(Alliance News) - Rotork PLC on Tuesday reported a weaker performance for 2020, due to subdued project activity and disruption to production and logistics caused by the Covid-19 pandemic.
For the year, the Bath-based electric, pneumatic and hydraulic valves manufacturer posted a pretax profit of GBP122.0 million, a 1.6% drop from GBP124.1 million the year before.
Rotork's operating margin rose by 100 basis points to 23.6%, a rise attributed to savings generated through its "growth acceleration programme", which is aimed at optimising Rotork's manufacturing footprint, rationalising its supply chain, and upgrading IT infrastructure.
Although administrative expenses declined to GBP157.3 million from GBP180.4 million, revenue dropped 9.7% year-on-year to GBP604.5 million from GBP669.3 million.
On a constant currency basis, revenue fell 7.4%. Rotork's weaker revenue performance was due to a decline in sales from the Oil & Gas and Chemical and Process & Industrial segments, due to challenging trading conditions, and Covid-19 disruption mainly in the first half of the year.
In addition, larger capital projects had experienced delays and some cancellations. Order intake for the year declined 15% year-on-year to GBP590.2 million from GBP691.2 million, as global economic activity was slowed considerably by the pandemic.
Rotork declared a dividend of 6.3 pence per share, up 1.6% from 6.2p the prior year.
Looking ahead, Rotork said that the outlook for its end markets are improving, however Covid-19 related uncertainty remains. The group said its production facilities are operating largely as normal, and also has a solid order book.
As a result, Rotork remains committed to delivering mid to high single digit revenue growth over time.
"Rotork delivered a resilient performance in an unprecedented period. Adjusted operating margins were 100 basis points higher year-on-year, and ahead of consensus expectations, despite sales being down on the prior period. Our Growth Acceleration Programme continued to deliver planned benefits, despite the challenging external environment, and we took the opportunity to bring forward some actions scheduled for later years," said Chief Executive Kevin Hostetler.
Shares in Rotork were up 4.3% at 372.80 pence on Tuesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Rotork (ROR)