REG - Rotork PLC - 2024 full year results
11/03/2025 07:15
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RNS Number : 0823A Rotork PLC 11 March 2025
11 March 2025
Rotork plc
2024 full year results
Growth+ delivering our vision with another year of strong sales growth and
margin progress
Strategic bolt-on acquisition agreed and £50m share buyback announced
Entered 2025 with confidence, expecting a year of progress
Adjusted highlights 2024 2023 % change % change OCC(3)
Order intake(1) £744.3m £723.7m +2.8% +6.1%
Revenue £754.4m £719.1m +4.9% +8.2%
Adjusted(2) operating profit £178.4m £164.5m +8.5% +12.8%
Adjusted(2) operating margin 23.6% 22.9% +70bps +100bps
Adjusted(2) basic earnings per share 15.9p 14.6p +8.7%
Cash conversion(4) 119% 120% -
Reported highlights 2024 2023 % change
Revenue £754.4m £719.1m +4.9%
Operating profit £135.9m £148.8m -8.7%
Operating margin 18.0% 20.7% -270bps
Profit before tax £140.5m £150.6m -6.8%
Basic earnings per share 12.1p 13.2p -8.1%
Full year dividend 7.75p 7.20p +7.6%
Summary
· Another year of good progress with revenue 8.2% higher year-on-year
on an OCC basis. Reported revenue was 4.9% ahead despite a significant foreign
exchange headwind
· Adjusted operating margin was 70bps higher year-on-year at 23.6%
(2023: 22.9%)
· Acquisition of Noah, a leading South Korean electric actuator
manufacturer, for an enterprise value of £44m agreed post period end
(expected to close in the coming days), broadening our electric actuator
offering
· Another £50m share buyback announced
· At a divisional level, Oil & Gas and Water & Power revenues
grew low double digits year-on-year (OCC). Chemical, Process & Industrial
(CPI) returned to sales growth in the second half
· Rotork Service, our global service network and a key differentiator
in our industry, performed strongly growing ahead of Group revenues
· Group order intake increased 6.1% year-on-year (OCC) with all
divisions ahead
· Continued momentum across all Growth+ pillars with Target Segments
sales growth 9% on an OCC basis. Target Segments represented around half of
Group sales
· Strategic highlights included the successful opening of our new China
manufacturing facility, the launch of new products and digital services and
the rebranding of Rotork Service
· The UK defined benefit pension scheme was de-risked via a bulk
annuity purchase, causing a one-time non-cash charge that reduced the
operating margin by 270bps to 18.0% year-on-year
· Closing net cash was £125.3m and broadly unchanged over the period
after the return of £113m to shareholders via dividends and share buyback.
Cash conversion was strong at 119%, driven by improved net working capital to
sales. ROCE(4) was 37.3% (up 340bps)
Kiet Huynh, Chief Executive, commenting on the results, said:
"We delivered another year of strong progress in 2024 with good OCC sales
growth, healthy margin improvement and an excellent cash flow performance.
"The delivery of Growth+ continues and the benefits of the strategy are
evident in our improved financial performance. Since the programme launch in
2022, Rotork revenue has grown at a 10.0% CAGR on an OCC basis and adjusted
operating margins have increased 110bps to 23.6% after Growth+ investments.
The benefits are not only financial. We are also making strong progress under
the Customer Value pillar, putting the customer at the forefront of everything
we do. Under our Innovative Products & Services pillar we launched
important new products and recently agreed to acquire a leading South Korean
electric actuator manufacturer, which will broaden and strengthen our product
offering.
"Rotork is highly cash generative and benefits from having a strong balance
sheet providing the financial flexibility to pursue strategic bolt-on
acquisitions whilst also returning cash to shareholders, including another
£50m share buyback announced today.
"Three years into the Growth+ programme we remain confident of delivering our
financial ambition of mid to high single digit sales growth and mid-20s
adjusted operating margins over time. We have entered 2025 with confidence and
expect a year of progress on an OCC basis."
(1) Order intake represents the value of orders received during the period.
(2) Adjusted(4) figures exclude the amortisation of acquired intangible assets
and other adjusting items (see note 4).
(3) OCC(4) is organic constant currency results. During the year the
calculation of OCC performance was changed from translating reporting period
results at the prior period average exchange rates to translating the prior
period results at the reporting period's average exchange rates. This change
enables greater comparability of results with previous periods. Adjustments
for acquisitions and/or disposals are unchanged - acquired businesses are not
included until owned for more than one year and are then included on an equal
perimeter basis, disposed businesses are excluded entirely. Applying the
previous calculation methodology to the 2024 results does not result in a
material difference in the OCC performance for the year.
(4) Adjusted figures, organic constant currency ('OCC') figures, cash
conversion and ROCE are alternative performance measures and are used
consistently throughout these results. They are defined in full and reconciled
to the statutory measures in note 2.
Rotork plc Tel: +44 (0)1225 733 200
Kiet Huynh, Chief Executive Officer
Ben Peacock, Chief Financial Officer
Andrew Carter, Investor Relations Director
FTI Consulting Tel: + 44 (0)20 3727 1340
Nick Hasell
Susanne Yule
There will be a virtual presentation for analysts and institutional investors
at 8.00am GMT today with access via
https://www.investis-live.com/rotork/679a5bb8242e93000e381604/vwerd. Please
join the webcast a few minutes before 8.00am to complete registration.
Summary
Purpose: keeping the world flowing for future generations
Our Purpose, as well as our sustainability vision, is 'keeping the world
flowing for future generations'. Our purpose is a powerful motivator and
drives everything that we do. We want to help drive the transition to a clean
future where environmental resources are used responsibly. We have a major
role to play in the transition to a low-carbon economy, as well as helping
preserve natural resources such as fresh water and eliminating energy sector
methane emissions.
Health & safety: our number one priority
The safety of our people, partners and visitors is our number one priority,
and our objective for health and safety is zero harm. In 2024, we recorded a
lost-time injury rate of 0.08, in line with the 0.08 recorded in 2023. Our
total recordable incident rate was 0.22 (2023: 0.26).
In 2024, we transitioned from our internally managed pulse survey, which
primarily measured employee satisfaction, to a comprehensive engagement survey
conducted with a third-party partner. This strategic shift allows us to
benchmark our engagement levels against industry standards and enhance our
efforts to foster meaningful engagement across Rotork.
We were pleased that 80% of our employees participated in the new survey. We
retained our 'Rotork as a Place to Work' question and scored 7.1 out of 10 in
2024.
The insights gained from this new survey will support the work we have done in
2024 to develop our Company culture, enabling us to measure effectively and
cultivate our cultural initiatives in the years to come.
We have a committed team who are proud to work at Rotork and determined to
deliver on our Growth+ ambitions. We offer our thanks and appreciation for all
their efforts throughout 2024.
Cultural evolution: building a stronger Rotork
In 2024, we progressed an extensive programme to fully understand our culture,
identifying both its strengths and any aspects that might constrain our future
success. The programme included workshops with 800 employees across 27
countries. The Board actively reviewed progress over the year and provided
strategic direction to ensure alignment with our Growth+ objectives. This
guidance underscored the importance of evolving our culture to support
long-term success and foster an environment where innovation and collaboration
thrive. Through this work we further defined our core cultural DNA by
identifying our key behaviours which will drive success: We Value Our
Customers, We Grow Together and We Win as a Team.
Our cultural DNA captures what makes Rotork unique and establishes the
foundation for how we work, interact and succeed collectively. This evolution
is a multi-year journey to create a more connected, customer-focused and
collaborative organisation. By aligning our practices with our new cultural
values and behaviours, we are better positioned to address challenges, seize
opportunities, and unlock our full potential.
Environmental performance: delivering on our GHG emissions reduction targets
Sustainability is a major focus for Rotork. Whilst our impact in enabling our
customers to improve their environmental performance likely exceeds the
Group's environmental footprint, the latter is no less important. Our total
scope 1 and 2 (market-based) emissions decreased by 7% in 2024 compared with
2023, reflecting the implementation of energy efficiency projects and
investment in on-site renewable generation.
Our SBTi-validated near-term greenhouse gas (GHG) emissions reduction targets
are:
• To reduce our absolute scope 1 and 2 GHG emissions by 42% by 2030 from a
2020 base year
• To reduce our absolute scope 3 GHG emissions from the use of sold products
by 25% by 2030 from a 2020 base year
• That at least 25% of our suppliers by emissions covering purchased goods
and services will have science-based targets by 2027
We target net-zero by 2035 for scopes 1 and 2 and by 2045 for scope 3.
Underlining the importance we attach to achieving our net-zero targets, scopes
1 and 2 GHG reduction targets are included in our senior team's long-term
remuneration opportunity.
The sustainability highlight of the year was the opening of our new China
manufacturing facility which was designed with sustainability as a key
priority and attained a LEED Gold certification. We completed a project to
decarbonise heating at our Manchester (UK) facility. Elsewhere we refreshed
our Task Force on Climate-related Financial Disclosures (TCFD) approach and
disclosures and commenced our preparations for the EU Corporate Sustainability
Reporting Directive (CSRD), including conducting our first double materiality
assessment. Rotork is rated AAA in the MSCI ESG ratings assessment.
Growth+ strategy: Target Segments approach delivering significant benefits
The starting point of our Growth+ strategy is our Purpose, 'keeping the world
flowing for future generations'. Our Purpose is a powerful motivator and
recognises the role we play in making our world a great place to live, and the
role we play in helping improve the safety, environmental and social
performances of not just ourselves but also our end users, customers,
suppliers and communities.
Our vision is for Rotork to be the leader in intelligent flow control. This
recognises the ever-increasing importance of connectivity to our end users.
Today's intelligent flow control systems ensure safety, are reliable,
efficient and easy to use, and play a vital role in ensuring the uptime of our
end users' operations (including through predictive and preventative
maintenance).
Our financial ambition is to deliver mid to high single digit revenue growth
and mid-20s adjusted operating margins over time. Three powerful megatrends
help drive our growth: automation, electrification and digitalisation, as well
as the trends of sustainability, decarbonisation, energy security, water
scarcity and water quality. Our Growth+ strategy is designed to drive our
growth and to balance making investments with achieving margin progression. At
the core of our strategy are three pillars: Target Segments, Customer Value
and Innovative Products & Services, each underpinned by our focus on
'Enabling a Sustainable Future'.
Our 'Target Segments' are key segments within each of our divisions where
there are significant opportunities for profitable growth. We are prioritising
investment into these areas, helping us to grow faster than our overall
markets. We have already seen significant benefits from our focus on Target
Segments which represented around half of Group sales in 2024 and grew 9%
year-on-year OCC.
Target Segment successes in Oil & Gas included in upstream and midstream
electrification and LNG. In upstream electrification, Rotork supplied electric
actuators and related services to a North Sea oil and gas producer for its
latest platform. The platform is designed to be remotely operated and to
require only occasional maintenance visits. Also in upstream electrification,
Rotork received a significant order from a major oil and gas producer for
electric actuators equipped with integral shutdown batteries which will be
retrofitted on onshore wellheads, replacing older, less advanced models
previously supplied by a competitor. In LNG, revenues grew in the period as
earlier liquefaction orders started to ship. Rotork is positioned to support
the liquefaction capacity increase expected in 2025 and beyond.
Successes in Chemical, Process & Industrial included activity in the
Target Segments of specialty chemicals and mining. In specialty chemicals,
Rotork supplied equipment to a major greenfield urea plant being built in
Western Australia. Demand for urea is forecast to grow rapidly, driven by
agricultural and transportation applications. In mining, Rotork electric
actuators were selected by a customer for an important water reuse project.
When the project is completed, the mine will no longer have to draw water
required for processing from a local river.
In Water & Power, examples of Target Segment successes included in
wastewater treatment and alternative energy. The reuse of water is
increasingly common, including for irrigation and industrial processes. Rotork
electric actuators were chosen for a major water reclamation project in
Singapore. In alternative energy, geothermal power has the potential to be a
bigger source of renewable energy than wind and Rotork products play an
important role in geothermal plants, including in a major geothermal facility
in New Zealand.
We continued to make strong progress under the Customer Value pillar, which
puts the customer at the forefront of everything we do. During the year we
launched our new Group website. The new website is an important step in a
multi-year programme of customer experience improvement. In November we held
the formal opening ceremony for our new facility in China. The 23,000m(2)
facility is strategically located in Changshu and was developed with
sustainability as a key priority. Its 2,500 roof-mounted solar panels will
generate an estimated 1,500 MWh of renewable electricity annually.
In Innovative Products & Services, we launched integrated ethernet
functionality for our IQ range. This is an important product enhancement which
further differentiates our flagship electric actuators, extending
compatibility, enabling higher data transfer volume and speeds, eliminating
the requirement for gateway devices and operating seamlessly with our
intelligent asset management (iAM) system. Integrated ethernet has multiple
applications across all three Rotork sectors and the launch has been
particularly well received by water industry end users.
In March 2025 we agreed to acquire Noah Actuation (Noah) to broaden and
strengthen our product offering in electric actuators. The acquisition's
closing is expected in the coming days. Noah is headquartered in Seoul, South
Korea and its acquisition is fully aligned to the Growth+ strategy and to key
Target Segments, especially with Water & Power, Chemical, Process &
Industrial and upstream electrification within Oil & Gas. We estimate that
Noah will deliver revenue and adjusted EBITDA of £17.5m and £3.5m
respectively in the twelve months to December 2025.
Market update: a largely positive outlook for global flow control markets
Elections played a major part in global events in 2024, with almost half of
the world's population voting in national elections during the year (according
to Reuters). The most significant from a market perspective was the
Presidential election in the US. The election has the potential to have
significant economic effects on global markets, including on manufacturing and
energy.
The new US government has signalled a more local approach to its industrial
strategy which will have implications for global manufacturing. However, we
believe that any risk of increased import tariffs to Rotork would be largely
mitigated by our predominantly local-for-local manufacturing footprint.
Energy security and the energy transition have been major global themes for
several years and are likely to remain so. The US's energy independence is
expected to be of higher priority, potentially meaning more exploration and
production activity. The energy transition remains a priority, but with the
fossil fuel industry potentially having a greater part to play in the
transition, for example through LNG, biofuels, carbon capture and hydrogen.
Whilst US emissions reduction regulations might be of slightly lower
importance at the Federal level, these are likely to remain important at state
and industry levels.
In recent years, investment in global energy sector infrastructure has
accelerated, reflecting both a previous period of underinvestment and the
importance of the role of hydrocarbons in the world's energy mix for years to
come. The electrification of upstream and midstream operations to reduce the
greenhouse gas intensity of processes that commenced with COP26's Global
Methane Pledge (in 2021) continues and methane emissions were again a major
topic at COP29 in Azerbaijan. The upstream and midstream electrification
sector represented close to 10% of Rotork Group sales in 2024.
The downstream oil and gas sector was particularly active in 2024, with
another significant year for net refining capacity additions globally and for
the 'replumbing' of hydrocarbon transportation and storage networks
necessitated by sanctions on Russia. The near-term outlook remains positive,
with more years of net refining additions in prospect. In the medium term,
fewer additions are expected, with investment instead targeted at
modernisation and flexibility. Refinery shutdowns are expected to be
relatively rare with refiners choosing instead to convert sites at end of life
to produce renewable fuels, or to industrial hubs (for example producing
low-carbon electricity or hydrogen) or storage depots.
The outlook for the LNG export market is increasingly positive. The US
currently has annual export capacity of around 90m tonnes according to
Bloomberg New Energy Finance. An additional 50m tonnes is already permitted
and set to be commissioned in the next several years, with another 180m tonnes
of capacity going through planning stages. Additional export capacity is also
under way in Qatar and Australia.
The upstream oil and gas sector grew in both the Middle East and Europe in
2024. In the Middle East, investment focused on major natural gas projects in
the UAE and Qatar. Investment in Europe increased, following several years of
declines, in response to energy security concerns. In the Americas, Mexico's
oil and gas production was broadly unchanged year-on-year in 2024. US
unconventional onshore activity slowed in the second half, impacted by
election uncertainty and lower hydrocarbon prices. Following the US election,
the outlook for drilling and completion is more positive, although higher
prices may be required for a significant pickup.
There was a generally soft backdrop to chemicals markets in 2024, reflecting
weak demand from key end markets such as construction, automotive and
pharmaceuticals and higher energy prices which particularly impacted the
industry in Europe, especially in bulk chemicals. However, Rotork's chemicals
market strategy is to target niche sectors that offer the potential for above
market growth and CPI sales into this market grew year-on-year in 2024.
Metals and mining markets remain attractive opportunities for Rotork. Whilst
2024 did not see the repeat of the activity in the battery materials sector
experienced in 2023 (i.e. nickel), the wider industry continues to invest to
build the capacity required to deliver the energy transition and to invest in
sustainability projects.
Critical HVAC refers to heating, ventilation and air conditioning systems that
are essential for maintaining specific environmental conditions in sensitive
or high-stakes environments, including temperature, humidity and air quality.
Critical HVAC is typically specified in tunnel ventilation, data centres,
clean rooms and industrial processes such as battery production plants and
semiconductor fabrication facilities where the cost of downtime or failure can
be significant. Critical HVAC markets benefitted from strong demand from data
centre markets in 2023 and 2024 and the cooling requirements of artificial
intelligence focused data centres could represent an exciting future
opportunity.
The outlook for water and wastewater remains positive with continuing
investment in new and existing infrastructure. The market is focused on
delivering water availability, improving water quality, reducing leakage,
efficient water reuse, and automating and digitalising networks and processes.
Significant investment initiatives worldwide are already in progress or set to
begin, including in the US, China, India, the Middle East and the UK. The
desalination market remains active, with projects underway worldwide, most
notably in the Middle East. Reverse osmosis desalination is forecast to grow
high single digits over the medium term (source: Future Market Insights).
The outlook for the global power market is brighter than it has been for some
time, driven by electrification, economic growth, artificial intelligence and,
in the US, the repatriation of manufacturing. In response to this accelerating
demand growth, the power generation industry is stepping up new build activity
as well as plant modernisation, refurbishment and life extension (including in
the traditional and nuclear sectors).
Renewable energy is playing an important role in delivering energy security as
well as the energy transition. According to the IEA, renewables' share in
final energy consumption will be nearly 20% by 2030, up from 13% in 2023.
Rotork products are specified for several applications in offshore wind,
including in HVDC converter cooling systems, geothermal energy plants and
concentrated solar, as well as in facilities producing rechargeable batteries
and solar panels.
Decarbonisation remains a high-potential market for all three Rotork
divisions. 2024 saw the world's second consecutive hottest summer on record
(according to the World Meteorological Organization) with a number of extreme
weather events such as wildfires, droughts and flooding. These events served
to remind us vividly of the urgency of tackling carbon emissions and adapting
to climate change. It is apparent that tackling the climate crisis and
delivering a just energy transition at pace will require a practical approach
including a balance of technologies, with methane emissions reduction, LNG,
carbon capture and storage, sustainable fuels, hydrogen and direct air capture
all having significant roles to play.
Business performance: a year of strong sales growth and margin progress
Group order intake increased 2.8% year-on-year (6.1% on an OCC basis) to
£744.3m. All three divisions booked higher orders for the full year.
Group revenue was 4.9% higher year-on-year (8.2% OCC) at £754.4m. Oil &
Gas sales rose 8.3% (11.7% OCC), with all geographic regions growing and
Europe, Middle East & Africa (EMEA) and Asia Pacific particularly strong.
The division's growth was driven by the downstream and midstream sectors with
upstream sales broadly unchanged year-on-year. CPI sales were 4.1% lower (down
1.1% OCC), with solid growth in EMEA insufficient to offset lower sales in the
Asia Pacific and Americas regions. Water & Power sales were up 9.5% (13.1%
OCC), with all geographic regions delivering double-digit growth. Both sectors
grew strongly, with water outgrowing power.
By geography, EMEA sales by destination grew double digits (OCC) and was
Rotork's fastest growing region. Asia Pacific revenues grew low single digit
year-on-year on an OCC basis, with China growth ahead of the region. The
Americas region returned to growth in the second half and full year revenues
were high single digits ahead (OCC).
In early 2025 we rebranded Rotork Site Services under one global brand, Rotork
Service. Rotork Service is our global service network and a key differentiator
in our industry. It performed well in 2024 with revenues growing faster than
the Group overall. Its Lifetime Management and Reliability Services programmes
have good momentum, as does its Intelligent Asset Management predictive
analytics system. Rotork Service is managed as a separate unit by each of our
divisions and contributed 23% of Group sales (2023: 21%).
Adjusted operating profit was 8.5% higher year-on-year (12.8% OCC) at
£178.4m, reflecting volume growth and positive net price/mix which were
partly offset by wage inflation. Adjusted operating margins were 70bps higher
at 23.6% (100bps higher OCC) and reported profit before tax was £140.5m. The
principal profit adjustments are costs relating to Business Transformation and
the defined benefit scheme settlement.
Return on capital employed was 37.3% (2023: 33.9%), benefitting from an
increase in adjusted operating profit and a decrease in capital employed. Cash
conversion was 119% (2023: 120%).
Dividend and capital allocation: committed to disciplined capital allocation
and progressive shareholder returns
We have a clear and disciplined capital allocation framework. Our priorities,
in order, are organic investment, a progressive dividend, acquisitions and
other shareholder returns. We have increased our dividend each year for over
20 years and have completed 30 acquisitions since 2000. We have demonstrated
discipline and flexibility in using buybacks and special dividends to deliver
shareholder returns, including in March 2024 the launch of a £50m share
buyback programme which we completed in December 2024. Net cash at period end
was £125.3m (31 December 2023: £134.4m). We remain active in looking for
suitable acquisition opportunities, consistent with our Growth+ strategy, and
post period end agreed to acquire Noah, a South Korean headquartered electric
actuator supplier, for an enterprise value of £44m with closing expected in
the coming days.
The Board is recommending a final dividend of 5.00p per share. With the 2024
interim dividend of 2.75p, the total dividend for the year is 7.75p, a 7.6%
increase on the 2023 full-year dividend. This equals 2.1 times cover based on
adjusted earnings per share (2023: 2.0 times). Subject to shareholder
approval, the 2024 final dividend will be paid on 3 June 2025, to ordinary
shareholders on the register at the close of business on 25 April 2025. The
last date to elect for the Dividend Reinvestment Plan (DRIP) is 12 May 2025.
The Rotork DRIP is provided by Equiniti Financial Services Limited. The DRIP
enables the Company's shareholders to elect to have their cash dividend
payments used to purchase the Company's shares. More information can be found
at www.shareview.co.uk/info/drip (http://www.shareview.co.uk/info/drip) .
Consistent with the Group's stated capital allocation policy, the Board has
decided to return a prudent level of cash to shareholders while retaining a
strong balance sheet. As a result, Rotork will be commencing a share buyback
programme of £50m.
Board update: changes and appointments
Tim Cobbold stepped down as a Director of Rotork in December 2024, having been
our Senior Independent non-executive Director and Non-executive Director for
Workforce Engagement. We would like to thank Tim for his considerable
contribution to Rotork over the last six years, and we wish him all the best
in his role as Chair of Spirax Group plc. We are pleased that with effect from
1 January 2025 Andrew Heath agreed to become Rotork's Senior Independent
non-executive Director, and that Vanessa Simms agreed to become Rotork's
Non-executive Director for Workforce Engagement.
We were pleased to recently welcome a new non-executive director to Rotork.
Svein Richard Brandtzæg joined the Board on 20 November 2024. Svein Richard
is currently Chair of dormakaba Holding AG, a non-executive director of Mondi
plc and also Chair of the Council on Ethics for Norges Bank Investment
Management. Svein Richard has further strengthened the diverse mix of skills
and experience on the Board and was appointed Chair of the Remuneration
Committee with effect from 1 January 2025.
Outlook
Three years into the Growth+ programme we remain confident of delivering our
financial ambition of mid to high single digit sales growth and mid-20s
adjusted operating margins over time. We have entered 2025 with confidence and
expect a year of progress on an OCC basis.
Divisional review
Oil & Gas
£m 2024 2023 Change OCC(3) change
Revenue 355.5 328.4 +8.3% +11.7%
Adjusted operating profit 92.0 83.6 +10.0% +13.6%
Adjusted operating margin 25.9% 25.5% +40bps +50bps
Momentum in the oil and gas sector remained strong through 2024. Hydrocarbon
prices remained broadly above investment incentive levels and most sectors saw
higher customer spend, targeting increased output, improved productivity,
electrification and decarbonisation. The industry's electrification initiative
continued with increased activity in the upstream and midstream sectors. These
sectors represented close to 10% of Rotork Group sales in 2024. Investments to
increase the world's LNG export capacity remain ongoing.
Divisional revenue was ahead 8.3% year-on-year and 11.7% year-on-year (OCC).
The midstream and downstream sectors grew strongly whereas upstream sales were
slightly lower due to the non-repeat of offshore projects. Downstream sales
represented 52% of the total (49% in 2023), upstream 24% (27%) and midstream
24% (24%). Downstream sector sales were double-digits higher year-on-year
benefitting from increased refinery and storage activity. EMEA sales grew
strongly year-on-year and the region was the fastest growing, with Middle East
/ Africa growing robustly and the midstream electrification sector
particularly active. Americas sales were ahead mid to high single digit whilst
APAC sales grew low double digits, driven by strong sales growth in India.
The division's adjusted operating profit was £92.0m, 10.0% up year-on-year.
The 40 basis point adjusted operating profit margin improvement reflected
higher volumes which were partly offset by adverse mix and investment in the
division's commercial teams.
Oil & Gas' focus on Target Segments during the period delivered notable
successes in electrification, Asia infrastructure, decarbonisation and Rotork
Service. One notable win in upstream electrification was supplying actuators
to a Netherlands-based customer for its latest oil and gas platform, which is
not only electrified but for safety reasons is designed to be 'not normally
manned', requiring only two 14-day maintenance visits per year. In midstream,
the division received follow-on orders from a major liquefaction project in
Texas and several pipeline electrification projects including in Asia Pacific
and North America. In the downstream, there was significant activity in both
hydrocarbon storage and refining. The division supplied IQ3 actuators to a
major tank farm expansion in South Korea which will enable increased LNG
storage. LNG is widely seen as a bridge fuel in the energy transition for its
lower carbon emissions compared to oil and coal, its flexibility and its
abundance. Successes in refining included major automation/modernisation
projects in EMEA, the Americas and Asia Pacific.
Chemical, Process & Industrial
£m 2024 2023 Change OCC(3) change
Revenue 205.0 213.7 -4.1% -1.1%
Adjusted operating profit 53.0 51.3 +3.4% +7.4%
Adjusted operating margin 25.8% 24.0% +180bps +210bps
CPI is a supplier of specialist actuators and instruments for niche critical
applications in the broad chemical, process industry and industrial sectors.
The division serves a wide range of end markets including specialty and other
chemicals, metals and mining, critical HVAC, pharmaceutical, steel and cement.
The automation, electrification, digitalisation and decarbonisation megatrends
are important growth drivers. Rotork has historically been under-represented
in several of these markets and has the opportunity to win market share in the
years ahead.
The division delivered an encouraging second half performance, despite
economic weakness in a number of regions including most notably China. The
division's performance clearly benefitted from the pursuit of its chosen
Growth+ Target Segments such as the focus on specialty chemicals and critical
HVAC (including sales into data centres), as well as strength in core segments
including marine.
Divisional revenues were 4.1% lower year-on-year at £205.0m and 1.1% lower
year-on-year on an OCC basis, with the decline largely the result of reduced
mining sector large project activity, following three years of strong sales
growth. By destination, EMEA sales grew mid to high single digits (OCC), with
all subregions higher. Asia Pacific sales were lower, despite good growth in
India. China sales declined low single digit in the full year (OCC) but were
unchanged year-on-year in the second half. Americas sales grew low single
digits (OCC).
The division's adjusted operating profit was £53.0m, 3.4% higher than prior
year. Adjusted operating margin rose 180 basis points to 25.8%. The increase
in adjusted operating margin largely reflected positive mix as well as
disciplined cost management.
Rotork's electric and fluid power actuators and instruments were selected by
innovative customers for use in their energy transition projects. Rotork
supplied several hundred flow control actuators to a major greenfield urea
plant being built in Western Australia. The plant has been designed to
minimise emissions and with the capacity to achieve net-zero carbon by 2050.
Demand for urea is forecast to grow rapidly (source: the International
Renewable Energy Agency) driven by applications including agriculture and
transportation. Rotork's actuators were chosen by an innovative steel plant in
Sweden which has switched to fossil-free hydrogen to heat steel at its rolling
mill, produced on-site by a 20MW electrolyser. In the critical HVAC market,
data centres are increasingly requiring higher levels of automation,
reliability and precision in their cooling, power and fire protection systems.
Rotork products including actuators, gearboxes, chainwheels and limit switch
boxes are regularly selected for these projects.
Water & Power
£m 2024 2023 Change OCC(3) change
Revenue 193.9 177.0 +9.5% +13.1%
Adjusted operating profit 56.4 46.4 +21.3% +25.8%
Adjusted operating margin 29.1% 26.2% +290bps +300bps
Water & Power is a supplier of premium actuators, predominantly electric,
and gearboxes for applications in the water, wastewater and treatment and
power generation sectors. Rotork has significant growth opportunities
including through helping to solve customers' water quality and water scarcity
challenges, as well as the automation, electrification and digitalisation
trends. Water and wastewater contributed 68% of divisional sales in the year.
Divisional sales were ahead 9.5% year-on-year and 13.1% ahead year-on-year
(OCC), with water sector sales growing slightly faster than those of the power
sector. Asia Pacific sales were ahead low double digits year-on-year (OCC),
with India's 'Water for All' initiative continuing to drive very strong
revenue growth in water in that country, and with the power sector strong
across the Asia Pacific region. Americas sales grew robustly year-on-year with
all subregions strong and the region was Water & Power's fastest growing
geography in the period. EMEA sales grew low double digits (OCC) despite lower
power sector activity.
The division's adjusted operating profit was £56.4m, 21.3% higher
year-on-year. Deliveries benefitted from an improved supply chain performance,
particularly in the first half, resulting in adjusted operating margin
increasing 290 basis points to 29.1%.
In the water sector, Rotork is focused on helping to ensure access to water
and sanitation to all. Growth of the water sector is driven by the tailwinds
of network automation, ageing infrastructure, urbanisation and climate change
as well as water scarcity, quality and affordability challenges. Growth of the
global power market is driven by electrification, economic growth, artificial
intelligence and, in the US, the repatriation of manufacturing. The division
made good progress in its Target Segments of water infrastructure (including
irrigation), water and wastewater treatment, desalination and alternative
energy during the year.
Rotork supplies electric and fluid power actuators to many wastewater
treatment plants around the world, enabling these to provide better quality
water more efficiently. Water & Power received additional orders in 2024
for electric actuators to be used in a highly energy-efficient water
reclamation plant in Singapore. In alternative energy, offshore wind farms
generate renewable A/C electricity, which is typically converted to
high-voltage D/C electricity (HVDC) to minimise transmission losses. This
conversion occurs on offshore platforms, which can be as large as multiple
football fields and require critical-duty cooling systems. In 2024, Rotork
secured orders from customers for various electric actuators, including those
from the IQ3, IQTF, BBU, and Schischek families, to be used on platforms in
the North Sea. Rotork is supplying electric actuators to a number of
desalination projects around the world which will provide potable water, and
won new orders from customers in the Middle East in the year. Actuators play a
critical role in desalination plants, managing the flows of seawater and
potable water throughout the production process. Precision control is crucial
for maintaining pressures and optimising the plant's energy efficiency.
By order of the Board
Kiet Huynh
Chief Executive
10 March 2025
Financial review
The Group delivered a strong financial result for the year as order intake,
revenue, adjusted operating profit and adjusted operating margin all improved.
Order intake for the year was £744.3m (2023: £723.7m), up 2.8% from the
prior year or 6.1% on an organic constant currency (OCC) basis, with all
divisions delivering OCC growth.-
Group revenue increased 8.2% on an OCC basis to £754.4m (2023: £719.1m). On
a reported basis, revenues increased 4.9%, impacted by a foreign exchange
translation headwind of £24.1m. Double digit OCC revenue growth in W&P of
13.1% (9.5% reported) and O&G of 11.7% (8.3% reported) was partially
offset by a reduction in CPI of ‑1.1% (-4.1% reported) which was largely
due to reduced mining project activity compared to the previous year.
Rotork Service, our global service network and a key differentiator in our
industry, performed strongly in the year growing ahead of Group revenues.
Rotork Service is managed as a separate unit by each of Rotork's divisions and
contributed 23% (2023: 21%) of Group revenue.
Adjusted operating profit increased £13.9m, or 8.5%, to £178.4m, with
adjusted operating margin increasing 70bps to 23.6% (2023: 22.9%). On an OCC
basis, adjusted operating profit increased 100bps. However adverse foreign
exchange movements of £7.1m equated to a 30bps headwind. Reported operating
profit for the year of £135.9m was £12.9m unfavourable to the prior year,
with the increase in adjusted operating profit offset by the recognition of
one-time non-cash IAS 19 settlement of £18.0m related to the UK defined
benefit pension scheme.
Net finance income was £4.6m (2023: income of £1.9m) with the increase
driven by transactional foreign exchange gains on the Group's hedging of
foreign exchange risk.
Adjusted profit before tax was £183.0m (2023: £166.3m), driven by the
increase in adjusted operating profit. The reported profit before tax was
£140.5m (2023: £150.6m). The reconciling items between adjusted profit
before tax and reported profit before tax are shown in the table below.
Adjusted basic earnings per share was 15.9p (2023: 14.6p), an increase of
8.7%. Reported basic earnings per share was 12.1p (2023: 13.2p), a decrease of
8.1%.
Adjusted earnings reconciliation
Defined benefit scheme settlement loss Business
Statutory transformation Other Adjusted
£m results Amortisation costs costs results
Operating profit 135.9 2.6 18.0 17.2 4.7 178.4
Profit before tax 140.5 2.6 18.0 17.2 4.7 183.0
Tax (35.7) (0.5) (4.5) (4.4) (1.1) (46.2)
Profit after tax 104.8 2.1 13.5 12.8 3.6 136.8
The table above shows the adjustments between the statutory results for the
significant non-cash and other adjusting items and the adjusted results. Note
2 of the financial statements sets out the alternative performance measures
used by the Group and how these reconcile to the statutory results. Further
details of the adjusting items are provided in note 4.
Adjusted items
Adjusted profit measures are presented alongside statutory results as we
believe they provide a useful comparison of underlying business trends and
performance from one period to the next. The Group believes alternative
performance measures, which are not considered to be a substitute for, or
superior to, International Financial Reporting Standards (IFRS) measures,
provide stakeholders with additional helpful information on the performance of
the business.
The alternative profit measures are adjusted to exclude amortisation of
acquired intangibles, costs related to business transformation from
implementing a new ERP system and integrating business processes, as well as
other significant adjustments. These adjustments are made to provide
stakeholders with additional information to assess the Group's trading
performance on a consistent basis. Further details of the adjusted items are
provided in note 4.
Currency
The major currencies affecting the income statement are the US dollar and the
euro, both of which weakened against sterling in 2024. The US dollar/sterling
average rate of $1.28 (2023: $1.24) and the euro/sterling average rate of
€1.18 (2023: €1.15) both provided a headwind. The impact of these
movements alongside the basket of other currencies was a £24.1m or 3.4%
headwind to revenue and a £7.1m or 4.3% headwind to adjusted operating
profit.
The impact of currency on the Group is both translational and transactional.
Given the locations in which we operate and the international nature of our
supply chain and sales currencies, the impact of transaction settlement
differences can be very different from the translation impact. We can
partially mitigate the transaction impact through matching supply currency
with sales currency, but ultimately, we are net sellers of both US dollars and
euros. It is the net sale of these currencies which we principally address
through our hedging policy, covering up to 75% of net trading transactions in
the next 12 months and up to 50% between 12 and 24 months.
To estimate the impact of currency at the current exchange rates we consider
the effect of a one cent movement versus sterling. A one euro cent movement
now results in approximately a £250,000 (2023: £150,000) adjustment to
profit and for US dollar, and dollar-related currencies, a one cent movement
equates to approximately a £650,000 (2023: £500,000) adjustment.
Return on capital employed (ROCE)
Our capital-efficient business model and strong profit margins mean Rotork
generates a high ROCE. Our definition of ROCE is based on adjusted operating
profit as a return on the average net assets excluding net cash and the
pension scheme asset/liability, net of the related deferred tax. The average
capital employed decreased 1.5% over the year to £478.4m (2023: £485.5m). As
we grew revenue and expanded our adjusted operating profit margins in the
year, ROCE increased 340bps to 37.3% (2023: 33.9%).
Taxation
The Group's effective tax rate increased from 24.7% to 25.4%. Removing the
impact of the adjusted items provides a better indication of the underlying
rate and, on this basis, the adjusted effective tax rate is 25.2% (2023:
24.5%). The Group expects its adjusted effective tax rate to remain higher
than the standard UK rate due to higher rates of tax in China, the US, Germany
and India.
The Group's approach to tax continues to be to operate on the basis of full
disclosure and co-operation with all tax authorities and, where possible, to
mitigate the burden of tax within the local legislation.
Cash generation
Cash generated from operations increased 7.5% to £212.7m (2023: £197.8m)
primarily driven by the increase in adjusted operating profit and a consistent
cash conversion ratio of 119% (2023: 120%).
Net cash generated from operating activities increased 19.1% to £148.8m
(2023: £124.9m), benefitting from the above and the non-repeat of the £20m
special contribution to the Rotork Pension and Life Assurance Scheme in 2023.
However net cash generated from operating activities was adversely impacted by
an increase in income taxes paid to £38.8m (2023: £32.8m) and an increase in
the cash flow impact of adjusting items to £21.2m (2023: £13.5m).
Capital expenditure in the year was £14.0m (2023: £7.3m), excluding £1.6m
in capitalised software (2023: £2.1m) and £4.3m in capitalised product
development costs (2023: £2.4m). Capital expenditure largely related to the
completion of our new facility in China which formally opened in November
2024. Our total Research and Development (R&D) cash spend was £13.4m
which represented 1.8% of revenue (2023: £13.9m and 1.9% respectively).
Net cash generated in the year was £6.4m (2023: £36.6m). In addition to the
movements noted above, this was impacted by an increase in share purchases to
£10.3m (2023: £2.4m) to support future vesting of employee share plans,
dividends paid to ordinary shareholders of £63.3m (2023: £58.8m) and the
completion of our £50m share buyback programme announced in 2024.
Balance sheet
The Group finished the year with a net cash position of £125.3m (2023:
£134.4m). This included lease liabilities of £24.6m (2023: £12.0m), the
increase in the year attributed to the long-term lease for our new facility in
Changshu, China.
Net working capital in the balance sheet decreased 220bps to 25.1% of revenue
(2023: 27.3%), providing a working capital cash inflow of £7.2m (2023:
£11.9m outflow) in the year. Inventory decreased slightly by £0.6m and trade
receivables days' sales outstanding(1) was 56 days (2023: 55 days).
During the year the Group increased its liquidity by entering into a £75m
Revolving Credit Facility (RCF) which matures in December 2027. As at 31
December 2024, £nil was drawn under the RCF.
Risk update
Geopolitical instability remains at an elevated level with potential knock-on
impacts to other risks such as supply chain disruption. As a global business
we continue to monitor the trade position between all locations where we are
based or have customers or suppliers and have considered the potential impact
of additional trade barriers between these countries. Where necessary, we will
take steps to mitigate any such changes but continue to believe they will not
materially impact the Group's results. We have included scenarios in the
viability assessment which model the impact of these current uncertainties.
The viability statement will be published in our 2024 Annual Report and
Accounts.
Supply chain disruption risk reduced through 2024 as component shortages and
constraints reduced in comparison to prior years. Despite this reduction,
supply chain disruption continues to be a key risk for Rotork and management
actions continue to mitigate potentially more severe outcomes. The risk
'decline in market confidence' was consolidated with the existing
'competition' risk, as both risks deal with competitive forces. As a result,
the competition risk has increased. Business change risk has reduced due to
the increase in mitigating actions to deliver our various Growth+ programmes.
Emerging risks and opportunities, which are those risks and opportunities that
may be ambiguous, uncertain, and difficult to assess, continue to be monitored
and reviewed. Risks and opportunities under review include those in relation
to geopolitical events, technological, social, environmental, climate and
sustainability risks.
Credit management
The Group's credit risk is primarily attributable to trade receivables, with
the risk spread over a large number of countries and customers, and no
significant concentration of risk. Creditworthiness checks are undertaken
before entering into contracts or commencing trade with new customers, and in
companies where insurance cover operates, the authorisation process works in
conjunction with the insurer, taking advantage of their market intelligence.
We maintained coverage of the credit insurance policy during the year and have
cover in place for virtually all of our companies at an aggregate of 80% of
receivables. Where appropriate, we use trade finance instruments such as
letters of credit to mitigate any identified risk.
Treasury
The Group operates a centralised treasury function managed by a Treasury
Committee, chaired by me and also comprising the Group Financial Controller
and Group Treasurer. The Committee meets regularly to consider foreign
currency exposure, control over deposits, funding requirements and cash
management. The Group Treasurer monitors compliance with the treasury policies
and is responsible for overseeing all the Group's banking relationships. A
Subsidiary Treasury Policy restricts the actions subsidiaries can take, and
the Group Treasury Policy and Terms of Reference define the responsibilities
of the Group Treasurer and Treasury Committee.
Where appropriate, the Group uses financial instruments to hedge significant
currency transactions, principally forward exchange contracts and swaps. These
financial instruments are used to reduce volatility which might affect the
Group's cash or income statement. In assessing the level of cash flows to
hedge with forward exchange contracts, the maximum cover taken is 75% of net
forecast flows. The Board receives treasury reports which summarise the
Group's foreign currency hedging position, distribution of cash balances and
any significant changes to banking relationships.
Retirement benefits
The Group accounts for post-retirement benefits in accordance with IAS 19,
Employee Benefits. The balance sheet reflects the net liabilities of these
schemes at 31 December 2024 based on the market value of the assets at that
date, and the valuation of liabilities using year-end AA corporate bond
yields. We closed both the main defined benefit pension schemes to new
entrants - the UK scheme in 2003 and the US scheme in 2009 - to reduce the
risk of volatility of the Group's liabilities. In 2018 we further reduced the
risk of volatility when we completed the closure to future accrual of both the
UK and US schemes. Members of the defined benefit schemes were transferred
onto the relevant defined contribution plan operating in their country.
In 2023, the Group made a special contribution of £20m to the Rotork Pension
and Life Assurance Scheme (UK Scheme). This contribution, together with some
of the existing assets, was used to purchase a bulk annuity covering the UK
scheme's existing pensioner liabilities. This was accounted for as a buy-in.
During the year the UK Scheme completed a further bulk annuity with the full
premium amounting to £70m, largely to cover deferred pensioners. This second
bulk annuity has been accounted for as a settlement under IAS 19. Further
details on the risk transfer and associated settlement loss are provided in
note 4.
The IAS 19 funding position of the UK and US schemes reduced from a net
surplus of £9.1m in 2023 to a net deficit of £3.6m in 2024. The schemes'
assets reduced in value by £28.9m (2023: increase of £19.0m) and the
schemes' liabilities decreased by £16.1m (2023: increase of £1.8m). The
Group paid total contributions of £4.1m over the year (2023: £26.5m).
Dividends
The Board is proposing a final dividend of 5.00p per share. When taken
together with the 2.75p interim dividend paid in September 2024, the full year
dividend of 7.75p (2023: 7.20p per share) represents a 7.6% increase in
dividends over the prior year.
Ben Peacock
Chief Financial Officer
10 March 2025
1 Days' sales outstanding is calculated on a countback method. The
sales value including local sales taxes is deducted from the year-end trade
receivables to calculate the number of days sales outstanding.
Consolidated income statement
For the year ended 31 December 2024
Notes 2024 2023
£000 £000
Revenue 3 754,428 719,150
Cost of sales (382,494) (380,054)
Gross profit 371,934 339,096
Other income 1,733 1,405
Distribution costs (6,669) (6,314)
Administrative expenses (230,896) (184,630)
Other expenses (243) (790)
Operating profit 3 135,859 148,767
Finance income 5 7,323 5,301
Finance expense 5 (2,721) (3,430)
Profit before tax 140,461 150,638
Income tax expense 6 (35,663) (37,150)
Profit for the year 104,798 113,488
Attributable to:
Owners of the parent 103,585 113,135
Non-controlling interests 1,213 353
104,798 113,488
Basic earnings per share 8 12.1p 13.2p
Diluted earnings per share 8 12.1p 13.2p
Operating profit 3 135,859 148,767
Adjustments to profit:
- Amortisation of acquired intangible assets 4 2,604 2,110
- Defined benefit scheme settlement loss 4 18,009 -
- Other adjustments 4 21,934 13,598
Adjusted operating profit 2,3 178,406 164,475
Adjusted basic earnings per share 2,8 15.9p 14.6p
Adjusted diluted earnings per share 2,8 15.8p 14.6p
Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024 2023
£000 £000
Profit for the year 104,798 113,488
Other comprehensive income
Items that may be subsequently reclassified to the income statement:
Foreign exchange translation differences (12,915) (20,271)
Effective portion of changes in fair value of cash flow hedges net of tax (57) 1,397
(12,972) (18,874)
Items that may not be subsequently reclassified to the income statement:
Remeasurement gain/(loss) in pension scheme net of tax 563 (7,722)
Expenses and income recognised in other comprehensive income (12,409) (26,596)
Total comprehensive income for the year 92,389 86,892
Attributable to:
Owners of the parent 91,102 86,609
Non-controlling interests 1,287 283
92,389 86,892
Consolidated balance sheet
At 31 December 2024
Notes 2024 2023
£000 £000
Non-current assets
Goodwill 224,793 231,703
Intangible assets 31,429 31,126
Property, plant and equipment 90,302 74,411
Derivative financial instruments 120 206
Defined benefit scheme surplus - 9,144
Deferred tax assets 22,084 15,454
Total non-current assets 368,728 362,044
Current assets
Inventories 83,364 83,963
Trade receivables 149,479 152,842
Current tax 4,164 4,187
Derivative financial instruments 929 673
Other receivables 23,839 23,701
Cash and cash equivalents 149,983 146,372
Total current assets 411,758 411,738
Total assets 780,486 773,782
Current liabilities
Interest-bearing loans and borrowings 4,329 3,131
Trade payables 43,838 40,585
Employee benefits 9 29,146 29,754
Current tax 15,982 12,387
Derivative financial instruments 362 538
Other payables 49,989 42,536
Provisions 4,757 4,275
Total current liabilities 148,403 133,206
Non-current liabilities
Interest-bearing loans and borrowings 20,320 8,826
Employee benefits 9 7,699 4,197
Deferred tax liabilities 4,037 3,872
Derivative financial instruments 84 15
Provisions 1,441 1,371
Total non-current liabilities 33,581 18,281
Total liabilities 181,984 151,487
Net assets 598,502 622,295
Equity
Issued equity capital 7 4,232 4,306
Share premium 21,842 21,004
Other reserves 495 13,465
Retained earnings 569,211 581,813
Equity attributable to the parent 595,780 620,588
Non-controlling interests 2,722 1,707
Total equity 598,502 622,295
These financial statements were approved by the Board of Directors and
authorised for issue on 10 March 2025 and were signed on its behalf by:
K Huynh and B Peacock
Directors
Consolidated statement of changes in equity
For the year ended 31 December 2024
Issued Share Translation Capital Hedging Retained Total attributable to owners of the parent Total
equity premium reserve redemption reserve earnings £000 Non-controlling interests £000
capital £000 £000 reserve £000 £000 £000
£000 £000
Balance at 31 December 2022 4,304 19,959 31,352 1,716 (799) 531,951 588,483 1,424 589,907
Profit for the year - - - - - 113,135 113,135 353 113,488
Other comprehensive income
Foreign exchange translation differences - - (20,201) - - - (20,201) (70) (20,271)
Effective portion of changes in fair value of cash - - - - 1,841 - 1,841 - 1,841
flow hedges
Actuarial loss on defined benefit pension plans - - - - - (9,875) (9,875) - (9,875)
Tax on other comprehensive (loss)/income - - - - (444) 2,153 1,709 - 1,709
Total other comprehensive (loss)/income - - (20,201) - 1,397 (7,722) (26,526) (70) (26,596)
Total comprehensive (loss)/income - - (20,201) - 1,397 105,413 86,609 283 86,892
Transactions with owners, recorded directly in equity
Equity settled share-based payment transactions - - - - - 2,282 2,282 - 2,282
Tax on equity settled share-based payment transactions - - - - - 43 43 - 43
Share options exercised by employees 2 1,045 - - - - 1,047 - 1,047
Own ordinary shares acquired - - - - - (2,444) (2,444) - (2,444)
Own ordinary shares awarded under share schemes - - - - - 3,388 3,388 - 3,388
Dividends paid on ordinary shares - - - - - (58,820) (58,820) - (58,820)
Balance at 31 December 2023 4,306 21,004 11,151 1,716 598 581,813 620,588 1,707 622,295
Profit for the year - - - - - 103,585 103,585 1,213 104,798
Other comprehensive income
Foreign exchange translation differences - - (12,989) - - - (12,989) 74 (12,915)
Effective portion of changes in fair value of cash - - - - (76) - (76) - (76)
flow hedges
Actuarial gain on defined benefit pension plans - - - - - 922 922 - 922
Tax on other comprehensive income/(loss) - - - - 19 (359) (340) - (340)
Total other comprehensive (loss)/income - - (12,989) - (57) 563 (12,483) 74 (12,409)
Total comprehensive (loss)/income - - (12,989) - (57) 104,148 91,102 1,287 92,389
Transactions with owners, recorded directly in equity
Equity settled share-based payment transactions - - - - - 4,046 4,046 - 4,046
Tax on equity settled share-based payment transactions - - - - - 9 9 - 9
Share options exercised by employees 2 838 - - - - 840 - 840
Own ordinary shares acquired - - - - - (10,348) (10,348) - (10,348)
Own ordinary shares awarded under share schemes - - - - - 3,134 3,134 - 3,134
Share buyback programme (76) - - 76 - (50,326) (50,326) - (50,326)
Dividends paid on ordinary shares - - - - - (63,265) (63,265) - (63,265)
Dividends paid to non-controlling interests - - - - - - - (272) (272)
Balance at 31 December 2024 4,232 21,842 (1,838) 1,792 541 569,211 595,780 2,722 598,502
Detailed explanations for equity capital, the translation reserve, capital
redemption reserve and hedging reserve can be seen in note 7.
Consolidated statement of cash flows
For the year ended 31 December 2024
Notes 2024 2023
2024 £000 2023 £000
£000 £000
Cash flows from operating activities
Cash generated from operations 10 212,738 197,843
Operating cash flow impact of other adjustments 4 (21,200) (13,496)
Difference between pension charge and cash contribution (4,007) (26,628)
Income taxes paid (38,757) (32,825)
Net cash flows from operating activities 148,774 124,894
Cash flows from investing activities
Purchase of property, plant and equipment (13,983) (7,306)
Purchase of intangible assets (1,635) (2,089)
Product development costs capitalised (4,327) (2,411)
Sale of property, plant and equipment 224 1,883
Acquisition of business (net of cash acquired) - (18,399)
Settlement of hedging derivatives 2,677 937
Interest received 4,097 3,927
Net cash flows from investing activities (12,947) (23,458)
Cash flows from financing activities
Issue of ordinary share capital 840 1,047
Own ordinary shares acquired (10,348) (2,444)
Interest paid (1,884) (936)
Repayment of lease liabilities (4,217) (3,699)
Share buyback programme (50,326) -
Dividends paid on ordinary shares (63,265) (58,820)
Dividends paid to non-controlling interests (272) -
Net cash flows from financing activities (129,472) (64,852)
Net increase in cash and cash equivalents 6,355 36,584
Cash and cash equivalents at 1 January 146,372 114,770
Effect of exchange rate fluctuations on cash held (2,744) (4,982)
Cash and cash equivalents at 31 December 149,983 146,372
Notes to the Group financial statements
For the year ended 31 December 2024
Except where indicated, values in these notes are in £000.
Rotork plc (the Company) is a public company limited by shares, registered and
domiciled in England and Wales, its ordinary shares have a commercial
companies (equity shares) category listing on the London Stock Exchange. The
consolidated financial statements of the Company for the year ended 31
December 2024 comprise the Company and its subsidiaries (together referred to
as the Group).
1. Accounting policies
The accounting policies applied in the preparation of these consolidated
financial statements are set out below. These policies have been consistently
applied to the years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of Rotork plc have been prepared in
accordance with UK‑adopted International Accounting Standards.
New accounting standards and interpretations
A number of amended standards became applicable for the current reporting
period. The application of these amendments has not had any material impact on
the disclosures, net assets or results of the Group.
New standards and interpretations not yet adopted
Further narrow scope amendments have been issued which are mandatory for
periods commencing on or after 1 January 2025. The application of these
amendments will not have any material impact on the disclosures, net assets or
results of the Group.
Adjustments to profit
Adjustments to profit are items of income and expense which, because of the
nature, size and/or infrequency of the events giving rise to them, merit
separate presentation. These specific items are presented as a footnote to the
income statement to provide greater clarity and an enhanced understanding of
the impact of these items on the Group's financial performance. In doing so,
it also facilitates greater comparison of the Group's results with prior
periods and assessment of trends in financial performance. This split is
consistent with how business performance is measured internally.
Adjustments to profit items may include but are not restricted to: costs of
significant business restructuring and any associated impairments of
intangible or tangible assets, adjustments to the fair value of
acquisition-related items such as contingent consideration, acquired
intangible asset amortisation and other items considered to be significant due
to their nature or the expected infrequency of the events giving rise to them.
Going concern
The directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than 12
months from the date of this report. Accordingly, we continue to adopt the
going concern basis in preparing the financial statements.
In forming this view, the macroeconomic conditions and the impact of
geopolitical instability on the Group have been considered. The directors have
reviewed: the current financial position of the Group, which has net cash of
£125m, an undrawn committed revolving credit facility of £75m and unused
overdraft facilities of £33m as at the period end; the significant order
book, which contains customers spread across different geographic areas and
industries; and the trading and cash flow forecasts for the Group. A reverse
stress test, where the Group's business model would become unviable, has been
performed and the directors believe there is no reasonably possible scenario
that would lead to the conditions modelled in the reverse stress test.
The directors are satisfied that the Group has adequate resources to continue
operating as a going concern for a period of not less than 12 months from the
date of this report, and that no material uncertainties exist with respect to
this assessment. The Group also has a number of mitigating actions that it can
take at short notice to preserve cash, for example reduction in capital
programmes, dividend deferral and other reductions in discretionary spend.
Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries for the year to 31 December 2024. The
financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date
control ceases. Intra-group balances and any unrealised gains or losses or
income and expenses arising from intra-group transactions are eliminated in
preparing the consolidated financial statements.
Status of this preliminary announcement
The financial information contained in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31 December
2024 or 2023. Statutory accounts for 2023, which have been prepared in
accordance with UK-adopted International Accounting Standards and in
conformity with the requirements of the Companies Act 2006 have been delivered
to the registrar of companies. Those for 2024, will be delivered in due
course. The auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006. Full financial statements for the year ended 31 December
2024 will shortly be available to shareholders, and after adoption at the
Annual General Meeting on 2 May 2025 will be delivered to the registrar.
2. Alternative performance measures
The Group uses adjusted figures as key performance measures in addition to
those reported under adopted IFRS, as management believe these measures
provide stakeholders with additional useful information to facilitate greater
comparison of the Group's underlying results with prior periods and assessment
of trends in financial performance.
The Group believes alternative performance measures, which are not considered
to be a substitute for, or superior to, IFRS measures, provide stakeholders
with additional helpful information on the performance of the business. These
alternative performance measures are consistent with how the business
performance is planned and reported within the internal management reporting
to the Board. Some of these measures are also used for the purpose of setting
remuneration targets.
The key alternative performance measures that the Group use include adjusted
profit measures and organic constant currency (OCC).
Explanations of how they are calculated and reconciled to IFRS statutory
results are set out below.
a. Adjusted operating profit
Adjusted operating profit is the Group's operating profit excluding the
amortisation of acquired intangible assets and other adjusting items as
defined in note 1. Further details on these adjustments are given in note 4.
b. Adjusted profit before tax
The adjustments in calculating adjusted profit before tax are consistent with
those in calculating adjusted operating profit above.
2024 2023
Profit before tax 140,461 150,638
Adjustments:
Amortisation of acquired intangible assets 2,604 2,110
Defined benefit scheme settlement loss 18,009 -
Gain on disposal of property - (723)
Business Transformation costs 17,214 13,097
Other costs 4,720 1,224
Adjusted profit before tax 183,008 166,346
c. Adjusted basic and diluted earnings per share
Adjusted basic earnings per share is calculated using the adjusted net profit
attributable to the ordinary shareholders and dividing it by the weighted
average ordinary shares in issue (see note 8). Adjusted net profit
attributable to ordinary shareholders is calculated as follows:
2024 2023
Net profit attributable to ordinary shareholders 103,585 113,488
Adjustments:
Amortisation of acquired intangible assets 2,604 2,110
Defined benefit scheme settlement loss 18,009 -
Gain on disposal of property - (723)
Business Transformation costs 17,214 13,097
Other costs 4,720 1,224
Tax effect on adjusted items (10,526) (3,567)
Adjusted net profit attributable to ordinary shareholders 135,606 125,629
Adjusted diluted earnings per share is calculated by using the adjusted net
profit attributable to ordinary shareholders and dividing it by the weighted
average ordinary shares in issue adjusted to assume conversion of all
potentially dilutive ordinary shares (see note 8).
d. Adjusted dividend cover
Dividend cover is calculated as earnings per share divided by dividends per
share. Adjusted dividend cover is calculated as adjusted earnings per share as
defined in note 2c above divided by dividends per share.
e. Total shareholder return
Total shareholder return is the movement in the price of an ordinary share
plus dividends during the year, divided by the opening share price.
f. Return on capital employed
The return on capital employed ratio is used by management to help ensure that
capital is used efficiently.
2024 2023
Adjusted operating profit 178,406 164,475
Capital employed
Net assets 598,502 622,295
Cash and cash equivalents (149,983) (146,372)
Interest-bearing loans and borrowings 24,649 11,957
Pension deficit/(surplus) net of deferred tax 2,686 (6,904)
Capital employed 475,854 480,976
Average capital employed 478,415 485,507
Return on capital employed 37.3% 33.9%
Average capital employed is defined as the average of the capital employed at
the start and end of the relevant year.
g. Working capital as a percentage of revenue
Working capital as a percentage of revenue is monitored as control of working
capital is key to achieving our cash generation targets. It is calculated as
inventory plus trade receivables, less trade payables, divided by revenue.
h. Organic constant currency (OCC)
OCC results adjust for currency movements and for acquisitions and disposals.
Key headings in the income statement are reconciled to OCC as follows:
2023 Foreign exchange Organic constant currency
Acquisitions 2024
Revenue 719,150 (24,110) 2,209 57,179 754,428
Cost of sales (380,054) 13,463 (895) (15,008) (382,494)
Gross profit 339,096 (10,647) 1,314 42,171 371,934
Overheads (174,621) 3,526 (383) (22,050) (193,528)
Adjusted operating profit 164,475 (7,121) 931 20,121 178,406
During the year the calculation of OCC performance was changed from
translating reporting period results at the prior period average exchange
rates to translating the prior period results at the reporting period's
average exchange rates. This change enables greater comparability of results
over multiple previous periods. Adjustments for acquisitions and/or disposals
are unchanged - acquired businesses are not included until owned for more than
one year and are then included on an equal perimeter basis, disposed
businesses are excluded entirely.
Applying the previous calculation methodology to the 2024 results does not
result in a material difference in the OCC performance for the year.
i. Cash conversion
Cash conversion is calculated as cash generated from operations (titled
adjusted operating cash flow in prior year) as a percentage of adjusted
operating profit. It is monitored to illustrate how efficiently adjusted
operating profits are converted into cash. Cash generated from operations is
calculated in note 10.
2024 2023
Cash generated from operations (note 10) 212,738 197,843
Adjusted operating profit (note 4) 178,406 164,475
Cash conversion 119% 120%
3. Operating segments
The three identifiable operating segments where the financial and operating
performance is reviewed monthly by the chief operating decision maker are as
follows:
Oil & Gas
Chemical, Process & Industrial
Water & Power
The Group's customers are allocated to a segment. Sales to that customer,
along with all directly associated costs of that sale, are reported under the
segment to which that customer is allocated. Where customers sell into
multiple segments, a lead segment is identified. Sales to these customers will
generally be allocated to the lead segment unless the sale is of significance
and an alternative segment has been identified, in which case it will be
reported under the alternative segment.
Costs not directly attributed to a sale are allocated across the three
segments. There are some costs which are directly attributable to a segment,
but most support costs and facility costs are not directly attributable to a
segment and are generally allocated based on split of revenue.
Analysis by operating segment:
Oil & Gas Chemical, Process & Industrial Water & Power Corporate expenses Group
2024 2024 2024 2024 2024
Revenue from external customers 355,506 205,028 193,894 - 754,428
Segment result / Adjusted operating profit* 91,983 52,987 56,359 (22,923) 178,406
Adjusting items (42,547)
Operating profit 135,859
Net finance income 4,602
Income tax expense (35,663)
Profit for the year 104,798
Oil & Gas Chemical, Process & Industrial Water & Power Corporate expenses Group
2023 2023 2023 2023 2023
Revenue from external customers 328,391 213,712 177,047 - 719,150
Segment result / Adjusted operating profit* 83,627 51,253 46,445 (16,850) 164,475
Adjusting items (15,708)
Operating profit 148,767
Net finance income 1,871
Income tax expense (37,150)
Profit for the year 113,488
*Adjusted operating profit is operating profit before adjusting items (see
note 4).
Oil & Gas Chemical, Process & Industrial Water & Power Group
2024 2024 2024 2024
Depreciation 6,489 3,782 4,021 14,292
Amortisation of development costs 1,283 748 794 2,825
Oil & Gas Chemical, Process & Industrial Water & Power Group
2023 2023 2023 2023
Depreciation 6,180 4,022 3,331 13,533
Amortisation of development costs 774 504 417 1,695
Balance sheets are reviewed by subsidiary and operating segment balance sheets
are not prepared. Therefore no further analysis of operating segments assets
and liabilities is presented.
Geographical analysis:
Rotork has a worldwide presence in all three operating segments. A full list
of locations can be found at www.rotork.com.
Revenue by end destination 2024 2023
UK 54,594 48,124
Other EMEA 233,935 212,689
Total EMEA 288,529 260,813
China 112,478 111,284
India 49,242 40,925
Other APAC 93,555 105,290
Total APAC 255,275 257,499
USA 143,523 132,840
Other Americas 67,101 67,998
Total Americas 210,624 200,838
754,428 719,150
4. ADJUSTING ITEMS
Refer to note 1 for details on the adjustments to profit, including an
explanation of 'other adjustments'. The adjustments to profit included in
statutory profit are as follows:
2024 2023
Amortisation of acquired intangible assets (2,604) (2,110)
Defined benefit scheme settlement loss (18,009) -
Gain on disposal of property - 723
Business Transformation costs (17,214) (13,097)
Other costs (4,720) (1,224)
Other adjustments (21,934) (13,598)
Total adjusting items (42,547) (15,708)
Defined benefit scheme settlement loss
In August 2024 the UK defined benefit pension scheme transacted a second bulk
annuity, covering the benefits of the remaining UK Scheme's membership (mainly
deferred pensioners). Given all the UK Scheme's liabilities are now insured,
this second bulk annuity has been accounted for as a settlement under IAS 19
and therefore a loss of £18,009,000 has been recognised in the income
statement.
Business Transformation costs
During the year £17,214,000 (2023: £13,097,000) of costs were incurred on
Business Transformation. The multi-year transformation includes the
implementation and integration of common systems and processes throughout the
Group, including a new cloud-based ERP system. This brings the total expensed
under the programme to £62,134,000. These costs were expensed as they do not
meet the capitalisation criteria under IAS 38. Costs include an allocation of
personnel expenses in respect of employees directly involved in the programme.
Over the next three years we will deploy the Business Transformation
programme, including the new ERP system, across all other Group entities at an
estimated further cost of £60m to £65m.
Other costs
£4,720,000 (2023: £1,224,000) of other costs have been incurred, largely in
relation to relocation of the Shanghai (China) facility to Changshu (China).
Income statement disclosure
All adjustments are included in administrative expenses. The adjustments are
taxable or tax deductible in the country in which the expense is incurred.
Cash flow statement disclosure
Other adjustments have a net operating cash outflow of £21,200,000 (2023:
£13,496,000) and a net investing cash inflow of £nil (2023: £955,000).
5. finance Income and EXPENSE
2024 2023
Interest income 4,391 4,203
Net interest income on pension scheme liabilities 215 352
Foreign exchange gains 2,717 746
Finance income 7,323 5,301
2024 2023
Interest expense (1,480) (807)
Interest expense on lease liabilities (761) (495)
Foreign exchange losses (480) (2,128)
Finance expense (2,721) (3,430)
6. Income tax expense
2024 2024 2023 2023
Current tax
UK corporation tax on profits for the year 6,658 4,865
Adjustment in respect of prior years 486 435
7,144 5,300
Overseas tax on profits for the year 37,459 32,091
Adjustment in respect of prior years (1,940) 146
35,519 32,237
Total current tax 42,663 37,537
Deferred tax
Origination and reversal of other temporary differences (6,303) 1,187
Impact of rate change (71) (591)
Adjustment in respect of prior years (626) (983)
Total deferred tax (7,000) (387)
Total tax charge for year 35,663 37,150
Profit before tax 140,461 150,638
Profit before tax multiplied by the blended standard rate of 35,115 35,400
corporation tax in the UK of 25.0% (2023: 23.5%)
Effects of:
Different tax rates on overseas earnings (177) 2,131
Irrecoverable withholding tax on dividends 3,777 2,421
Permanent differences 695 (118)
Losses not recognised 126 166
Tax incentives (1,722) (1,587)
Impact of rate change (71) (861)
Adjustments to tax charge in respect of prior years (2,080) (402)
Total tax charge for year 35,663 37,150
Effective tax rate 25.4% 24.7%
Adjusted profit before tax (note 2b) 183,008 166,346
Total tax charge for the year 35,663 37,150
Amortisation of acquired intangible assets 549 286
Defined benefit scheme settlement loss 4,502 -
Business Transformation costs 4,357 3,220
Other adjustments (note 4) 1,118 61
Adjusted total tax charge for the year 46,189 40,717
Adjusted effective tax rate 25.2% 24.5%
A tax credit of £9,000 (2023: £43,000) in respect of share-based payments
has been recognised directly in equity in the year.
The effective tax rate for the year is 25.4% (2023: 24.7%). The adjusted
effective tax rate is 25.2% (2023: 24.5%) and is lower than the effective tax
rate for the year principally because of the tax treatment of expenses
included in adjusting items.
The adjusted effective tax rate has increased from 24.5% in 2023 to 25.2% in
2024, principally because of increases in tax rates in jurisdictions in which
Rotork operate, including the blended UK corporation tax rate which increased
from 23.5% in 2023 to 25.0% in 2024. The consequent increase in the adjusted
effective tax rate has been partially offset by the recovery of withholding
tax relating to prior year distributions, which is also the predominant driver
of the prior year adjustment to overseas tax above. The Group expects its
adjusted effective tax rate to continue to move in line with the trends in
corporate tax rates in the jurisdictions where Rotork operates. The adjusted
effective tax rate will continue to be higher than the standard UK rate due to
higher rates of tax in China, the US, Germany and India.
On 20 June 2023 legislation was substantively enacted in the UK to introduce
the OECD's Pillar Two global minimum tax rules together with a UK qualified
domestic minimum top-up tax, with effect from 1 January 2024. Under the
legislation Rotork plc will be required to pay to the UK tax authorities
top-up tax on profits of its subsidiaries that are taxed at an effective tax
rate of less than 15 per cent.
The Pillar Two tax charge borne by the Rotork plc does not have a material
impact on its current tax expense.
The Group will continue to assess the impact of the Pillar Two income taxes
legislation on its future financial performance.
There is an unrecognised deferred tax liability for temporary differences
associated with investments in subsidiaries. Rotork plc controls the dividend
policies of its subsidiaries and the timing of the reversal of the temporary
differences. The value of temporary differences associated with unremitted
earnings of subsidiaries for which deferred tax has not been recognised is
£357,208,000 (2023: £320,839,000).
7. Capital and reserves
0.5p Ordinary shares issued £1 Non- 0.5p Ordinary shares issued £1 Non-
and fully redeemable and fully redeemable
paid up preference paid up preference
2024 shares 2023 shares
2024 2023
At 1 January 4,306 40 4,304 40
Issued under employee share schemes 2 - 2 -
Cancelled following share buyback programme (76) - - -
At 31 December 4,232 40 4,306 40
Number of shares (000) 846,381 861,201
The ordinary shareholders are entitled to receive dividends as declared and
are entitled to vote at meetings of the Company.
Share issue
The Group received proceeds of £840,000 (2023: £1,047,000) in respect of the
321,000 (2023: 430,000) ordinary shares issued during the year: £2,000 (2023:
£2,000) was credited to share capital and £838,000 (2023: £1,045,000) to
share premium.
Own shares held
Within the retained earnings reserve are own shares held in Rotork's Employee
Benefit Trust. The Group acquired 3,129,000 of its own shares during the year
(2023: 773,000). The total amount paid to acquire the shares was £10,348,000
(2023: £2,444,000), and this has been deducted from shareholders' equity.
During the year, 973,000 (2023: 1,038,000) ordinary shares were released to
satisfy share plan awards. The investment in own shares held is £12,271,000
(2023: £5,056,000) and represents 3,722,000 (2023: 1,566,000) ordinary shares
of the Company held in trust for the benefit of directors and employees for
future payments under the Share Incentive Plan and Long Term Incentive Plan.
The dividends on these shares have been waived.
Preference shares
The preference shareholders take priority over the ordinary shareholders when
there is a distribution upon winding up the Company or on a reduction of
equity involving a return of capital. The holders of preference shares are
entitled to vote at a general meeting of the Company if a preference dividend
is in arrears for six months or the business of the meeting includes the
consideration of a resolution for winding up the Company or the alteration of
the preference shareholders' rights.
Translation reserve
The translation reserve comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations.
Capital redemption reserve
The capital redemption reserve arises when the Company redeems shares wholly
out of distributable profits.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net
change in the fair value of cash flow hedging instruments that are determined
to be an effective hedge.
Dividends
The following dividends were paid in the year per qualifying ordinary share:
Payment date 2024 2023
2024
4.65p final dividend for 2023 (final dividend for 2022: 4.30p) 24 May 39,881 36,926
2.75p interim dividend for 2024 (interim dividend for 2023: 2.55p) 23 September 23,384 21,894
63,265 58,820
After the balance sheet date the following dividends per qualifying ordinary
share were proposed by the directors. The dividends have not been provided
for.
2024 2023
Final proposed dividend per qualifying ordinary share
5.00p 42,133 -
4.65p - 40,046
8. Earnings per share
Basic earnings per share
Earnings per share is calculated for both the current and previous years using
the profit attributable to the ordinary shareholders for the year. The
earnings per share calculation is based on 853.6m shares (2023: 859.3m shares)
being the weighted average number of ordinary shares in issue (net of own
ordinary shares held) for the year.
2024 2023
Net profit attributable to ordinary shareholders 103,585 113,488
Weighted average number of ordinary shares
Issued ordinary shares net of own shares held at 1 January 859,636 858,940
Effect of own shares held 82 198
Effect of share buyback programme (6,174) -
Effect of shares issued under Sharesave plans 102 122
Weighted average number of ordinary shares during the year 853,646 859,260
Basic earnings per share 12.1p 13.2p
Adjusted basic earnings per share
Adjusted basic earnings per share is calculated for both the current and
previous years using the profit attributable to the ordinary shareholders for
the year after adding back the after-tax impact of the adjustments. The
reconciliation showing how adjusted net profit attributable to ordinary
shareholders is derived is shown in note 2.
2024 2023
Adjusted net profit attributable to ordinary shareholders 135,606 125,629
Weighted average number of ordinary shares during the year 853,646 859,260
Adjusted basic earnings per share 15.9p 14.6p
Diluted earnings per share
Diluted earnings per share is based on the profit for the year attributable to
the ordinary shareholders and 857.0m shares (2023: 862.4m shares). The number
of shares is equal to the weighted average number of ordinary shares in issue
(net of own ordinary shares held) adjusted to assume conversion of all
potentially dilutive ordinary shares. The Company has two categories of
potentially dilutive ordinary shares: those share options granted to employees
under the Sharesave plan where the exercise price is less than the average
market price of the Company's ordinary shares during the year and contingently
issuable shares awarded under the Long Term Incentive Plan (LTIP).
2024 2023
Net profit attributable to ordinary shareholders 103,585 113,488
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares for the year 853,646 859,260
Effect of Sharesave options 798 730
Effect of LTIP share awards 2,549 2,398
Weighted average number of ordinary shares (diluted) during the year 856,993 862,388
Diluted earnings per share 12.1p 13.2p
Adjusted diluted earnings per share
2024 2023
Adjusted net profit attributable to ordinary shareholders 135,606 125,629
Weighted average number of ordinary shares (diluted) during the year 856,993 862,388
Adjusted diluted earnings per share 15.8p 14.6p
9. Employee benefits
2024 2023
Recognised liability for defined benefit obligations 3,618 -
Other pension scheme liabilities 153 673
Employee bonuses 24,773 25,497
Employee indemnity provision 1,884 2,016
Other employee benefits 6,417 5,765
36,845 33,951
Non-current 7,699 4,197
Current 29,146 29,754
36,845 33,951
10. CASH GENERATED FROM OPERATIONS
Note 2024 2023
£000 £000
Profit for the year 104,798 113,488
Income tax expense 6 35,663 37,150
Finance income 5 (7,323) (5,301)
Finance expense 5 2,721 3,430
Operating profit 135,859 148,767
Amortisation of acquired intangible assets 2,604 2,110
Defined benefit scheme settlement loss 4 18,009 -
Other adjustments 4 21,934 13,598
Depreciation 14,292 13,533
Amortisation and impairment of development costs 3,614 2,352
Equity settled share-based payments 6,664 5,670
Profit on sale of property, plant and equipment (109) (342)
Increase in provisions 922 216
Cash generated from operations before working capital cash flows 203,789 185,904
(Increase)/decrease in inventories (1,437) 5,490
Increase in trade and other receivables (1,064) (10,488)
Increase in trade and other payables 12,017 1,399
(Decrease)/increase in employee benefits (567) 15,538
Cash generated from operations 212,738 197,843
11. Related parties
The Group has a related party relationship with its subsidiaries and with its
directors and key management. Transactions between two subsidiaries for the
sale and purchase of products or the subsidiary and parent Company for
management charges are priced on an arm's length basis.
12. Post balance sheet events
On 10 March 2025 Rotork agreed to acquire 100% of the equity interest in Noah
Actuation Co. Ltd. a company headquartered in Seoul, South Korea for an
enterprise value of £44m. The acquisition will expand Rotork's electric
actuator offering and is fully aligned to the Growth+ strategy. Completion is
expected in the coming days and therefore the initial accounting for the
business combination has not yet been completed. Further information will be
provided in the condensed consolidated interim financial statements of the
Group for the period ended 30 June 2025.
Financial calendar
11 March 2025 Preliminary announcement of annual results for 2024
24 April 2025 Ex-dividend date for proposed final 2024 dividend
25 April 2025 Record date for proposed final 2024 dividend
2 May 2025 Announcement of trading update
2 May 2025 Annual General Meeting to be held at Bailbrook House Hotel, Eveleigh Avenue,
London Road West, Bath, Somerset, BA1 7JD
3 June 2025 Payment date for proposed final 2024 dividend (subject to shareholder approval
at the 2025 AGM)
5 August 2025 Announcement of interim financial results for 2025
19 November 2025 Announcement of trading update
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