August 5, 2014 / 7:11 AM / 3 years ago

UPDATE 2-Valve control maker Rotork sees higher second-half revenue

* H1 revenue rises to 278.5 mln stg vs 276.1 mln stg

* First-half order intake up 2.9 pct

* H1 pretax profit falls 3.3 pct to 61.5 mln stg

* Shares rise as much as 3.5 pct (Adds outlook, CEO, analyst comments; updates share movement)

By Aashika Jain

Aug 5 (Reuters) - Rotork Plc, a maker of valve controls and actuators, anticipates second-half revenue to be higher as it saw a surge in orders in the second quarter, primarily in its largest oil and gas markets, Chief Executive Peter France said.

Shares in the company rose as much as 3.5 percent in morning trade on Tuesday, ranking the stock amongst the top gainers on the FTSE-250 index.

“We are seeing more industrial and mining activity, as more and more sites are automated helping us in our supply of flow-control equipment,” France told Reuters.

Rotork, which generated 56 percent of revenue from the oil and gas sector in the first half, said order intake rose 2.9 percent to 302.7 million pounds ($511 million) during the period.

Excluding the impact of a strong pound and acquisitions, order intake increased by 7.1 percent.

The company’s biggest unit, Rotork Controls, reported a 3.6 percent jump in first-half orders. The unit makes electric valve actuators for specialised processing and environmental applications.

“The company’s markets are still active and it has not lost its ability to win a substantial share of available business,” Investec said in a note to clients and kept its “buy” rating on the stock.

UBS raised its price target on the stock to 2750 pence from 2650 pence on strong order growth, supporting a confident medium-term view.

Rotork’s electric, pneumatic and hydraulic actuators and control systems are also used in marine, mining, food, pharmaceutical and chemical industries.


The company reported a 3.3 percent fall in pretax profit for the six months ended June 30, hurt by a strong pound that offset its robust order intake.

Pretax profit fell to 61.5 million pounds from 63.6 million pounds a year earlier.

The Bath-based company generates only 11 percent of its revenue in pounds.

The pound gained 3.3 percent against the U.S. dollar and 3.7 percent against the euro in the first half of the year.

“The bottom line is that the forex impact does not really matter and although Rotork’s growth is clearly less fiery than it once was, this is still in fairness as rock solid performance,” Morgan Stanley said in a note to clients.

Revenue at Rotork, which has made a string of acquisitions in the last few years, grew 0.9 percent to 278.5 million pounds.

CEO France said that the effect of its acquisition of South Korean firm Young Tech Co Ltd and Rotork Midland, which it bought this year, would be reflected in the full-year results.

Shares in the company were up 1 percent at 2782 pence at 0940 GMT.

$1 = 0.5924 British Pounds Editing by Gopakumar Warrier

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