanding for receivables is appropriate for
our mix of business. At the year end this figure was 60 days, an improvement of
2 days compared with 2006.

Pension schemes

Over the last few years there has been a lot of focus on pension schemes,
particularly company liabilities relating to under funded legacy defined benefit
schemes. Rotork's UK final salary scheme was closed to new entrants in 2002,
when a defined contribution scheme was opened for employees joining from the
beginning of 2003. The Group has made additional contributions into the UK final
salary scheme between 2004 and 2007 and the scheme had its latest actuarial
valuation review during 2007. The results of this showed it was 98% funded on an
actuarial basis, which is precisely the position that the additional
contributions were aiming to achieve, and it is now felt that the scheme is back
in equilibrium. The main issue for schemes of this type in recent years has been
the effect of longer life expectancy, the fact that pensions in payment will
have to be paid for longer as people expect to live longer. This issue could
continue to affect schemes as mortality assumptions evolve further over the next
few years. However, management and the pension scheme trustees, with the advice
of the scheme actuary, consider that the potential for adverse mortality
assumptions to impact the scheme further is controllable within the current
range of contributions.

The impact of improved mortality is not presently anticipated to have an impact
on cash contributions beyond normally expected funding levels. In terms of the
charge to the income statement under IFRS these assumptions will have an impact
as a result of the last actuarial valuation by increasing the charge against
profit. The charge against profit before tax will increase to around £1.6m in
2008, compared with the charge of £0.7m in 2007

Rotork Community

Rotork celebrated its 50th year of incorporation with a number of marvellous
events which were attended by both past and present employees as well as others
who have had much to do with the Group's success. We also celebrated this
milestone with a publication which drew very positive comments from a wide group
of stakeholders. The events demonstrated the commitment and affection that
everyone has for the organisation which makes it such a formidable presence in
its field.

I have enormously enjoyed every aspect of my involvement with Rotork over the
past thirty-four years and feel very privileged to have led it over the past
twelve. Rotork has always had a unique spirit which I feel confident under the
talented leadership of Peter France will propel it to even greater success. I
would like to thank all of our employees around the world for their dedication,
skill, good humour and friendship and it is them that I will miss most when I
retire on May 2nd.

Rotork Site Services

Rotork has been a leading actuator manufacturer for over 50 years and its valve
actuators and gearboxes are designed to provide a significant service life,
often in arduous conditions. Long-term cost of ownership is an important factor
to our customers along with reliability, and these issues drive the choice of
Rotork over any alternative. With Rotork providing the after sales support,
customers know that the equipment will be maintained to its original
specification and operational efficiency, which is particularly beneficial where
the product is certified.

Rotork Site Services (RSS), the new projects, service and retrofit arm of the
Group which supports all three divisions, is active in 47 service centres in
over 20 countries around the world, with agents providing support services in
another 55 countries. This brings the total number of expert technicians
supporting Rotork customers to well over 1,000.

RSS provides support at plant level on all applications where our products are
used. Embedded within the site structure, and often within the customer's
operating team, our engineers can provide total support to ensure that the plant
operator gets maximum advantage from its investment. In addition, we are able to
aid the customer when investment programmes are being considered by providing
technical input to the expansion and upgrading of equipment and to ensure that
the correct equipment is considered and commissioned appropriately.

Within RSS, our aim is to make the application and utilisation of our products
and services easy whether it is by:

  • Delivering small turnkey projects to actuate existing manual valves for
    customers.
  • Refurbishing aging actuators (typically 25+ years old) to give them
    another lifetime of utility.
  • Project managing the upgrading of sites entire actuation assets and
    associated equipment.
  • Connecting actuators to valves for new build projects for valve makers and
    end customers to facilitate easier installation on site.
  • Delivering preventative maintenance programmes.
  • Availability of our engineers on a call out basis to support the
    customer's own maintenance programme

Through delivering added value services across the world we continue to
differentiate our business, strengthen relationships with our customers and
contribute to the growth in the Group's revenue and profits.

One significant area of growth in 2007 has been the uptake of multi-year
preventative maintenance contracts - particularly by the petrochemical sector
where uptime is of critical importance. We now have over 100 maintenance
contracts covering over 50,000 actuators worldwide. Through combining technology
built into our actuators, expert service engineers and data evaluation
processes, we are able to identify deterioration within a valve early. This
enables unnecessary outages to be minimised whilst focusing maintenance
expenditure where it is needed.

2008 will see RSS grow further in terms of the service centres we operate from,
the scope of the services we provide and the value we bring our customers.

Research & Development

With a significant proportion of our income derived from products introduced
within the last five years, investment in our product portfolio is an important
part of Rotork's success. In addition to continuous improvement of our main
electric and fluid power actuator ranges we have continued to invest in our
proprietary Pakscan networking system with further development of the master
station to extend its functionality and enable it to be installed outside the
protected environment of the control room. Development of a mesh based wireless
system has now reached a stage where the initial technical hurdles have been
overcome and field trials are anticipated during 2008. This is an important
development, which will enable our customers to extend their plant visibility
and control systems at very reasonable cost and with minimal disruption. The
continued development of and improvement to plant control and monitoring systems
is an important part of the drive towards more energy efficient intelligent
plant processes and Rotork has established a market leadership role in valve
actuator control systems.

The release of an optional module that enables the IQ series of products to be
used within safety instrumented systems signalled the successful conclusion of
this development. Initial market response indicates that the addition has been
well received and will assist users in complying with regulatory requirements.
Other IQ related research has focused on the use of alternate materials as a
means of reducing costs.

Work continues on the development of a variant of the IQT product for naval
applications with first shipments expected during the last quarter of 2008.

Following the extensive feasibility exercise reported last year, work commenced
at the beginning of 2007 on the detailed design of a family of actuators for the
process control market. This is an important area of development for Rotork. It
is expected that initial sizes of this product will commence production in the
second half of 2008. A marketing structure has been defined and is being built
up. Test products have been giving excellent performances at a number of Beta
sites and the launch of this new product line for Rotork is eagerly awaited.

The Fluid System division has continued to work closely with its key customers
resulting in the approval of fast acting spring return actuators suitable for
use within high integrity pressure protection systems ('HIPPS'). Such actuators
are an essential component of the safety instrumented systems required to
mitigate over pressure events. The HIPPS approach can provide environmental
benefits in the form of reduced venting to atmosphere and in some cases may
eliminate the need for flaring. Other developments have included increasing the
torque capability of the pipeline solutions to enable their use in severe
service mining applications, where the latest autoclave valves require in excess
of 5 million Nm.

Development work has also been undertaken in a combined effort between the Fluid
System and Gears divisions to provide a sea bed solution for the hydraulic
automation of subsea valves with independent manual override.

Within the Gears division a project commenced to develop a new range of manual
quarter-turn gearboxes for valve operation. The aim is to increase flexibility
as well as performance, making the product suitable for stocking and
modification at customisation centres around the world. This project is expected
to continue throughout 2008 with design and testing of a number of prototype
units already well underway.

Statement of principal risks and uncertainties

The Group has an established risk management process which works within the
corporate governance framework set out in our corporate governance statement.
The major risks affecting the Group are identified by senior management in
association with the Board and with the support of the external auditor. This
involves regular risk assessment and a process for ensuring that the Group's
approach to dealing with individual risks is robust and timely. These risks are
categorised by likely impact on the business and the likelihood of the event
occurring. They can be seen to fall into three main risk areas:

•         Risks affecting the strategic aims of the business, or those issues
that affect the strategic objectives faced by the Group

•         Financial risks - issues that could affect the finances of the
business both externally and from a perspective of internal controls

•         Operational risks - matters arising out of the operational activities
of the Group relating to areas such as procurement, product development and
interaction with commercial partners.

Principal strategic risks

As an international business, Rotork operates in all markets across the world
mainly through a direct presence but in the smaller territories through agents.
Implicit in this is the benevolent trading environment that comes with stable
regimes across the globe, and disruptions to this stability regionally could
affect our ability to trade effectively. It is not possible to fully mitigate
this as a risk but our truly global spread of business and visibility of
potential risk areas enables us to contain our exposure.

Product and control systems development which threatens our market leadership
position is a significant risk. This is an important factor driving us to
maintain technological leadership with our actuator and systems. We aim to give
customers increasingly greater control over their applications and value for
money as we enhance diagnostics, functionality and control. We also recognise
the need for global manufacturing by sourcing components across the world and
have created production facilities in lower cost areas which are often closer to
end user markets. Our successful expansion into Asia has been as a result of
recognising this. Our business model is less vertically integrated than our
competitors and we are able to take strategic sourcing and build decisions
quickly.

Principal financial risks

Foreign currency management is an important area for Rotork and the potential
for significant movements in world markets for the currencies in which we
operate present significant risks for us. There are a number of ways in which we
can approach these risks. Short-term movements are addressed using forward
exchange contracts to ensure that when we have contractual liabilities we can
effectively mitigate and fix the exposure. This does not of itself avoid the
impact of long-term trends, which are ultimately best handled through a spread
of vendor programmes across the geographical areas over which we operate. This,
plus the development of local production facilities provides natural hedging
where it is needed.

Internal control within the businesses is supported by a strong ethos of
financial internal audit which Rotork has developed over a number of years
utilising the skills of accountants from across the businesses. This methodology
ensures that we have auditors who are aware of the business issues and risks
involved in them. Independence is maintained by ensuring that any auditor with
divisional responsibility only audits companies outside their own division.

Further financial risk areas have been identified in cash control and credit
management. Both functions are centrally controlled within the Group and are
monitored through the audit process for compliance, and are reported on to the
Audit Committee.

While these are the principal risks, the risk assessment process goes far beyond
this to identify medium grade and relatively minor risks and provide a process
for their regular review aiming to give action plans to create wherever
possible, an embedded approach to the containment and management of risks in the
businesses.

Principal operational risks

Having the right people in the right place, at the right time is key for a
business like Rotork. We devote a lot of effort to developing our employees and
giving opportunities for those who want to, to develop their skills and
experience across our operational landscape. This approach to succession
planning has enabled us to identify candidates for promotion within the
businesses, ensure that the necessary training and career development programmes
are open to them and to secure a good flow of potential future management as the
Group develops.

In our risk assessment and review programme the issue of quality is a constant
theme. Quality in design, quality in component supply, and quality in production
are all under continual review. The need to maintain our deserved reputation for
the highest quality standards and customer facing approach to our markets is
fundamental to Rotork. Quality is a core part of the Rotork culture, and quality
management programmes are embedded within all of our operating procedures. We
have an active quality management function which includes regular supplier
visits and audits. This process is connected to our product development
programme for existing and proposed products ensuring that all areas of
operational experience are fed back into the design process.

As the manufacture of our components is outsourced, the relationship and support
from vendors is crucial to our business. Design of components is done
recognising the manufacturing issues involved and our vendor involvement in the
design and quality processes is an important part of how the product comes into
production and maintains its integrity. There are a number of inherent risks in
not managing these processes properly and significant effort is expended in the
Group in ensuring that this is done well. The current dual sourcing programme
for key components is an example of how we have responded to these matters and
we have introduced this seamlessly and with the support of our suppliers.

Quality & Environmental

Quality

Rotork's active quality management programme is centred on process control.
Throughout each product's life cycle, from initial concept to volume production,
every business and production process is subject to robust scrutiny.  The three
key processes are product development, component procurement and final assembly.

As customer sites become more sophisticated, their plant automation requirements
change. Rotork's Research & Development teams seek innovative means of offering
customers the enhancements they demand. Representatives from all departments
examine new designs at every stage and from every perspective; compliance with
customer requirements, ease of assembly and cost optimisation.

Control of the component procurement process is crucial. Rotork purchases
complex components to exacting quality standards, through global supply chains.
The purchasing and Supplier Quality Assurance ('SQA') functions are increasingly
international in makeup, sourcing products in the country most appropriate for
each particular commodity. A mutually supportive worldwide supply network is
being established, with local purchasing and SQA teams representing the whole
Group for component supply. SQA teams work closely with suppliers from product
inception onwards, to ensure suppliers' processes are properly controlled,
resulting in consistent and compliant parts.

The assembly process is the culmination of all the development and supplier
controls. Operator training programmes, 'mistake-proof' assembly methods, clear
instructions and world class performance monitoring tools combine to control the
build process. These controls are well established at the main manufacturing
sites and are now being rolled out to newer divisions and more recent
acquisitions.

Environment

The principal manufacturing site in Bath maintains an Environment Management
System ('EMS'), which is independently verified as compliant with the
requirements of ISO14001: 2004. The EMS was developed to identify, manage and
reduce the significant environmental aspects and ensure compliance with
environmental legislation. The Bath site is now assisting subsidiaries in
raising awareness of environmental issues and implementation of essential
controls. During 2007, Rotork Gears in Leeds implemented an EMS in accordance
with the requirements of ISO14001.

Due to the nature of the Rotork business, one of the most significant aspects is
packaging waste. To address the impact and to minimise waste to landfill, Rotork
made recycling a reportable KPI in 2006. The last year has shown continual
improvement: Group recycling totals increased to 57% in 2007 from 46% in 2006
and 38% in 2005.

Rotork sites that generate high levels of waste are being targeted for
improvement. In the second half of 2007, Rotork Gears installed recycling
systems for cardboard, wood and plastic and expect to recycle 75% of total waste
generated in 2008. Work is also in progress to reduce the waste generated at the
factory in Rochester USA, in conjunction with initiatives to increase re-use and
recycling. These two sites each generate over 200 tonnes of packaging waste per
annum.

Rotork remains committed to meeting the requirements for continued inclusion in
the FTSE4Good Index. Rotork is very conscious of the need for improved
environmental awareness and the need to minimise the Group's environmental
impacts. In 2006, Rotork reported environmental KPI data for 29 subsidiaries.
The 2007 environmental report will include KPI data from 33 subsidiaries.

Environmental reports can be found on the Rotork web site www.rotork.com

Bill Whiteley
Chief Executive
29 February 2008


Growth opportunities

Rotork is a collection of strong businesses organised within a divisional
structure to provide the best line of support to our customers. We have
pro-active management teams following common goals, allowing independent but
co-ordinated product development programmes to give the best solutions to our
customers' problems. We help guide customers through the technological
advancements that we offer to improve their processes, enhance efficiency and
reduce the environmental impact of their operations. Our products have differing
technical issues to overcome in achieving the required functionality.  However,
through co-ordinating our collective offering to the industries that we serve,
we are able to provide an homogenous integrated set of solutions that make
Rotork the provider of choice for the world leaders in the oil & gas, power and
water & waste water markets.

We have begun the process of refining the divisional structure and are now
refocusing our efforts to maximise penetration of our markets, and to develop
offerings for newer markets and those where we are not traditionally strong.
This involves re-examining parts of our product portfolio and how it integrates,
where and how we produce our products and importantly how we offer ongoing
support to customers after the initial sale is completed. Rotork has long-term
relationships with its customer base and this is a key feature of our business
model. It is the trust built up within these relationships that is fundamental
to the successful development of new and existing products.

We have for some time strengthened our offering to customers by enhancing the
range with niche products through business acquisitions. These have then been
brought into mainstream use through our product development and marketing
programmes. This has been a successful strategy for Rotork and there are clear
benefits in pursuing this where we are able to find quality businesses that fit
Rotork's product philosophy and where we can bring added value.

Our underlying markets, oil & gas, the power industry and water & waste water,
are all looking positive at the moment and we have confidence in our prospects
for growth in all of these areas during the coming year and beyond. Investment
in infrastructure development across the world in pipelines, new refineries,
liquefied natural gas and the constant need for improvements in energy supply,
water availability and the need generally to move product through valves, will
continue to demand high quality valve actuators. Our drive for improvements in
technology in our approach to processes and systems, make us well placed to take
advantage of these developments.

Peter France
29 February 2008



Consolidated Income Statement
for the year ended 31 December 2007

                                                                       Notes               2007             2006
                                                                                          £'000            £'000

Revenue                                                                  2              235,688          206,709
Cost of sales                                                                         (127,748)        (115,603)
                                                                                       ________         ________
Gross profit                                                                            107,940           91,106
Other income                                                                                227               98
Distribution costs                                                                      (2,954)          (2,287)
Administrative expenses                                                                (49,811)         (43,735)
Other expenses                                                                             (15)             (93)
                                                                                       ________         ________
Operating profit                                                         2               55,387           45,089

Financial income                                                         3                6,607            5,568
Financial expenses                                                       3              (4,741)          (4,596)
                                                                                       ________         ________
Profit before tax                                                                        57,253           46,061
Income tax expense                                                       4             (17,957)         (14,728)
                                                                                       ________         ________
Profit for the year                                                                      39,296           31,333
                                                                                       ========         ========

                                                                                          Pence            Pence
Basic earnings per share                                                 6                 45.6             36.4
Diluted earnings per share                                               6                 45.2             36.1


Consolidated Balance Sheet
at 31 December 2007

                                                                        Notes               2007            2006
                                                                                           £'000           £'000
Assets
Property, plant and equipment                                                             17,549          16,616
Intangible assets                                                                         23,141          22,225
Deferred tax assets                                                                        6,614           5,739
Other receivables                                                                            850             735
                                                                                        ________        ________
Total non-current assets                                                                  48,154          45,315

Inventories                                                                               35,993          29,027
Trade receivables                                                                         44,262          37,385
Current tax                                                                                1,330           1,219
Other receivables                                                                          4,745           4,104
Cash and cash equivalents                                                                 38,253          28,460
                                                                                        ________        ________
Total current assets                                                                     124,583         100,195
                                                                                        ________        ________
Total assets                                                                             172,737         145,510
                                                                                        ========        ========

Equity
Issued equity capital                                                                      4,323           4,314
Share premium                                                                              6,519           5,857
Reserves                                                                                   2,180         (1,421)
Retained earnings                                                                         89,430          80,386
                                                                                        ________        ________
Total equity                                                              5              102,452          89,136
                                                                                        ========        ========
Liabilities
Interest bearing loans and borrowings                                                        209             180
Employee benefits                                                                         11,047           8,186
Deferred tax liabilities                                                                     906           1,225
Provisions                                                                                 1,157             941
                                                                                        ________        ________
Total non-current liabilities                                                             13,319          10,532

Bank overdraft                                                                                 -              62
Interest bearing loans and borrowings                                                        118             526
Trade payables                                                                            21,567          16,835
Employee benefits                                                                          4,890           3,941
Current tax                                                                                8,791           6,236
Other payables                                                                            19,138          15,923
Provisions                                                                                 2,462           2,319
                                                                                        ________        ________
Total current liabilities                                                                 56,966          45,842

Total liabilities                                                                         70,285          56,374
                                                                                        ________        ________
Total equity and liabilities                                                             172,737         145,510
                                                                                        ========        ========

Consolidated Statement of Cash Flows
for the year ended 31 December 2007

                                                                   2007         2007         2006         2006
                                                                  £'000        £'000        £'000        £'000
Cash flows from operating activities
Profit for the year                                              39,296                    31,333
Adjustments for:
Amortisation of intangibles                                          74                        98
Amortisation of development costs                                   309                       259
Depreciation                                                      2,630                     2,554
Equity settled share based payment expense                          680                       496
Profit on sale of property, plant and equipment                   (159)                      (33)
Financial income                                                (6,607)                   (5,568)
Financial expenses                                                4,741                     4,596
Income tax expense                                               17,957                    14,728
                                                               ________                  ________

                                                                 58,921                    48,463
Increase in inventories                                         (5,580)                   (3,610)
Increase in trade and other receivables                         (4,873)                   (3,786)
Increase in trade and other payables                              7,001                     6,691
Difference between pension charge and cash contribution         (2,938)                   (6,801)
Increase in provisions                                              713                       731
Increase in other employee benefits                               2,875                       776
                                                               ________                  ________
                                                                 56,119                    42,464
Income taxes paid                                              (15,071)                  (11,247)
                                                               ________                  ________

Cash flows from operating activities                                          41,048                    31,217

Investing activities
Purchase of property, plant and equipment                       (2,762)                   (2,425)
Development costs capitalised                                     (687)                     (372)
Sale of property, plant and equipment                               228                       116
Acquisition of subsidiary net of cash acquired                      (8)                   (1,589)
Interest received                                                   932                       876
                                                               ________                  ________
Cash flows from investing activities                                         (2,297)                   (3,394)

Financing activities
Issue of ordinary share capital                                     671                       252
Purchase of ordinary share capital                              (4,249)                   (2,047)
Purchase of preference shares treated as debt                         -                       (4)
Interest paid                                                     (112)                     (147)
Repayment of amounts borrowed                                     (456)                     (467)
Repayment of finance lease liabilities                             (95)                     (212)
Dividends paid on ordinary shares                              (24,732)                  (24,140)
                                                               ________                  ________

Cash flows from financing activities                                        (28,973)                  (26,765)
                                                                            ________                  ________

Net increase in cash and cash equivalents                                      9,778                     1,058
Cash and cash equivalents at 1 January                                        28,398                    27,180
Effect of exchange rate fluctuations on cash                                      77                       160
held
                                                                            ________                  ________
Cash and cash equivalents at 31 December                                      38,253                    28,398
                                                                            ========                  ========


Consolidated Statement of Recognised Income and Expense
for the year ended 31 December 2007
                                                                                            2007            2006
                                                                                           £'000           £'000

Foreign exchange translation differences                                                   3,855         (3,748)
Actuarial (loss) / gain in pension scheme                                                (4,883)           6,743
Movement on deferred tax relating to actuarial loss / (gain)                               1,241         (2,023)
Effective portion of changes in fair value of cash flow hedges                             (254)            (80)
                                                                                          ______          ______

Income and expenses recognised directly in equity                                           (41)             892

Profit for the year                                                                       39,296          31,333
                                                                                          ______          ______

Total recognised income for the year                                                      39,255          32,225
                                                                                          ======          ======


Notes to the Financial Statements
for the year ended 31 December 2007

Except where indicated, values in these notes are in £'000

Rotork p.l.c. is a Company domiciled in England. The consolidated financial
statements of the Company for the year ended 31 December 2007 comprise the
Company and its subsidiaries (together referred to as the Group).

1.         Accounting policies

Basis of preparation

The consolidated financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards as
adopted by the EU ('Adopted IFRSs').

IFRS 8 - Operating Segments, IFRIC 9 - Reassessment of Embedded Derivatives,
IFRIC 10 - Interim Reporting and Impairment, IFRIC 11 - IFRS2: Group and
Treasury Share Transactions, IFRIC 12 - Service concession Arrangements, IFRIC
13 - Customer loyalty programmes and IFRIC 14 - Recognition of a Defined Benefit
Pension Scheme Surplus, together with the amendments to IAS 23, IAS 27, IFRS 2
and IFRS 3 which are adopted by the European Union but not effective as at 31
December 2007 will be applied in 2008, 2009 or 2010 as applicable. They are not
expected to have a material effect on the reported results or financial position
of the Group.

Basis of accounting

The consolidated financial statements have been prepared under the historical
cost convention subject to the items referred to in the derivative financial
instruments accounting policy below. The accounting policies set out below have
been consistently applied by the Group in preparing the 2006 and 2007 financial
information within its consolidated financial statements except for the first
time application of IFRS 7 - Financial Instruments: disclosures, the
complementary amendment to IAS 1 - Presentation and Financial Statements and
IFRIC 8 - Scope of IFRS2. They have not had a material effect on the reported
results or financial position of the Group for 2007 or 2006. The accounting
policies have been applied consistently in respect of Group entities.

Consolidation

The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries for the year to 31 December 2007. The financial
statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date control ceases. Intragroup
balances and any unrealised gains or losses or income and expenses arising from
intragroup transactions, are eliminated in preparing the consolidated financial
statements.

Status of this preliminary announcement

The financial information contained in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31 December 2007
or 2006. Statutory accounts for 2006, which were prepared under International
Financial Reporting Standards as adopted by the EU, have been delivered to the
registrar of companies, and those for 2007 will be delivered in due course. The
auditors have reported on these accounts, their reports were unqualified and did
not contain statements under section 237 (2) or (3) of the Companies Act 1985.
Full financial statements for the year ended 31 December 2007, will shortly be
posted to shareholders, and after adoption at the Annual General Meeting on 2
May 2008 will be delivered to the registrar.

2.         Analysis of revenue, profit and net assets

The primary format used for segmental reporting is by business segment as this
reflects the internal management structure and reporting of the Group. Segment
results, assets and liabilities include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated
expenses comprise corporate expenses and unallocated assets and liabilities
comprise cash, borrowings, tax assets and liabilities respectively. Intra group
trading is determined on an arm's length basis.

Business segments

The Group comprises the following business segments:

Controls - the design, manufacture and sale of electric valve actuators

Fluid Systems - the design, manufacture and sale of heavy duty pneumatic and
hydraulic valve actuators

Gears - the design, manufacture and sale of gearboxes, adaption and ancillaries
for the valve industry

Geographic segments

Rotork has a worldwide presence in all three business segments through its
subsidiary selling offices and through an agency network. A full list of
locations can be found at www.rotork.com.

Analysis by operation:
                                           Controls   Fluid Systems          Gears   Eliminations      Consolidated
                                               2007            2007           2007           2007              2007

Revenue from external customers             164,226          47,919         23,543              -           235,688
Inter segment revenue                             -               -          8,347        (8,347)                 -
                                           ________        ________       ________       ________          ________
Total revenue                               164,226          47,919         31,890        (8,347)           235,688
                                           ========        ========       ========       ========          ========

Segment result                               43,536           7,164          7,259              -            57,959
                                           ========        ========       ========       ========         
Unallocated expenses                                                                                        (2,572)
                                                                                                           ________
Operating profit                                                                                             55,387
Net financing income                                                                                          1,866
Income tax expense                                                                                         (17,957)
                                                                                                           ________
Profit for the year                                                                                          39,296

                                                                                                           ========


                                           Controls   Fluid Systems          Gears   Eliminations      Consolidated
                                               2006            2006           2006           2006              2006

Revenue from external customers             147,795          40,504         18,410              -           206,709
Inter segment revenue                             -               -          5,872        (5,872)                 -
                                           ________        ________       ________       ________          ________
Total revenue                               147,795          40,504         24,282        (5,872)           206,709
                                           ========        ========       ========       ========          ========

Segment result                               37,024           5,374          4,638              -            47,036
                                           ========        ========       ========       ========      
Unallocated expenses                                                                                        (1,947)
                                                                                                           ________
Operating profit                                                                                             45,089
Net financing income                                                                                            972
Income tax expense                                                                                         (14,728)
                                                                                                           ________
Profit for the year                                                                                          31,333
                                                                                                           ========

                                           Controls   Fluid Systems          Gears    Unallocated      Consolidated
                                               2007            2007           2007           2007              2007

Segment assets                               72,937          37,420         16,183         46,197           172,737

Segment liabilities                          40,728          14,002          5,322         10,233            70,285

Depreciation                                  1,839             553            238              -             2,630
Amortisation                                    309              27             47              -               383
Non-cash items : Equity settled                 378              45             25            232               680
share based payments
Capital expenditure                           2,052             689            253              -             2,994


                                           Controls  Fluid Systems          Gears    Unallocated      Consolidated
                                               2006           2006           2006           2006              2006

Segment assets                               67,969         29,796         12,325         35,420           145,510

Segment liabilities                          34,557          9,442          4,146          8,229            56,374

Depreciation                                  1,776            536            242              -             2,554
Amortisation                                    259             27             71              -               357
Non-cash items : Equity settled Share           366             58             16             56               496
based payments
Capital expenditure                           1,949            496            161              -             2,606


Analysis by Geographical segment:            Europe       Americas     Rest of the    Unallocated      Consolidated
                                                                             World
                                               2007           2007            2007           2007              2007

Revenue from external customers by          110,679         56,298          68,711              -           235,688
location of customer

Segment assets by location of assets         86,538         22,307          17,695         46,197           172,737

Capital expenditure by location of            2,197            275             522              -             2,994
assets




                                             Europe       Americas     Rest of the    Unallocated      Consolidated
                                                                             World
                                               2006           2006            2006           2006              2006

Revenue from external customers by           89,992         58,398          58,319              -           206,709
location of customer

Segment assets by location of assets         72,810         21,849          15,431         35,420           145,510

Capital expenditure by location of            1,500            268             838              -             2,606
assets



All of the activities of the Group in the year arise from continuing operations.


3.         Net financing income


Recognised in the income statement                                                            2007         2006

Interest income                                                                                958          982
Expected return on assets in the pension schemes                                             5,574        4,518
Foreign exchange gains                                                                          75           68
                                                                                            ______       ______
                                                                                             6,607        5,568
                                                                                            ======       ======

Interest expense                                                                               112          121
Interest charge on pension scheme liabilities                                                4,541        4,309
Foreign exchange losses                                                                         88          166
                                                                                            ______       ______
                                                                                             4,741        4,596
                                                                                            ======       ======

Recognised in equity

Effective portion of changes in fair value of cash flow hedges                               (544)        (290)
Fair value of cash flow hedges transferred to profit or loss                                  290          210
Foreign currency translation differences for foreign operations                              3,855      (3,748)
                                                                                            ______       ______
                                                                                             3,601      (3,828)
                                                                                            ======       ======
Recognised in:
Hedging reserve                                                                              (254)         (80)
Translation reserve                                                                          3,855      (3,748)
                                                                                            ______       ______
                                                                                             3,601      (3,828)
                                                                                            ======       ======

4.         Income tax expense


                                                                 2007          2007          2006          2006
Current tax:
UK Corporation tax on profits for the year                     12,670                      10,486
Double tax relief                                             (5,122)                     (6,023)
Adjustment in respect of prior years                            (187)                       (182)
                                                               ______                      ______
                                                                              7,361                       4,281

Overseas tax on profits for the year                           10,487                       8,787
Adjustment in respect of prior years                             (24)                          41
                                                               ______                      ______
                                                                             10,463                       8,828
                                                                             ______                      ______
Total current tax                                                            17,824                      13,109

Deferred tax:
Origination and reversal of other temporary differences           115                       1,585
Adjustment in respect of prior years                               18                          34
                                                               ______                      ______

Total deferred tax                                                              133                       1,619
                                                                             ______                      ______
Total tax charge for year                                                    17,957                      14,728
                                                                             ======                      ======

Effective tax rate (based on profit before tax)                               31.4%                       32.0%

Profit before tax                                                            57,253                      46,061

Profit before tax multiplied by standard rate of                             17,176                      13,818
corporation tax in the UK of 30%

Effects of:
Non deductible expenses                                                         349                         267
Unrelieved losses                                                                 -                        (45)
Higher tax rates on overseas earnings                                           625                         795
Adjustments to tax charge in respect of prior years                           (193)                       (107)

                                                                             ______                      ______
Total tax charge for year                                                    17,957                      14,728
                                                                             ======                      ======

A tax credit of £577,000 (2006: £551,000) in respect of share based payments has
been recognised directly in equity in the year.

The Group continues to expect its effective rate of corporation tax to be
slightly higher than the standard UK rate due to higher rates of tax in the US,
Canada, France, Germany, Italy, Japan and India.

There is an unrecognised deferred tax liability for temporary differences
associated with investments in subsidiaries. Rotork p.l.c. controls the dividend
policies of its subsidiaries and subsequently the timing of the reversal of the
temporary differences. It is not practical to quantify the unprovided temporary
differences as acknowledged within paragraph 40 of IAS 12.

5.         Capital and reserves

                             Issued      Share   Translation       Capital      Hedging     Retained       Total
                             equity    premium       reserve    redemption      reserve     earnings
                            capital                                reserve

Balance at 31 December        4,310      5,609           978         1,637        (210)       68,241      80,565
2005

Profit for the year               -          -             -             -            -       31,333      31,333
Other items in the                -          -       (3,748)             -         (80)        4,720         892
statement of recognised
income and expense
Equity settled                    -          -             -             -            -          915         915
transactions net of tax
Share options exercised           4        248             -             -            -            -         252
by employees
Own ordinary shares               -          -             -             -            -      (2,047)     (2,047)
acquired
Own ordinary shares               -          -             -             -            -        1,368       1,368
awarded under share
schemes
Purchase of preference            -          -             -             2            -          (4)         (2)
shares
Dividends                         -          -             -             -            -     (24,140)    (24,140)

                              _____      _____         _____         _____        _____        _____       _____
Balance at 31 December        4,314      5,857       (2,770)         1,639        (290)       80,386      89,136
2006
Profit for the year               -          -             -             -            -       39,296      39,296
Other items in the                -          -         3,855             -        (254)      (3,642)        (41)
statement of recognised
income and expense
Equity settled                    -          -             -             -            -          364         364
transactions net of tax
Share options exercised           9        662             -             -            -            -         671
by employees
Own ordinary shares               -          -             -             -            -      (4,249)     (4,249)
acquired
Own ordinary shares               -          -             -             -            -        2,007       2,007
awarded under share
schemes
Dividends                         -          -             -             -            -     (24,732)    (24,732)
                              _____      _____         _____         _____        _____        _____       _____
Balance at 31 December        4,323      6,519         1,085         1,639        (544)       89,430     102,452
2007
                              =====      =====         =====         =====        =====        =====       =====


Share capital and share premium

                           5p Ordinary    5p Ordinary         £1        5p Ordinary   5p Ordinary         £1
                              shares          shares      Non-redeemable     shares       shares      Non-redeemable
                            Authorised      Issued and      preference     Authorised   Issued and      preference
                                        fully paid up        shares                    fully paid up      shares
                                   2007          2007             2007         2006          2006             2006

At 1 January                      5,449         4,314               45        5,449         4,310               47
Purchased for cash and                -             -                -            -             -              (2)
cancelled
Issued under employee                 -             9                -            -             4                -
share schemes
                                _______       _______          _______      _______       _______            _____
At 31 December                    5,449         4,323               45        5,449         4,314               45
                                =======       =======          =======      =======       =======            =====

Number of shares (000)          108,990        86,469                       108,990        86,282
                                =======       =======                       =======       =======


The ordinary shareholders are entitled to receive dividends as declared and are
entitled to vote at meetings of the Company. The preference shareholders take
priority over the ordinary shareholders when there is a distribution upon
winding up the Company or on a reduction of equity involving a return of
capital. The holders of preference shares are entitled to vote at a general
meeting of the Company if a preference dividend is in arrears for six months or
the business of the meeting includes the consideration of a resolution for
winding up the Company or the alteration of the preference shareholders' rights

Ordinary shares issued during the year were 142,173 (2006: 88,261) under the
Share option scheme, at prices between 285p and 387p (2006: 278p and 298p) and
44,905 (2006: 1,465) under the Sharesave plan at 320p (2006: 320p). No new
shares were issued under the Share Incentive Plan or under The Overseas Profit
Linked Share Scheme during 2007 or 2006.

No new options were issued under the Share option scheme during 2007 or 2006. On
1 December 2007 (2006: 6 October 2006) options over 42,405 (2006: 58,025) shares
were granted under the Sharesave plan at 811p (2006: 592p). Of these options,
28,499 (2006: 21,402) were exercisable after 3 years and 13,906 (2006: 36,623)
after 5 years.

There were 46,557 (2006: 200,973) outstanding options under the Share option
scheme at 31 December, exercisable at various prices between 278p and 387p per
ordinary share between 2008 and 2014. There were 241,487 (2006: 250,452)
outstanding options under the Sharesave plan at 31 December, exercisable at
various prices between 320p and 811p per ordinary share between 2008 and 2012.

Within the retained earnings reserve are own shares held. The investment in own
shares represents 445,396 (2006: 283,045) ordinary shares of the Company held in
trust for the benefit of directors and employees for future payments under the
Share Incentive Plan and Long-term incentive plan. The dividends on these shares
have been waived.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from
the translation of the financial statements of foreign operations.

Capital redemption reserve

The capital redemption reserve arises when the Company redeems shares wholly out
of distributable profits.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change
in the fair value of cash flow hedging instruments that are determined to be an
effective hedge.

Dividends

The following dividends were paid in the year per qualifying ordinary share:
                                                                                              2007          2006

11.65p final dividend (2006: 9.9p)                                                          10,051         8,537
7.7p interim dividend (2006: 6.5p)                                                           6,645         5,601
2007 additional interim dividend 9.3p                                                        8,036             -
2006 first additional interim dividend 5.8p                                                      -         5,004
2006 second additional interim dividend 5.8p                                                     -         4,998
                                                                                            ______        ______
                                                                                            24,732        24,140
                                                                                            ======        ======

After the balance sheet date the following dividends per qualifying ordinary
share were proposed by the directors. The dividends have not been provided for
and there are no corporation tax consequences.

                                                                                              2007          2006
Final proposed dividend per qualifying ordinary share
14.00p                                                                                      12,116
                                                                                            ======
11.65p                                                                                                    10,019
                                                                                                          ======

Additional interim dividends per qualifying ordinary share proposed for 2008

11.5p                                                                                       10,000
                                                                                            ======
9.3p                                                                                                       8,000
                                                                                                           =====


6.         Earnings per share

Basic earnings per share

Earnings per share is calculated for both the current and previous years using
the profit attributable to the ordinary shareholders for the year. The earnings
per share calculation is based on 86.1m shares (2006: 86.1m shares) being the
weighted average number of ordinary shares in issue (net of own ordinary shares
held) for the year.
                                                                                              2007          2006

Net profit attributable to ordinary shareholders                                            39,296        31,333
                                                                                            ======        ======

Weighted average number of ordinary shares

Issued ordinary shares at 1 January                                                         85,999        85,952
Effect of own shares held                                                                       54            91
Effect of shares issued under Share option schemes / Sharesave plans                            93            58

                                                                                            ______        ______
Weighted average number of ordinary shares for the year ended 31 December                   86,146        86,101
                                                                                            ======        ======

Diluted earnings per share

Diluted earnings per share is based on the profit for the year attributable to
the ordinary shareholders and 86.9mshares (2006: 86.9m shares). The number of
shares is equal to the weighted average number of ordinary shares in issue (net
of own ordinary shares held) adjusted to assume conversion of all dilutive
potential ordinary shares. The Company has three categories of dilutive
potential ordinary shares: those share options granted to employees under the
Share option scheme and Sharesave plan where the exercise price is less than the
average market price of the Company's ordinary shares during the year and
contingently issuable shares awarded under the Long-term incentive plan.
                                                                                              2007          2006

Net profit attributable to ordinary shareholders                                            39,296        31,333
                                                                                            ======        ======


Weighted average number of ordinary shares (diluted)

Weighted average number of ordinary shares for the year ended 31 December                   86,146        86,101
Effect of share options in issue                                                                30           102
Effect of Sharesave options in issue                                                           113           111
Effect of LTIP shares in issue                                                                 604           552
                                                                                            ______        ______
Weighted average number of ordinary shares (diluted) for the year ended 31                  86,893        86,866
December
                                                                                            ======        ======




                      This information is provided by RNS
            The company news service from the London Stock Exchange