Valve engineering group Rotork saw record half-year revenue and profit in each of its divisions, while order intake also hit new highs despite a slow-down in orders from India and China.
Boosted by recent acquisitions, revenue in the first half of the year rose 23.3%, or 17.1% on an organic constant currency (OCC) basis, to £245.9m from £199.4m in the first half of last year. Last year's acquisitions weighed in with £16m of incremental revenue in the reporting period.
Profit before tax rose 17.2% (OCC:16.9%) to £58.1m from £49.6m the year before, after taking into account amortisation of acquired intangible assets. Adjusted profit before tax rose 21.9% (OCC:16.2%) to £61.7m from £50.7m last year.
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Adjusted operating profit on an OCC basis saw the following increases on a division-by-division basis: Controls +8.2%; Fluid Systems +91.3%; Gears +18.6%. The newly created Instruments division performed in line with expectations, notching up operating profits of £2.7m.
The order book at the end of June stood at a record high of £177.7m, up 13.0% from December. Order intake was 18.2% higher than in the first half of 2011, with the strongest growth in the Gears division.
The visibility of projects in the second half is good and the group expects its markets in the Middle East, South America, USA and Russia to remain active.
"Whilst recognising the challenging economic environment, our record order book and diverse end market exposure provide the board with confidence of achieving further progress in the full year. We are anticipating, as in previous years, that the group's performance in 2012 will be weighted towards the second half and that margins will remain similar to those seen in 2011," revealed Peter France, Chief Executive of Rotork.
Net cash balances of £56m at the end of June were £8m higher than December 2011, with the payment of the £20m final dividend the most significant outflow.
Rotork's capital expenditure is first half weighted this year with £8m spent so far. Net working capital has increased £2m since last December and represents 25% of annualised revenue compared with 27% at the year end.
The interim dividend has been bumped up to 16.4p from 14.5p at the halfway stage in 2011.
JH
