Profits have bounced back at Rotork, Bath’s largest manufacturing company, despite ongoing challenges in its markets – but its shares fell after its chief executive announced he is to quit.
The group, which makes specialist valves for the global oil, gas, water and chemical industries, posted an 8.4% rise in pre-tax profits to £54.1m for the six months to June 30.
The increase, higher than market expectations, came on revenues up 1.8% to £288m.
Orders were also up, by 3.2% to £298m, as markets gradually recovered from the impact of the Pandemic.
Chief executive Kevin Hostetler, pictured – who is widely viewed as transforming the fortunes of the group over the past few years – hailed the results, saying: “I’m pleased to report that Rotork returned to underlying growth in the first half.
“Our strategy of focusing our sales teams on specific end markets and investing in targeted geographies and in aftermarket activities is delivering results.
“Margin improvement continued, despite significantly higher logistics and commodity costs, through our focus on managing inflation and the continued successful execution of our Growth Acceleration Programme.
“Our first half performance demonstrates good momentum, and whilst mindful of the risks of additional Covid-19 disruption and of continuing component shortages, we anticipate 2021 to be a year of progress on a constant currency basis.”
However, Rotork’s share price fell by 6.5% when the group released a separate statement to the London Stock Exchange announcing Mr Hostetler’s resignation.
It said he had told the board he plans to return home to the US with his young family next year.
It continued: “Kevin is fully committed to leading Rotork through his notice period, and to ensuring an effective handover to his successor, at which time he will step down from the board and as chief executive officer of Rotork. This process is expected to conclude by June 30 next year.”
It said the board, led by chairman Martin Lamb, had started the search for a new CEO.
Mr Lamb added: “Since joining Rotork in early 2018, Kevin has demonstrated impressive leadership in developing and successfully implementing our Growth Acceleration Programme.
“On leaving, he will have overseen the vast majority of this five-year programme, which has fundamentally reshaped our core platform and processes, strengthened our management team, and positioned Rotork for a bright future.
“On behalf of the board I would like to thank Kevin for his substantial contribution to date and his ongoing commitment to leading Rotork through to the middle of next year.”
Mr Hostetler joined Rotork in February 2018 from US telecoms and engineering consulting firm FDH Velocitel, where as CEO he led a three-year turnaround in its fortunes.
At the time Mr Lamb said Mr Hostetler arrived with an “impressive track record of delivering profitable growth in a number of highly respected and innovative global engineering businesses, with significant experience in the flow control sector”.
He replaced Peter France, whose shock departure from the chief executive role the previous summer after nine years in the job and 28 years at Rotork triggered a 5% fall in its share price.
Rotork’s shares were this afternoon trading at 332.4p, their lowest for seven months.
