Rotork (ROR) H1 2024 earnings summary

Executive summary

• Group revenue grew 11.6% OCC to £361m, with Oil & Gas and Water & Power up over 20% year-over-year, while CPI declined due to lower mining activity.

• Adjusted operating profit rose to £76.5m (up 17.1% year-over-year), with operating margin improving to 21.2% and ROCE rising to 36.9%.

• Strong cash conversion at 106%, with net cash at period end of £119m after significant shareholder returns.

• Interim dividend increased 7.8% to 2.75p; £18m of £50m share buyback completed in H1.

• Growth+ strategy and Target Segments approach are driving above-group growth, especially in electrification, water infrastructure, and site services.

Financial highlights

• Revenue reached £361m, up 8% reported and nearly 12% OCC year-over-year.

• Adjusted EPS rose 18% to 6.9p; reported EPS up 13.7% to 6.0p.

• Adjusted operating margin increased to 21.2%, up 170–190bps year-over-year.

• Net working capital as a percentage of sales reduced to 26.4% from 27.3%.

• Order intake was £374m, marginally ahead OCC despite a high base in H1 2023.

Outlook and guidance

• Full-year expectations unchanged; order intake in June and July was encouraging, with good revenue visibility for H2.

• Currency headwind expected at 4%; CapEx guidance at £15m; business transformation and ERP investment at £20m.

• Continued progress anticipated for 2024 on an OCC basis.