* Agrees to buy Young Tech Co for 64 mln stg
* Seeking more acquisitions - CEO
* Full-year operating profit rises 8.5 pct
* Shares rise as much as 5.5 pct
By Aashika Jain
March 4 Valve-control systems maker Rotork Plc
, fresh from a string of acquisitions that underpinned
profit growth last year, has agreed to buy South Korean firm
Young Tech Co Ltd for 64 million pounds ($107 million).
The FTSE-250 company, which makes actuators for the
automation of industrial valves, is also seeking more
acquisitions as demand from the oil and gas sector grows, Chief
Executive Peter France told Reuters.
Rotork's shares rose as much as 5.5 percent on Tuesday,
making it one of the top percentage gainers on the FTSE-250
The Bath-based company, which also supplies valve-control
systems to power and water utilities, has bolstered its profit
through a string of acquisitions in the last few years.
Rotork will fund its purchase of YTC, which makes valve
positioners and accessories, from its own cash pile and existing
bank facilities, the company said.
Demand for the company's main product, valve-control
actuators, has surged as oil and gas drillers come under
increasing pressure to improve operational safety. Rotork said
its sales to the oil and gas market rose 24 percent in 2013.
Speaking to Reuters after Rotork reported a jump in
full-year profit, France said demand for electric actuators
would rise as shale fields are developed and new storage tanks
and oil and gas pipelines built.
He said Rotork, in addition to planning more acquisitions,
would launch several new products in the first half of 2014.
Most of its acquisitions to date have been in the controls
business, which includes actuators and accounts for nearly 60
percent of the company's total revenue.
The company's electric, pneumatic and hydraulic actuators
and control systems are also used in the marine, mining, food,
pharmaceutical and chemical industries.
On Tuesday, Rotork reported an 8.5 percent jump in full-year
operating profit, discounting exchange rate fluctuations.
Adjusted operating profit for the year ended Dec. 31 rose to
151.4 million pounds, while revenue increased 6.3 percent to
578.4 million pounds.
Last year alone, Rotork bought Italian company G.T.
Attuatori and U.S. company Renfro Associates Inc, as well as
actuator service company Flowco and actuator maker Schischek.
Though overall demand will be strong in 2014, France said
some markets, including the Indian power market, might be weak.
The strength of sterling relative to the dollar and the euro
will also weigh on 2014 earnings for a company that earns only
about 7 percent of its revenue in Britain. Sterling gained 8.8
percent against the dollar between June 28 and Dec. 31.
"Based on last year's rates, we are looking at a headwind of
4 percent from currency fluctuations (in 2014)," France said.
Investec analyst Michael Blogg said he would leave his 2014
estimates for the company "broadly intact".
"The platform carried forward from 2013 should offset any
additional forex headwind," he wrote in a note to clients.
Rotork's stock, which underperformed the FTSE All Share
Industrial Engineering Index in 2013, was up 5.1 percent at 2776
pence at 1036 GMT on the London Stock Exchange.