Last checked at 20 Nov 2009 07:00
20 November, 2009
Rotork p.l.c.
Interim Management Statement
Rotork p.l.c., the market leading actuator manufacturer, today issues its Interim Management Statement covering the period from 1 July to 20 November 2009.
Trading
In the period, Group revenues and margins remained strong, although, as expected, the timing of order placements has remained challenging. Order intake in the third quarter was 3.4% lower than the comparative period in 20081. At 31 October the order book stood at £125 million1. Certain markets and geographic areas that we serve are showing signs of increased activity, from which we expect to benefit in 2010.
We continue to manage our cost base and obtain savings from the supply chain. This has enabled us to mitigate the majority of the material cost increases that we have seen and, in a number of cases, reverse the upward trend.
Rotork Controls, the largest division, is performing well overall and, with the exception of Rotork Process Controls a small business within the division, has seen order intake revenues and profit all ahead of last year1.
Rotork Fluid Systems is heavily focused on the Oil and Gas market and has suffered the most from project delays. However the strong order book at the beginning of the year has supported revenues.
Rotork Gears has been under more pricing pressures than the other two divisions, however it is seeing increased activity from its core markets.
Acquisition
As previously announced, we have concluded the acquisition of the business and assets of Flow-Quip Controls Inc based in Tulsa, Oklahoma, USA for $8 million in cash. This business will report into the Rotork Fluid Systems division and this acquisition will strengthen our presence in the targeted South American market as well as domestically in the USA.
Financial position
Strong operating cash flows further strengthened our balance sheet and the recent acquisition was funded entirely out of free cash flow.
Directorate Change
Bob Slater has indicated his intention to retire from his position as Group Finance Director on 31 March 2010. Jonathan Davis, currently Divisional Finance Director of Rotork Controls division, will succeed Bob and become Group Finance Director on 1 April 2010.
Roger Lockwood, Chairman of Rotork, commented:
"Bob has made a significant contribution to the development of Rotork over the past 21 years. On behalf of the entire Board, I would like to extend our thanks to Bob and wish him well for the future.
Rotork's succession planning process has identified Jonathan Davis as the best candidate to take Rotork forward to the next stage of its development and we look forward to him joining the Board in 2010. Jonathan joined Rotork in 2002 as Group Financial Controller, moving to his current role of Divisional Finance Director, Rotork Controls Division on 1 January 2008"
Other than the acquisition of the Flow-Quip Controls Inc business, the retirement of Bob Slater and the appointment to Group Finance Director of Jonathan Davis, there have been no material events or transactions affecting the Group in the period.
Outlook
Sales revenue to date and the strength of the order book support our view that we expect to achieve profits for the current year at the upper end of market forecasts.
Following a period of slower order intake, certain markets and geographic areas that we serve are showing signs of increased activity, from which we expect to benefit in 2010. Nevertheless, we anticipate the current competitive environment will remain challenging for some time, although we are encouraged that project visibility and the number of quotations remain positive.
The continued weakness of sterling continues to benefit the Group's competitive position and reported trading results.
Notes
1 2009 figures quoted are at actual exchange rates and 2008 comparisons are as previously reported.
2 Rotork will be announcing its Preliminary results for the year ending 31 December 2009 on 2 March 2010.
For further information, please contact:
| Rotork p.l.c. | |
| Peter France, Chief Executive | Tel: 01225 733 214 |
| Bob Slater, Finance Director | Tel: 01225 733 224 |
| Financial Dynamics | Tel: 020 7269 7291 |
| Jon Simmons / Sophie Kernon |