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Rotork forecasts currency headwinds for 2018
Rotork said revenue and profit growth would be constrained by currency swings this year as the marker of industrial valve actuators reported an increase in operating profit for 2017.
Adjusted operating profit for the year to the end of December rose 7.9% to £130.2m as revenue rose 8.8% to £642.2m. Excluding currency gains, profit rose 2.5% and revenue increased 2.3%.
Reported pre-tax profit fell 11.5% to £80.6m as Rotork wrote down the valuation of assets linked to the oil market by £21.6m. At constant currencies, pre-tax profit dropped 17%.
Rotork makes about 12% of its revenue in the UK compared with 23% for the US and 30% from Europe. The company gained from the pound's weakness on currency markets in 2017 but sterling's rise in 2018 puts pressure on profit and revenue growth for the current year. Costs will also rise this year, Rotork said.
The 2017 figures are the last set of results before Kevin Hostetler joins as chief executive on 12 March. The company has been without a chief executive since Peter France left in July because the board thought a new boss was needed to improve growth and margins.
Chairman Martin Lamb, who has run the company since France's departure, said: "During the year, we saw a return to more favourable market conditions. We saw modest recovery in certain markets and geographies in the first half of the year with a continued improvement during the second half.
"Our revenue forecasts for 2018 currently reflect improving order momentum, pointing to mid to high single digit organic revenue growth year on year. However, reported results will be impacted by currency movements. Based on current rates we can expect a 4-5% headwind on both revenues and profits compared with last year."
Rotork shares fell 4% to 274.6p at 09:03 GMT.