Rotork PLC Trading update (3913G)
25 November 2020 - 6:00PM
UK Regulatory
TIDMROR
RNS Number : 3913G
Rotork PLC
25 November 2020
25 November 2020
Rotork Plc
Trading update
Improved resilience demonstrated and guidance reinstated
Rotork plc ("Rotork"), the global flow control and
instrumentation group, today issues the following trading update
covering the four months to 1 November 2020.
Trading update
Order intake in the third quarter showed sequential improvement,
whilst remaining lower year-on-year on an OCC(1) basis, with the
decline slightly less than the 15.6% experienced in the first half.
The majority of Rotork's activity is driven by customers'
operational rather than capital expenditure and they continue to
spend on automation and environmental projects as well as
maintenance and refurbishment. Large project activity has remained
subdued.
During the third quarter Group revenues were at 97% of the 2019
level on an OCC basis, an improvement on the first-half's 9.6%
year-on-year decline. The third quarter performance largely
reflected reduced activity at Rotork Site Services.
Oil & Gas sales declined more than the Group, with revenue
higher year-on-year in the quarter in EMEA and Asia Pacific, but
lower in the Americas. Water & Power sales grew, continuing the
encouraging performance seen earlier in the year. Trading
conditions remained mixed at CPI, however the Asia Pacific region
returned to year-on-year growth. Overall, CPI revenue was down less
than in the first half (when CPI sales were 16.8% lower).
Third quarter adjusted operating profit margins benefited from
continued execution of the Growth Acceleration Programme and other
management actions and we now anticipate full-year margin progress
year-on-year, absent any further Covid-19 related disruption to
operations.
Our Growth Acceleration Programme is on track. Our innovation
and new product development initiatives are progressing well and
the second half features several important launches. Our factory
footprint optimisation work continues, and we recently formally
opened our expanded Rochester, New York, facility. The regional
back office simplification initiative is well under way.
Rotork remains highly cash generative with a strong balance
sheet. Net cash at 1 November 2020 was GBP146.8m (GBP106.1m at 31
December 2019 including GBP10.7m of lease liabilities) after paying
an interim dividend on 25 September 2020 of GBP34.0m in lieu of the
deferred 2019 final dividend.
Covid-19 update
Our priority is the health and safety of our colleagues and
their families, our customers, and suppliers. We continue to take
decisive actions to manage the Covid-19 situation.
All our production facilities are currently open, albeit in a
small number of cases operating at below normal output levels.
Whilst every effort is being made to keep our facilities open, we
will not hesitate to close them if required or if we believe there
is any risk to our colleagues or their families.
Outlook
The Group's performance in the first ten months has demonstrated
the improved resilience of the business. Although there remains
uncertainty on the continuing impact of the Covid-19 pandemic, and
risks of temporary factory closures and logistics issues, we expect
2020 adjusted operating profit to be at, or slightly above, the top
end of the range of current market expectations(2) .
Rotork will publish 2020 full-year results on Tuesday 2 March
2021.
(1) OCC is organic constant currency results excluding
discontinued businesses and restated at 2019 exchange rates
(2) The current range of market expectations (company compiled)
for 2020 adjusted operating profit is GBP124m-136m
Enquiries:
Rotork plc Tel: +44 (0)1225 733 200
Kevin Hostetler, Chief Executive
Jonathan Davis, Finance Director
Andrew Carter, Investor Relations Director
FTI Consulting Tel: + 44 (0)20 3727 1340
Nick Hasell / Susanne Yule
About Rotork
Rotork is a market-leading global provider of mission-critical
flow control and instrumentation solutions for oil & gas, water
and wastewater, power, chemical process and industrial
applications. We help customers around the world to improve
efficiency, reduce emissions, minimise their environmental impact
and assure safety. Rotork employs about 3,500 people, has
manufacturing facilities in more than 20 locations and serves 173
countries through a global service network. Its shares have a
premium listing on the London Stock Exchange (symbol: ROR) and are
a constituent of the FTSE 250 index. For more information please
visit www.rotork.com .
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