Bath's Rotork upbeat on 2024 after strong first half

Bath - headquartered Rotork, which manufactures flow control equipment, said it was upbeat on prospects for the rest of 2024 as it reported a strong first half.

The firm told investors that its strategy was "delivering" with revenue for the first six months 8% higher year-on-year on a reported basis and 11.6% ahead on an organic constant currency (OCC) basis.

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Oil and gas and water and power sector sales were well ahead, while chemical, process and industrial were lower as a result of reduced activity in the mining sector, it said.

Reported pre-tax profit in the six months was £69.7 million, up from £60.2 million in the first half of 2023, on revenue, which was 8% higher at £361.4 million.

The company declared an interim dividend of 2.75p, up 7.8% on the first half of 2023.

"The outlook for our end markets remains positive, order intake was encouraging in June and July and our order book gives us good visibility," said CEO Kiet Huynh.

"Our full year expectations are unchanged and we continue to anticipate 2024 to be another year of progress on an OCC basis."

"The benefits of the Target Segment approach under Growth+ are increasingly apparent," added the company boss.

"Target Segment sales, which represent around half of group revenue, are growing strongly, particularly in water infrastructure, desalination, chemicals and up- and mid-stream oil & gas electrification. Rotork Site Services is also growing strongly."

Updating on its markets, the firm noted that the recovery in the oil and gas sector activity first experienced in the second half of 2021 had continued through the first half of 2024.

"Hydrocarbons will have an important role in the world's energy mix for years to come and following an extended period of industry under-investment a catch-up is now underway," it said.

It added that the electrification of upstream and midstream operations to reduce the greenhouse gas emissions intensity was benefitting Rotork's oil and gas division and the upstream and midstream electrification sector represented 8% of the group's first half sales.

"The global chemicals and specialty chemicals industries have experienced sluggish demand over the last year or so due to the energy crisis in Europe, recession concerns in North America, and in China a slower than expected recovery from Covid-19 and a property sector downturn," it said , but added there were "tentative" signs of improvement in North America and China

Meanwhile, the critical HVAC market has a positive outlook, driven by the data centre, tunnel ventilation and marine sectors, it added.