Rotork's interim results hit by slump in oil and gas market

4th Aug 2015 09:40

(ShareCast News) - Actuators and flow control equipment manufacturer Rotork posted a decline in interim revenue and pre-tax profit in the wake of a slump in oil and gas prices.The FTSE 250 group posted an 8.4% decline year-on-year in pre-tax profit to £56.3m, while revenue fell 1.5% to £274.2m and order intakes tumbled 9.5% to £274m.Sales declined 2% to £274m, marginally below consensus of £275m, but adjusted operating profit totalled £65m, some 6% higher than expectations.Rotork attributed the disappointing performances to the persistent softness in the oil and gas markets."The continued weakness of the oil price and geopolitical uncertainty in some of our key markets resulted in a challenging trading environment during the first half, with lower overall activity levels and an increased number of project deferrals and cancellations," said group chief executive Peter France.France added that while the company expects the oil and gas markets to remain challenging in the second half of the year, it anticipates results to be weighed towards the second six months of the year and it was confident of meeting its annual expectations.However, despite the results, analysts at Societe Generale remained confident the company was on the right track, particularly as it has launched a cost-saving programme which should result in £8m savings, amounting to 1.3% of 2014 sales."Maintained outlook, decision by management to accelerate cost initiatives and a reasonably priced small acquisition should all be taken well by the market in our view," they said in a note, adding they reiterated their target price and their 'hold' rating on the stock.Rotork shares were up 4.26% to 225.20p at 0903 BST.