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Rotork shares weak as engineer expects currency headwind on revenues and profits

The FTSE 250-listed engineer said its 2017 pre-tax profits fell by 11.5% to £80.6mln, down from £91.1mln a year earlier, although revenue increased by 8.8% to £642.2mln
Martin Lamb, Rotork's executive chairman, said: "Based on current rates we can expect a 4-5% headwind on both revenues and profits compared with last year."

Rotork PLC (LON:ROR) shares shed nearly 5% on Tuesday after the industrial flow control equipment manufacturer reported a fall in 2017 pre-tax profits and said it expects a 4%-5% currency headwind on both revenues and profits in 2018.

The FTSE 250-listed engineer said its 2017 pre-tax profits fell by 11.5% to £80.6mln, down from £91.1mln a year earlier, although revenue increased by 8.8% to £642.2mln, up from £590.1mln the year before.

READ: Rotork upgraded by HSBC, which sees more orders on back of oil price rise

The group said its underlying operating profit increased by 8% to £130mln, slightly below Liberum Capital’s estimate of £134mln, with a 10-basis point decrease in its adjusted operating margin to 20.3%, due to inflationary pressures.

Martin Lamb, Rotork's executive chairman, said: "Our revenue forecasts for 2018 currently reflect improving order momentum, pointing to mid to high single-digit organic revenue growth year-on-year.

"However reported results will be impacted by currency movements. Based on current rates we can expect a 4-5% headwind on both revenues and profits compared with last year."

The firm raised its full-year dividend by 5.9% to 5.40p.

In lunchtime trading, Rotork’s shares were down 4.7% to 272.5p.

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Rotork Timeline

August 07 2018

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