* Weir H1 pretax profit up 24 pct to 178 mln stg, sees FY ahead
* Rotork reports record order book
* Manufacturing PMI shrinks in July for first time in 2 yrs
* Aero engineers Meggitt, Senior, report forecast beating results
* Sector consolidation on the cards
By Lorraine Turner
LONDON, August 2 (Reuters) - British manufacturing companies that supply booming oil and gas, and aerospace sectors, are reaping the rewards of a focus on export markets that has allowed them to buck the sluggish growth trend of firms more reliant on the UK.
Pumps and valves maker Weir and Rotork , which makes valve control systems for the oil, gas and water industries, on Tuesday hiked estimates for full-year earnings. And aero engineers Meggitt and Senior both reported forecast beating first-half results this week.
They produced strong performances even though British manufacturing shrank in July for the first time since the country was in recession two years ago.
The Markit/CIPS manufacturing PMI survey showed that domestic demand fell sharply last month, with firms that supply the consumer sector particularly hard hit.
But manufacturers with their eyes on overseas markets experienced a different trend. New export orders rose at their fastest rate in three months, and firms focused on emerging markets, and industries such as the booming mining, oil and gas and aerospace sectors, reported stellar growth.
Weir, which posted a 24 percent jump in first-half pretax profit, predicted full-year results would be better than previously hoped as conditions remained buoyant in the North American upstream market as the high oil price drove growth in unconventional drilling. .
It said it would inject $75 million into its flourishing oil and gas business — with orders soaring 82 percent in the period — to increase manufacturing capacity by approximately 20 percent over the next 18 months, its Chief Executive, Keith Cochrane told journalists.
Aero engineers were helped by a ramp up in production by their biggest customers - plane makers Airbus and Boeing - as demand for new planes continues to grow.
A recovery in air travel and soaring oil prices, which are forcing airlines to renew fleets with newer, more fuel efficient planes is driving demand.
“If you’re a key player in the supply chain to the aerospace sector — like the oil and gas sectors — those cycles are so long term, they’re not affected by the short-term bumps that we’re seeing around at the moment,” said Mark Swift, spokesman at The Manufacturers’ Organisation.
“The UK PMI number might reflect to a large degree what’s happening in the overall UK economy vis-a-vis the consumer. If you’re linked to that, your prospects are not exactly rosy, but if you’re export orientated, then it’s the flipside of that,” he added.
Rotork , and Cookson , whose end markets are principally steel, electronics and retail, said there were no signs of a slow down, and that their full-year sales would beat earlier estimates.
“BRIC countries especially and also the Middle East are very strong with oil & gas, LNG, power and water showing signs of continued spend,” said Rotork’s Chief Executive Peter Francis.
The results from Weir, Cookson and Rotork shared similar traits said Oliver Wynne-James at Panmure Gordon, but he noted that their upgrade to estimates have largely been factored into its forecasts.
“Higher than expected revenues, selectively weaker divisional margins, poor profit drop throughs, and weaker than expected control of cash flow. All three managements however are not seeing a slow down,” he said.
Speciality chemicals maker Elementis also posted a market-beating pretax profit for the first half.
The sector has also seen a high level of M&A activity in the past 12 months with Cooper Industries vying unsuccessfully for Laird more recently, and Charter International rejecting a 1.4 billion pound approach from Melrose .
Analysts at Goldman Sachs said Weir Group could be a target for a large industrial conglomerate given its growth prospects in unconventional hydrocarbons.
In turn, Weir’s Cochrane said the company would continue to make small, choice acquisitions in emerging markets and the oil and gas markets in North America, with a war chest of between 500-600 million pounds.
Shares in Weir were down 0.1 percent at 1206 GMT, while Rotork surged 9.9 percent. Shares in Cookson were down 4.9 percent, while Meggitt fell 1.3 percent and Elementis was down 0.3 percent. (Additional reporting by Rhys Jones, Suzannah Benjamin and Tresa Sherin Morera in Bangalore. Editing by Jane Merriman)