Bath’s biggest engineering group Rotork today insisted a double-digit fall in recent orders and revenues would not hit its profits.
The firm, which makes sophisticated valves and industrial control equipment for the global oil and gas industry, revealed that its order intake in the third quarter dropped 17.2% in period from the same period last year. It blamed reduced activity by in new projects by global players.
That left its order book at October 25 worth £185m – 13.3% less that the same time last year. It also said revenue for the quarter was 18.1% lower in today’s trading update. 
It described the trading environment as remaining “challenging across most of [its] key markets and geographies”.
However it said its expectations for the full year remained unchanged from its last trading update on September 17 – which, based on current exchange rates, would show revenue in the range of £530-£555m with adjusted operating profit of between £120m and £130m.
The firm said in today’s statement issued to the London Stock Exchange: “Although our quote activity has remained encouraging, the timing of order placement and product delivery remains difficult to forecast.
“We continue to implement our previously announced cost management initiatives and we are on track to achieve the savings indicated at the time of our half year results.”
It also announced the acquisition of Eltav, a small firm providing wireless technology for the valve industry, which it said would strengthen its wireless offering. No further details of the deal were disclosed.
Rotork shares, which had started the day up slightly, were trading 2.34% lower just before midday.
In a division-by-division breakdown of third-quarter trading, Rotork said its core controls business suffered a 17.5% fall in orders.
“The oil and gas market continues to be impacted by reduced levels of activity, with projects moving slowly or being postponed into next year,” it said.
“There are positive signs in power-related markets, with recent project approvals supportive of our expectation of improved activity in 2016. We continue to expand our end market exposure as we look for areas of increased activity. Our products are often mission critical and this supports our after-market business which continues to see good levels of growth.”
Trading in its fluid systems division continued to be “very challenging” with order intake down 26.9% on the same period last year.
“Project deferrals and cancellations due to oil companies reassessing the feasibility of planned capital projects continue to impact all geographic regions of the business,” it said. “We are planning for an extended period of weakness but see opportunities in areas where investment is still required, such as safety and cost reduction initiatives by our customers.”
Order intake in its gears business was down 4.2%, which, it said, reflected the weakness in the oil and gas market and the difficult trading environment in China.
Its instruments division was the only one to grow by acquisition and organically. Its order intake was 7% higher and its results for the quarter included first-time contributions from M&M and Bifold, both acquired in August.
Rotork will announce its results for the period ending December 31 on March 1 next year.
