Bath-headquartered specialist engineering group Rotork has said it expects to largely shrug off the impact of the coronavirus pandemic and achieve better-than-expected annual profits.
In a trading update for shareholders this week the group, which makes specialist valves for the global oil, gas, water and chemical industries, said its performance during the first 10 months of 2020 had “demonstrated the improved resilience” of the business.
Although it said there remained uncertainty on the continuing impact of the pandemic – and risks of temporary factory closures and logistics issues – it expected 2020’s adjusted operating profit to be “at, or slightly above, the top end of the range of current market expectations”, of £124m-£136m.
Last year the group, which employs 3,686 people around the world and has customers in 173 countries, achieved operating profits of £151m on revenues of £669m.
In the trading update it said order intake in the third quarter had shown some improvement on the 15.6% drop experienced in the first half as customer spent on automation and environmental projects as well as maintenance and refurbishment – but it still remained lower than at this time last year.
Third quarter revenue came in at 97% of the 2019 level – an improvement on the first-half’s 9.6% year-on-year decline – and while sales to the oil & gas sector declined those to the water & power sector grew.
A ‘growth acceleration programme’ to optimise its factories and rationalise its supply chain, was paying off and already improving margins, it said, while its new product pipeline was strong. It has also expanded its factory in Rochester, New York.
All Rotork’s 22 factories across the globe were operating despite Covid-related restrictions in some countries, although some were operating below normal output levels as a result.
The group is the global market leader in the production of electric, hydraulic and pneumatic valve actuators and gearboxes to manage the flow of gases or liquids.
