Sales, profits and operating margins all increased at Bath-headquartered specialist manufacturer Rotork in the first half of this year as markets improved and it started benefiting from a refocusing of the business.
As a result, the group, which designs and makes high-quality flow control equipment for the global oil, gas, water and power industries, said it anticipated that 2024 would be “another year of progress”.
Pre-tax profits for the six months of the end of June were up 15.6% at £69.7m against the same period last year on revenue 8% higher at £361.4m.
The strong intake of new orders which started last year continued into the first half of this year, but while those in its oil & gas and water & power divisions were higher orders for its chemical, process & industrial products were slightly lower
Adjusted operating margins were 170 points higher at 21.2%, reflecting its increased sales.
The group, which employs about 3,200 people across its 16 manufacturing sites worldwide, had spent much of last year recovering from worldwide supply chain bottlenecks, including a major shortage of microchips and semi-finished components such as circuit boards caused by pandemic-related lockdowns.
It introduced its Growth+ strategy last year to target growth areas in its markets, control costs and invest in innovation.
Rotork chief executive Kiet Huynh, pictured, said the benefits of this target segment approach under Growth+ were increasingly apparent.
“Target Segment sales, which represent around half of group revenue, are growing strongly, particularly in water infrastructure, desalination, chemicals and up and mid-stream oil & gas electrification,” he said.
“The outlook for our end markets remains positive, order intake was encouraging in June and July and our order book gives us good visibility.
“Our full year expectations are unchanged and we continue to anticipate 2024 to be another year of progress.”
Rotork, which is listed on the London Stock Exchange, said the recovery in oil & gas sector activity, first experienced in the second half of 2021, had continued through the first half of 2024.
Hydrocarbons would have an important role in the world’s energy mix for years to come, it said, and following an extended period of industry under-investment, it was benefiting from a catch-up now underway.
The water and wastewater sector continued to increase investment in new and existing infrastructure while the outlook for the global power market was more positive than it had been for some time driven by electrification, economic growth and, in the US, by the repatriation of manufacturing and data centre build-out.
The global chemicals and specialty chemicals industries had experienced “sluggish demand” over the past year or so due to the energy crisis in Europe and recession concerns in North America.
At the same time in China it had been hit by a slower-than-expected recovery from Covid-19 and a property sector downturn.
Whilst the outlook remained uncertain, there were “tentative signs of improvement” in North America and China, Rotork said.
