Rotork (LON:ROR) delivered broadly in line with FY17 expectations. Order book growth was encouraging while FY17 adjusted operating margin moved up from H117 to close to FY16 levels. Kevin Hostetler will take over as CEO from 12 March, completing the management transition in a timely manner. Determination to bring the company back to former growth and margin prospects is evident. The route map for the next three to five years is underpinned by investment in R&D and front-end services ensuring Rotork delivers a valuable proposition to its customers as end-markets improve.
FY17 results delivered to expectations
Rotork reported FY17 revenue growth in all divisions and in all end-markets. FY17 revenues of £642.2m (FY16: £590.1m) represented 2.3% organic growth and were ahead of consensus expectations of £637.9m. Controls (51% of group sales) grew orders and revenue by 6.9% and 3.3% organically respectively, with momentum visible in North America and EMEA. At the group adjusted pre-tax level, £124.8m (FY16: £117.9m) fell slightly short of consensus expectations of £124.9m, however FY17 adjusted EPS of 10.6p (FY16: 10.0p) was in line with consensus. FY17 dividend of 5.4p (FY16: 5.1p) represented a 5.9% increase and cover of 1.2x.
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