Interim Management Statement

RNS Number : 3307S

Rotork PLC

18 November 2011

 



18 November 2011

  Rotork p.l.c

Interim Management Statement

Rotork p.l.c. ("Rotork"), the market leading actuator manufacturer and flow control company, today issues its Interim Management Statement covering the period from 1 July to 17 November 2011. All figures relating to Rotork are for the period ended 30 October 2011.

Order intake in the third quarter remained strong, up 6.5% on the prior year, reflecting the stronger comparative period of the third quarter 2010. Cumulative order intake to 30 October is now 14.7% ahead of the prior year.

Revenue in the third quarter was a record and cumulative revenue to 30 October is 13.4% ahead of the prior year. We anticipate a stronger fourth quarter as further projects are delivered out of the order book. The order book at 30 October was £163.8m, 8.3% higher than the same point last year.

Whilst the challenging global economic situation can be seen to be impacting certain geographies such as Central Europe and USA, other areas are showing positive signs of growth with China and India amongst the most active. Currently we have an increased level of larger projects within the Rotork project tracking system and quotation activity is good. Rotork benefits from being a truly global business with exposure to a wide range of end markets.

Hence, based on the current backlog, we anticipate a strong end to the year to deliver full year revenue and profit in line with the guidance given at the Half Year Results on 2 August 2011.

Rotork Controls

Our electric actuator division continues to perform well and has seen strong demand across most of the sectors and geographies that we serve. Cumulative order intake to the 30 October is 13.0% higher than the prior year. A number of markets are performing well, with the BRIC economies in particular supporting our growth projections. Rotork Process Controls continues to develop its product offering and we are seeing an increase in activity throughout our sales offices. In general costs have been higher in 2011 as we invest in our sales and operational infrastructure and develop a range of new products. These investments will benefit the division in 2012 and beyond.

Rotork Fluid Systems

Our pneumatic and hydraulic actuator division has seen the greatest increase in order intake, up 20.7% on the prior year as of 30 October. Whilst the margins in this business have improved in the second half of the year, the divisional target of 15% return on sales will not be met for the year as a whole.  This remains a realistic on-going target for the division. As with Controls, we have been investing in the sales and operational infrastructure of the division and we are already seeing a benefit from the investment which will support the targets for the division in 2011 and beyond. The Middle East continues to be the driver for this business with Oil and Gas activity remaining strong.

Rotork Gears

Our gears business continues to grow organically through incremental sales to the valve industry. Cumulatively, order intake to 30 October is 13.7% ahead of the prior year. We continue to see opportunities in countries that have a significant valve market such as Russia, China and India. Mitigation of raw material cost increases has benefited this division and we have seen margins improve in the second half of the year. For the year as a whole we now expect these to be at similar levels to the prior year.

Acquisition

As detailed in the separate announcement released this morning, we have purchased Fairchild Industrial Products Company ("Fairchild"). The acquisition of Fairchild will strengthen Rotork's position in the global flow control market and form the basis of a new division, Rotork Instruments.

Financial Position

The Group continues to be highly cash generative and maintains a strong balance sheet with a net cash balance of £84.9m at 30 October. This has allowed us to fund recent acquisitions out of cash reserves.

Outlook

Based on the current backlog, we anticipate a strong end to the year to deliver full year revenue and profit in line with the guidance given at the Half Year Results on 2 August 2011.  

Conference Call

Peter France, Chief Executive, and Jonathan Davis, Finance Director, will be hosting a conference call for analysts and investors at 8.00am 18 November. To join the call, please dial in to the following number:

UK number [phone]

UK toll free number 0800 368 1950

Participant PIN 134264#

A recording of the call will be available on the Rotork website www.rotork.com  shortly after the conclusion of the call or by calling the following number:

UK number [phone]

UK toll free number 0800 368 1890

US toll free number [phone]

Conference reference 380954#

Notes

1.    Third quarter refers to the period 1 July to 2 October 2011.

2.    2011 figures quoted are at actual exchange rates and include the part year benefit from acquired businesses.  2010 are as previously reported.

3.    Rotork will be announcing its preliminary results for the year ending 31 December 2011 on 28 February 2012.

For further information, please contact:

Rotork p.l.c.                                                       Tel: [phone]

Peter France, Chief Executive

Jonathan Davis, Finance Director

FTI Consulting                                                   Tel: [phone]

Nick Hasell / Richard Mountain

 

END

 

 

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