logo-loader

Rotork issues profit warning due to contract delays

Published: 11:16 17 Sep 2015 BST

Ophir(rig)-(Resized)
Rotork makes valves for the oil and gas sector

Shares in FTSE-350 company Rotork (LON:ROR) fell again today as continued weak oil prices have forced the company into a profit warning.

The valve maker for the oil and gas sector has seen its shares fall 35% so far this year, and was 15% down at 183p this morning.

Rotork said: “We have seen an increased number of project deferrals and cancellations, with trading in August particularly weak.”

A number of orders expected to be placed in the third quarter have been delayed with delivery now anticipated in 2016, impacting the group's results for the current year, it said.

Despite its "lean business model" and continuous cost-cutting measures, the company said it "will not be sufficient to mitigate the profit impact of lower revenues in the year.”

Broker Investec, said the acquisition of Bifold last month, despite adding £50mln to its sales, increased its exposure to the struggling oil and gas sector.

“We assume that the latter is responsible for the second half delays and profit warning,” the broker added.

Investec had expected Rotork to hit sales of £555mln with pre-tax profit of £137mln, before the company revised down its expectations for the year.

Now, it believes a sales target of £535mln with pre-tax profit around £119mln is more likely.

Chesnara reports strong 2023 results with improved cash generation and...

Chesnara PLC (LSE:CSN) chief executive Steve Murray discusses the company's full-year results for 2023 with Proactive's Stephen Gunnion, describing them as strong and particularly highlighting £53 million in commercial cash generation and a dividend coverage of around 150%. The company has...

31 minutes ago