Bath manufacturer Rotork’s recovery from last year’s global supply chain problems has continued, with the firm now having a record order book.
The group, which designs and makes flow control equipment for the international oil, gas, water and chemical industries, said new orders rose by 11.9% during the first six months of this year.
At the same time, its pre-tax profits climbed by 35.1% to £60.2m on revenues of £334.7m – an 19.7% increase on the same period last year.
Its operating margin also rose from 15.7% to 17.7% while it also reported progress in its Growth+ strategy introduced at the end of last year with a vision to make Rotork the leader in intelligent flow control.
The group was hit by worldwide supply chain bottlenecks, including a major shortage of microchips, last year just as it started to recover from the impact of the pandemic.
As a result, profits and revenues fell at the group, which employs around 3,200 people, has manufacturing facilities in more than 16 locations and serves 170 countries through a global service network.
But Rotork chief executive Kiet Huynh, pictured, told shareholders in its interim results statement this week that he was pleased with the group’s first-half performance.
“In particular with double-digit year-on-year growth in orders and sales, the improvement in operating margin and the progress made under the Growth+ strategy,” he added.
“The outlook for all our divisions is positive and we entered the second half with a record order book.
“Whilst mindful of residual supply chain challenges, we anticipate delivering further progress in 2023 in line with expectations on an OCC (organic constant currency) basis.”
All Rotork’s three divisions booked higher orders, with oil & gas and water & power strongly ahead. Oil & Gas order intake was the largest in a six-month period since 2019. Orders, which overall continued to be driven predominantly by customers’ operational spend, included more large orders than seen for some time.
However, the group said the supply chain challenges faced in recent years had not entirely disappeared and during the period the group experienced some disruption to the supply of semi-finished components such as circuit boards.
Rotork said it was working with its suppliers to improve availability and there was some improvement in deliveries towards the end of the period.
The 19.5% rise in oil & gas sales was driven by the Americas and Europe, Middle East & Africa (EMEA) regions.
Chemical, Process & Industrial (CPI) sales were 19% ahead, with all geographic regions higher, while water & power sales were up 20.4%, with all regions ahead and the Americas seeing a particularly strong improvement.
As highlighted by Bath Business News in April, Rotork expects to benefit from carbon capture projects linked to US President Joe Biden’s Inflation Reduction Act and similar initiatives from the European Union. It said it saw a “marked pick-up in inquiries and quotation activity” during the first half of this year.
