REG - Rotork PLC - 2025 Interim results
05/08/2025 07:02
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250805:nRSE9238Ta&default-theme=true
RNS Number : 9238T Rotork PLC 05 August 2025
Tuesday 5 August 2025
Rotork plc
2025 Interim results
Growth+ drives order intake, full year expectations unchanged
Adjusted highlights H1 2025 H1 2024 % change OCC(2) % change
Order intake £391.1m £374.4m +4.5% +6.3%
Revenue £367.3m £361.4m +1.6% +3.3%
Adjusted(1) operating profit £80.8m £76.5m +5.7% +10.1%
Adjusted(1) operating margin 22.0% 21.2% +80bps +140bps
Adjusted(1) basic earnings per share 7.1p 6.9p +3.5% +7.7%
Cash conversion(3) 89% 106%
Reported highlights H1 2025 H1 2024 % change
Revenue £367.3m £361.4m +1.6%
Operating profit £64.7m £66.9m -3.1%
Operating margin 17.6% 18.5% -90bps
Profit before tax £65.1m £69.7m -6.6%
Basic earnings per share 5.7p 6.0p -5.8%
Interim dividend 2.95p 2.75p +7.3%
Summary
· Good H1 order intake despite a volatile macro backdrop, with 6.3% OCC
growth year-on-year (YoY). All divisions experienced good order growth in H1,
as a result of our Growth+ strategy
· Sales increased by 3.3% OCC YoY. The H1 book-to-bill(4) ratio was
1.06x (2024: 1.04x), with an expected second half phasing of deliveries
· Adjusted operating profit grew 10.1% OCC YoY, with the adjusted
operating margin at 22.0%, supported by Target Segment growth, mix and
operational efficiencies
· ROCE(3) of 37.0% (2024: 36.9%) remained at a high level, reflecting
strong margins and a disciplined approach to capital allocation. The
acquisition of Noah was completed and £22m was returned to shareholders via a
share buyback (£30m by the end of July)
· The Board has declared an interim dividend of 2.95 pence per share
(7.3% YoY growth) and we expect to complete the remaining portion of the
buyback by the end of the year
Kiet Huynh, Chief Executive, commenting on the results, said:
"We're pleased to see good first-half order growth across all divisions,
underpinned by our Growth+ strategy. There was a particularly strong order
performance in Water & Power driven by the Target Segment focus on markets
such as water infrastructure and treatment. Sales momentum accelerated during
the period and we are confident of further growth in the second half,
supported by order-book visibility and our project pipeline.
The Group continues to benefit from our strategic focus, business model and
the dedication of our people. Growth+ is driving results, with Target Segment
sales up 7% and Rotork Service growing ahead of the group, now contributing
23% of Group revenues. With a strong balance sheet, we're confident that we
will continue to grow shareholder returns and can pursue value-accretive
opportunities through bolt-on M&A and share buybacks.
Looking ahead, our full year expectations are unchanged and we continue to
anticipate 2025 to be another year of progress on an OCC basis."
(1) Adjusted(3) figures exclude the amortisation of acquired intangible assets
and other adjustments (see note 2).
(2) OCC(3) is organic constant currency results which exclude acquired
businesses and are restated at 2025 H1 average exchange rates.
(3) 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 reported measures in note 2.
(4) Book-to-bill ratio (BtB) is calculated as orders received in the period
divided by revenue in the period.
Rotork plc Tel: +44 (0)1225 733 200
Kiet Huynh, Chief Executive Officer
Ben Peacock, Chief Financial Officer
Alex Toms, 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 BST today with access via
https://www.investis-live.com/rotork/68557556d645df000ef79a14/vdes
(https://url.uk.m.mimecastprotect.com/s/8x6iCJPKVs1pMO4UVfWhyIRYZ?domain=investis-live.com)
. Please join the webcast a few minutes before 8.00am to complete
registration.
Summary
H1 results overview
Group order intake increased by 4.5% YoY (6.3% higher on an OCC basis) to
£391.1m, with a book-to-bill ratio of 1.06x (2024: 1.04x). All divisions
reported good OCC order intake growth with the strongest growth in Water &
Power and solid growth in Oil & Gas and Chemical, Process & Industrial
(CPI).
Group revenue increased 1.6% compared to the prior year to £367.3m (3.3%
higher OCC). Underlying market trends remained unchanged with stronger revenue
momentum towards the end of the half due to delivery phasing and the 2024
sales comparator (H1 2024 OCC sales growth 11.6%). NOAH Actuation Co., Ltd.
('Noah'), acquired in March 2025, delivered a good initial performance,
contributing 1.2% to total sales. This was in line with our business plan,
primarily contributing to CPI and Water & Power. FX was a -2.8% headwind
to revenues.
The Target Segment pillar of our strategy continued to deliver strong results,
with H1 Target Segment revenue growth of 7% OCC. Within the divisions, Water
& Power saw the strongest sales performance (8.6% OCC) helped by
underlying water market growth in several geographies and our Target Segment
approach in water infrastructure and treatment, and alternative energy. Power
markets were also strong. Oil & Gas delivered modest growth of 2.3% OCC,
with strong growth in upstream revenues (electrification), weaker midstream
markets despite good growth in LNG and stable downstream sales. CPI sales were
broadly flat YoY on an OCC basis (+0.3% OCC), reflecting good performance in
mining and marine markets, but weaker trends in chemical markets.
From a regional perspective, APAC was the fastest-growing area, delivering mid
to high single-digit OCC sales growth, driven primarily by a strong
performance in Water & Power. EMEA recorded modest OCC growth, supported
by solid Oil & Gas activity, though partially offset by softer CPI sales.
In the Americas, sales were flat year-on-year, with strength in CPI
counterbalanced by weaker trends in Oil & Gas.
Rotork Service, a key differentiator in our industry, reported another good
trading performance, growing faster than the broader Group. For the period, it
reached 23% of Group sales (22% in H1 2024) with good growth in Europe, India
and the Middle East.
Adjusted operating profit reached £80.8m with an adjusted operating margin of
22.0%, up 80 bps YoY. The strong margin performance was primarily driven by
the Oil & Gas segment, where margins improved to 25.8%, supported by
strong Target Segment growth, product mix and operational efficiencies. CPI's
reported margin was down slightly compared to the previous year (up 80bps on
an OCC basis), whereas Water & Power saw softer margins driven by an
unfavourable shift in mix and higher levels of investment.
Adjusted EPS of 7.1p rose 3.5% YoY on a reported basis, supported by strong
underlying operating profit growth, partially offset by FX headwinds and lower
net finance income following the acquisition of Noah and the share buyback.
Reported basic earnings per share was 5.7p (2024: 6.0p), a decrease of 5.8%
driven by lower net finance income of £0.4m (2024: £2.8m) and increased
adjusting items, including Business Transformation costs, of £16.1m (2024:
£9.6m).
Cash conversion of 89% (2024: 106%) was lower YoY largely driven by increases
in working capital to support delivery phasing. Business Transformation cash
costs and capex were in line with our expectations. Net cash finished the
period at £43.3m. ROCE of 37.0% (2024: 36.9%) remained at a high level.
Safety
In the first half of 2025, we recorded a Lost Time Injury Rate of 0.12,
compared to 0.09 recorded in H1 2024. Our Total Recordable Injury Rate was
0.37 (FY 2024: 0.22, H1 2024: 0.19). The safety of our people remains our top
priority. In response to our first half performance, we are re-doubling our
efforts to ensure the health and wellbeing of all our employees.
Growth+ strategy update
Our Growth+ strategy is rooted in our core purpose, keeping the world flowing
for future generations, and our vision to lead in intelligent flow control.
The strategy reflects our commitment to sustainability and our contribution to
a low-carbon future, while delivering advanced, intelligent systems that
enhance safety, efficiency, and uptime for our customers.
Our financial ambition is to deliver mid to high single-digit revenue growth
and adjusted operating margin in the mid-20% range over time. Our strategy is
structured around three key pillars: Target Segments, Customer Value and
Innovative Products & Services. All are underpinned by our mission to
Enable a Sustainable Future, supporting both our customers' environmental
goals and our own.
Within our Target Segments, we are focusing on areas with the
highest-potential across all divisions, those best positioned to deliver
above-market growth and attractive returns. Major industry trends such as
automation, electrification and digitalisation are accelerating demand, and we
are investing where these trends create the greatest impact. In the first half
of the year, we delivered several key wins across our Target Segments,
including:
- Oil & Gas - upstream electrification on a next generation
fully electrified offshore gas platform in the North Sea,
decarbonisation-related spend for a new LNG facility in the Middle East, and a
midstream electrification project for a significant gas pipeline in the
Americas
- CPI - cooling and related applications for datacentres in a number
of regions, alternative energy and electrification retrofit and newbuild
projects in marine, and local processing and refining projects in LATAM mining
markets
- Water & Power - desalination wins in Australia, the Middle
East and the Americas, project wins across multiple consortia in the TenneT
programme in the North Sea, and a PFAS water treatment project in the US
The Customer Value strategic pillar ensures that our customers remain at the
centre of everything we do. Our focus ranges from go-to-market improvements,
strengthening our global supply chain, and elevating the overall customer
experience. In May, Rotork became a member of the Rockwell Technology Partner
Program, increasing our visibility and integration within their network. Our
IQ3 Pro electric actuator with Ethernet connectivity is now included in
Rockwell's product catalogue and system design tools, making it easier for
engineers, EPCs and end users to discover and specify our products.
Within Rotork Service, we launched a series of new customer offerings,
including our Reliability Services Quote Builder tool, which streamlines and
personalises maintenance plan quotations. Internally, we rolled out our DNA
initiative, a group-wide competency framework built on a number of key
behaviours that will support our continued sustainable, connected and
purposeful growth.
The third pillar, Innovative Products & Services, continues to gain strong
momentum as we develop new offerings that drive growth and reinforce our
position as a market leader. Our strategy prioritises electrified and
connected solutions that align closely with our Target Segments and leverage
the strengths of Rotork Service. Recent launches include the IQ3 Perform,
providing a cost-effective entry into IQ3 ownership across selected markets,
the PIC0 intelligent controller, and the rollout of Noah products across our
broader sales network.
Capital allocation, dividend & share buyback
We have a clear and disciplined approach to capital allocation. Our priorities
in order remain organic investment, a progressive dividend, acquisitions and
shareholder returns. We have a track record of over 20 years of progressive
dividend per share growth (excluding covid), have strengthened the Group
through two acquisitions (Hanbay and Noah) since 2023 under the Growth+
strategy and returned £80m of excess cash to shareholders since the beginning
of 2024 through share buybacks.
In H1 we continued to deploy capital to drive further value creation:
- The Board declared a 2025 interim dividend of 2.95p per ordinary
share (7.3% growth YoY). The interim dividend will be paid on 22 September
2025 to ordinary shareholders on the register on 15 August 2025
- On 11 March 2025, we announced the acquisition of Noah for an
enterprise value of £42m. Noah is a leading South Korean manufacturer of
electric actuators, aligning with Rotork's end markets and key target
segments, and broadens Rotork's geographical coverage in Asia Pacific
- The Group completed £22m of the £50m buyback announced at the FY
2024 results (£30m by the end of July). The ordinary shares purchased will be
cancelled.
Rotork remains a highly cash-generative business, with considerable financial
flexibility, and we are well positioned to pursue value-generating
opportunities in line with our Growth+ strategy.
Board update
As announced on 1 August 2025, Karin Meurk-Harvey has advised the Board that
she will step down as a director of Rotork with effect from the conclusion of
the Company's next AGM on 1 May 2026.
Market update and outlook
The outlook for our end markets remains supportive. We are confident that our
Growth+ strategy, focused on Target Segments, will enable us to drive growth
above our broader end markets despite the current uncertain global
environment.
We continue to see opportunities in Oil & Gas markets. Our Target Segment
approach in upstream and midstream electrification, LNG, decarbonisation and
high Service exposure should continue to be tailwinds for growth. We expect
downstream markets (which represent the largest segment of the Oil & Gas
division) to be stable and despite the more uncertain macro environment, the
book-to-bill ratio remains positive.
CPI remains focused on pivoting between the growth opportunities in its end
markets. Its broad end markets have experienced subdued demand over the last
24 months, due to the energy crisis in Europe and slow investment growth in
China. However, we expect the division to continue to identify Target Segments
in structural growth markets, with a focus on specialty chemicals (including
pharmaceuticals), mining, critical HVAC and marine markets.
The outlook is positive for Water & Power. Stricter water regulations are
expected to remain a key driver for the division supported by tightening
compliance requirements, growing demand for advanced treatment technologies
and favourable funding cycles. Additionally, we expect to benefit from
rephasing of projects into H2, supportive power markets, and good momentum in
Rotork Service.
Our full-year expectations are unchanged, and we continue to anticipate 2025
to be another year of progress on an OCC basis.
Divisional review
Oil & Gas
£m H1 2025 H1 2024 Change OCC(2) Change
Revenue £169.6m £170.2m -0.4% +2.3%
Adjusted operating profit £43.8m £38.8m +13.1% +17.3%
Adjusted operating margin 25.8% 22.8% +300bps +330bps
Divisional revenue increased by 2.3% OCC YoY, with sales momentum gaining
strength through the first half. Order intake outpaced sales resulting in a
healthy book-to-bill ratio.
Upstream markets delivered good growth in H1, helped by strong growth in
electrification related revenues. Electrification spend continues to see
tailwinds as drilling and process equipment offerings expand, decarbonisation
spend increases and customers look to improve process control and reliability.
Midstream revenues were slightly down due to reduced spending in the US,
despite good growth in LNG. Downstream markets were stable helped by solid
demand for refined products and investments in operational efficiency.
Regionally, the division saw good growth in EMEA, helped by very strong
upstream and midstream electrification growth. Markets in APAC were stable
while the Americas declined, due to weaker demand in downstream markets.
Adjusted operating profit increased by 17.3% OCC to £43.8m. The margin
increased to 25.8% helped by strong Target Segment growth, product mix, and
operational efficiencies.
Chemical, Process & Industrial (CPI)
£m H1 2025 H1 2024 Change OCC(2) Change
Revenue £101.4m £100.9m +0.5% +0.3%
Adjusted operating profit £23.7m £23.7m -0.1% +3.6%
Adjusted operating margin 23.4% 23.5% -10bps +80bps
CPI sales remained broadly flat in H1 on an OCC basis, with underlying
momentum improving as the period progressed. Orders grew faster than sales,
maintaining a healthy book-to-bill ratio heading into the second half. Noah
made a good first contribution post-acquisition, adding 3.0% to divisional
sales in H1.
Mining continued to perform well in the period driven by strong copper demand
in South America and Indonesia. Marine demand was supported by investment in
electrification and alternative fuels for both new projects and retrofits. In
contrast, the chemical sector saw weaker growth, largely due to challenging
YoY comparisons and a weak bulk chemical market. Datacentres recorded strong
growth, and despite limited exposure, general industrial markets delivered
solid results. The broad process market saw a modest decline.
On a regional basis, CPI recorded robust growth in the Americas. EMEA declined
with lower sales in chemical and process markets in Europe. APAC grew helped
by good performance in India.
Adjusted operating profit of £23.7m was broadly flat YoY, with a margin of
23.4%. The solid underlying performance (OCC margins up 80bps) was offset by
FX and the initial integration of Noah.
Water & Power
£m H1 2025 H1 2024 Change OCC(2) Change
Revenue £96.3m £90.3m +6.7% +8.6%
Adjusted operating profit £24.5m £24.3m +0.6% +4.2%
Adjusted operating margin 25.4% 26.9% -150bps -110bps
Divisional sales increased by 8.6% on an OCC basis, showing consistent growth
throughout the period and maintaining a favourable book-to-bill ratio.
Water & Power saw robust demand in water infrastructure and treatment
markets, with good growth in several regions. Alternative energy markets
(including nuclear, hydro and solar) also saw strong growth, helped by wins in
the HVDC market. Power markets also delivered good growth, driven by strong
performance in the gas power segment (US, Middle East and China) and
traditional generation markets.
Across regions, Water & Power posted strong results in APAC, with notable
success in desalination, alternative energy and treatment projects. In the
Americas, sales were broadly flat YoY but EMEA grew helped by strength in core
gas power markets.
Adjusted operating profit of £24.5m was higher YoY on an OCC basis. Despite
operating leverage on higher volumes, mix effects and higher investment
resulted in the adjusted operating margin declining YoY.
By order of the Board
Kiet Huynh
Chief Executive
4 August 2025
Financial review
Financial Key Performance Indicators (KPIs)
H1 2025 H1 2024 FY 2024
Revenue growth 1.6% 8.0% 4.9%
Adjusted operating margin 22.0% 21.2% 23.6%
Cash conversion 89% 106% 119%
Return on capital employed 37.0% 36.9% 37.3%
Adjusted EPS growth 3.5% 18.0% 8.7%
The KPIs are defined below:
· Revenue growth is defined as the increase in revenue divided by
comparative period revenue
· Adjusted operating margin is defined as adjusted operating profit as
a percentage of revenue (note 2a)
· Cash conversion is defined as cash generated from operations (note
12) as a percentage of adjusted operating profit (note 2i)
· Return on capital employed is defined as adjusted operating profit as
a percentage of average capital employed. Capital employed is defined as net
assets less net cash (cash and short-term deposits less interest-bearing loans
and borrowings) and less the pension fund liability net of related deferred
tax asset (note 2f)
· Adjusted EPS growth is defined as the increase in adjusted basic EPS
(based on adjusted profit after tax) divided by the comparative period
adjusted basic EPS (note 2c).
Adjusted earnings reconciliation
£m H1 2025 Reported results Amortisation of acquired intangibles Business Transformation costs Other H1 2025 H1 2024
costs Adjusted Adjusted
results results
Operating profit 64.7 1.4 12.6 2.1 80.8 76.5
Profit before tax 65.1 1.4 12.6 2.1 81.2 79.3
Tax (16.5) (0.4) (3.1) (0.5) (20.5) (20.1)
Profit after tax 48.6 1.0 9.5 1.6 60.7 59.2
The table above shows the adjustments between the reported results for the
significant non-cash and other adjusting items and the adjusted results. Note
2 of the interim financial statements sets out the alternative performance
measures used by the Group and how these reconcile to the reported results.
Further details of the adjusting items are provided in note 5.
Adjusting items
Adjusted profit measures are presented alongside reported 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, IFRS measures, provide stakeholders with additional helpful
information on the performance of the business.
The reported profit measures are adjusted to exclude amortisation of acquired
intangibles, Business Transformation costs associated with the implementation
of a new ERP system and integration with business processes, and other
adjustments that are considered significant and where treatment as an adjusted
item provides stakeholders with additional useful information to assess the
trading performance of the Group on a consistent basis. Further details of
adjusted items are provided in note 5.
Acquisition
On 12 March 2025, the Group completed the acquisition of 100% of the share
capital of Noah for a total purchase consideration of £37.6m. Initial
consideration of £35.6m was paid on completion, with a further deferred
consideration of £2.0m recognised, with future payment contingent on certain
performance conditions being met. Including cash acquired of £3.8m, the total
cash outflow for current period acquisitions was £31.8m plus settlement of
debt acquired of £8.0m. Further details are provided in note 4.
Cash generation
Cash generated from operations decreased 11.6% to £71.9m (2024: £81.3m) with
the increase in adjusted operating profit offset against an increased working
capital outflow to support growing revenues. The cash conversion of adjusted
operating profit into operating cash was down YoY at 89% (2024: 106%).
Net cash generated from operating activities decreased 25.7% to £39.3m (2024:
£52.9m), in line with the cash conversion noted above and adversely impacted
by an increase in income taxes paid to £18.6m (2024: £17.1m) and an increase
in the cash flow impact of adjusting items to £14.0m (2024: £7.9m).
Capital expenditure in the period was £5.5m (2024: £5.8m), excluding £0.3m
in capitalised software (2024: £1.2m) and £2.3m in capitalised product
development costs (2024: £1.7m). Our total Research and Development (R&D)
cash spend was £6.7m which represented 1.8% of revenue (2024: £6.5m and 1.8%
respectively).
As a result, free cash flow (refer to note 2j) in the period was an inflow of
£29.3m (2024: £44.0m).
The other major cash outflows in the period were dividends to ordinary
shareholders of £42.1m (2024: £39.9m), current period share buyback of
£21.6m (2024: £18.1m) and completion of the Noah acquisition of £31.8m
(2024: £nil) plus settlement of debt acquired of £8.0m (2024: £nil).
Balance sheet
The Group finished the period with a net cash position of £43.3m (December
2024: £125.3m). This includes cash and cash equivalents of £66.4m (December
2024: £150.0m) offset by lease liabilities of £23.1m (December 2024:
£24.7m).
Net working capital in the balance sheet increased £5.0m since the year end,
largely driven by inventories to support growing orderbook. In total, net
working capital as a percentage of revenue was 26.4% compared with 25.1% in
December 2024 and 26.4% in June 2024.
The Group maintains sufficient liquidity for ongoing operations including a
£75m Revolving Credit Facility (RCF) which matures in December 2027. As at
the end of the period, £nil was drawn under the RCF (December 2024: £nil).
Taxation
The estimated effective tax rate used for the year ending 31 December 2025 is
25.2% (2024 actual rate: 25.4%). Removing the impact of the adjusted items
provides a more comparable measure and, on this basis, the adjusted effective
tax rate is 25.2% (2024 actual rate: 25.2%).
Share buyback programme
The £50.0m share buyback programme that was announced on 11 March 2025
commenced during the period. By 30 June 2025 shares totalling £21.6m had been
purchased and cancelled by the Group. Further details are provided in note 13.
Retirement benefits
The Group operates defined benefit pension schemes in the US and UK, the
larger of which is in the UK. Both the schemes are closed to future accrual,
with bulk annuities purchased in 2023 and 2024 to cover the UK scheme's
pensioner liabilities. The IAS 19 funding position of the UK and US schemes
reduced from a net deficit of £3.6m as at 31 December 2024 to a net deficit
of £2.4m as at 30 June 2025.
Dividend
The Board has declared an interim dividend of 2.95p (H1 2024: 2.75p) per
ordinary share. The interim dividend will be paid on 22 September 2025 to
ordinary shareholders on the register at the close of business on 15 August
2025.
The last date for ordinary shareholders to elect for the Dividend Reinvestment
Plan ('DRIP') is 1 September 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) .
Risk update
The Group has an established risk management process as part of the corporate
governance framework set out in the 2024 Annual Report and Accounts. The
principal risks and uncertainties facing our businesses are monitored on an
ongoing basis in line with the 2024 Corporate Governance Code. The risk
management process is described in detail on pages 68 to 77 of the 2024 Annual
Report and Accounts. The Group's principal risks and uncertainties were
reviewed by the Board and the Board have concluded that they remain applicable
for the second half of the financial year. A more detailed description of the
Group's principal risks and uncertainties is set out on pages 70 to 77 of the
2024 Annual Report and Accounts.
Whilst there has been no material change in the principal risks and
uncertainties under review by the business since the risks were disclosed in
the 2024 Annual Report and Accounts, geopolitical instability remains at an
elevated level. The Group continues to monitor potential impacts and put in
place mitigations to reduce the impact of those underlying risks. We also
continue to respond to the external threat of increasingly sophisticated
cyberattacks by investing in our cyber strategy.
We continue to monitor and review emerging risks and opportunities, as
described in the 2024 Annual Report and Accounts on page 70. Emerging risks
and opportunities are subject to uncertainty and can be difficult to quantify.
Emerging risks and opportunities under review include those in relation to
geopolitical events, technological, social, environmental, climate and
sustainability risks.
Principal risks and uncertainties
1. Increased competition: Increased competition on price, product or
technological offering leading to a loss of sales globally or market share.
2. Geopolitical instability: Increasing social and political instability
results in disruption and increased protectionism in key geographic markets.
Business disruption could impact our sales and might ultimately lead to a loss
of assets located in the affected region.
3. Health & Safety: The nature of Rotork's core business and geographical
locations involves potential risks to the health and safety of our employees
or other stakeholders.
4. Compliance with laws and regulations: Failure of our people or third
parties with whom we do business to comply with laws or regulations or to
uphold our high ethical standards and values.
5. Climate commitments: We do not deliver against our commitment to enable a
sustainable future and Rotork is not recognised by our stakeholders as being
part of the solution, leading to reputational damage.
6. People: Our people are critical to delivering success and growth. An
inability to attract, retain and develop key and diverse talent could mean we
fail to successfully deliver our strategic goals.
7. Major in-field product failure: Major in-field failure of a new or existing
Rotork product potentially leading to a product recall, major on-site warranty
programme or the loss of an existing or potential customer.
8. Supply chain disruption: Supply chain disruption which may arise such as a
tooling failure at a key supplier, logistics issues, severe weather events
impacting key suppliers which would cause disruption to manufacturing at a
Rotork factory.
9. Critical IT system failure and cybersecurity: Failure to provide, maintain
and update the systems and infrastructure required by the Rotork business.
Failure to protect Rotork operations, sensitive or commercial data, technical
specifications and financial information from cybercrime.
10. Business change management: The delivery of our strategic initiatives
relies upon our ability to deliver a series of key change programmes without
causing business disruption or having a negative impact to our day-to-day
operations.
Statement of Directors' Responsibilities
The directors confirm that, to the best of their knowledge, this condensed
consolidated interim financial information has been prepared in accordance
with IAS 34 as adopted by the United Kingdom, the interim financial statements
give a true and fair view of the consolidated assets, liabilities, financial
position and profit of the Company and its group companies taken as a whole,
and that the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely:
· an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· material related-party transactions in the first six months, and any
material changes in the related-party transactions described in the last
annual report.
These interim financial statements and the interim management report are the
responsibility of, and have been approved by, the directors. A list of the
current directors can be found in the "About Us" section of the Rotork
website: www.rotork.com (http://www.rotork.com) .
By order of the Board
Kiet Huynh
Chief Executive
4 August 2025
Independent Review Report to Rotork plc
We have been engaged by Rotork plc ("the Company") to review the condensed set
of financial statements in the half-yearly financial report for the six months
ended 30 June 2025 which comprises the condensed consolidated income
statement, the condensed consolidated statement of comprehensive income and
expense, the condensed consolidated balance sheet, the condensed consolidated
statement of changes in equity, the condensed consolidated cash flow statement
and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Huw Brown
for and on behalf of KPMG LLP
Chartered Accountants
66 Queen Square
Bristol
BS1 4BE
4 August 2025
Condensed consolidated income statement
For the six months ended 30 June 2025
First half First half Full year
2025 2024 2024
Note £m £m £m
Revenue 3 367.3 361.4 754.4
Cost of sales (185.1) (187.5) (382.5)
Gross profit 182.2 173.9 371.9
Other income 0.3 0.5 1.8
Distribution costs (3.0) (3.1) (6.7)
Administrative expenses (114.6) (104.3) (230.9)
Other expenses (0.2) (0.1) (0.2)
Operating profit 3 64.7 66.9 135.9
Finance income 6 4.0 3.7 7.3
Finance expense 6 (3.6) (0.9) (2.7)
Profit before tax 65.1 69.7 140.5
Income tax expense 7 (16.5) (17.7) (35.7)
Profit for the period 48.6 52.0 104.8
Attributable to:
Owners of the parent 47.7 51.7 103.6
Non-controlling interests 0.9 0.3 1.2
48.6 52.0 104.8
Basic earnings per share 9 5.7p 6.0p 12.1p
Diluted earnings per share 9 5.6p 6.0p 12.1p
Operating profit 64.7 66.9 135.9
Adjustments to profit:
- Amortisation of acquired intangible assets 5 1.4 1.3 2.6
- Defined benefit scheme settlement loss 5 - - 18.0
- Other adjustments 5 14.7 8.3 21.9
Adjusted operating profit 2, 3 80.8 76.5 178.4
Adjusted basic earnings per share 2, 9 7.1p 6.9p 15.9p
Adjusted diluted earnings per share 2, 9 7.0p 6.8p 15.8p
The KPIs are defined below:
· Revenue growth is defined as the increase in revenue divided by
comparative period revenue
· Adjusted operating margin is defined as adjusted operating profit as
a percentage of revenue (note 2a)
· Cash conversion is defined as cash generated from operations (note
12) as a percentage of adjusted operating profit (note 2i)
· Return on capital employed is defined as adjusted operating profit as
a percentage of average capital employed. Capital employed is defined as net
assets less net cash (cash and short-term deposits less interest-bearing loans
and borrowings) and less the pension fund liability net of related deferred
tax asset (note 2f)
· Adjusted EPS growth is defined as the increase in adjusted basic EPS
(based on adjusted profit after tax) divided by the comparative period
adjusted basic EPS (note 2c).
Adjusted earnings reconciliation
£m H1 2025 Reported results Amortisation of acquired intangibles Business Transformation costs Other H1 2025 H1 2024
costs Adjusted Adjusted
results results
Operating profit 64.7 1.4 12.6 2.1 80.8 76.5
Profit before tax 65.1 1.4 12.6 2.1 81.2 79.3
Tax (16.5) (0.4) (3.1) (0.5) (20.5) (20.1)
Profit after tax 48.6 1.0 9.5 1.6 60.7 59.2
The table above shows the adjustments between the reported results for the
significant non-cash and other adjusting items and the adjusted results. Note
2 of the interim financial statements sets out the alternative performance
measures used by the Group and how these reconcile to the reported results.
Further details of the adjusting items are provided in note 5.
Adjusting items
Adjusted profit measures are presented alongside reported 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, IFRS measures, provide stakeholders with additional helpful
information on the performance of the business.
The reported profit measures are adjusted to exclude amortisation of acquired
intangibles, Business Transformation costs associated with the implementation
of a new ERP system and integration with business processes, and other
adjustments that are considered significant and where treatment as an adjusted
item provides stakeholders with additional useful information to assess the
trading performance of the Group on a consistent basis. Further details of
adjusted items are provided in note 5.
Acquisition
On 12 March 2025, the Group completed the acquisition of 100% of the share
capital of Noah for a total purchase consideration of £37.6m. Initial
consideration of £35.6m was paid on completion, with a further deferred
consideration of £2.0m recognised, with future payment contingent on certain
performance conditions being met. Including cash acquired of £3.8m, the total
cash outflow for current period acquisitions was £31.8m plus settlement of
debt acquired of £8.0m. Further details are provided in note 4.
Cash generation
Cash generated from operations decreased 11.6% to £71.9m (2024: £81.3m) with
the increase in adjusted operating profit offset against an increased working
capital outflow to support growing revenues. The cash conversion of adjusted
operating profit into operating cash was down YoY at 89% (2024: 106%).
Net cash generated from operating activities decreased 25.7% to £39.3m (2024:
£52.9m), in line with the cash conversion noted above and adversely impacted
by an increase in income taxes paid to £18.6m (2024: £17.1m) and an increase
in the cash flow impact of adjusting items to £14.0m (2024: £7.9m).
Capital expenditure in the period was £5.5m (2024: £5.8m), excluding £0.3m
in capitalised software (2024: £1.2m) and £2.3m in capitalised product
development costs (2024: £1.7m). Our total Research and Development (R&D)
cash spend was £6.7m which represented 1.8% of revenue (2024: £6.5m and 1.8%
respectively).
As a result, free cash flow (refer to note 2j) in the period was an inflow of
£29.3m (2024: £44.0m).
The other major cash outflows in the period were dividends to ordinary
shareholders of £42.1m (2024: £39.9m), current period share buyback of
£21.6m (2024: £18.1m) and completion of the Noah acquisition of £31.8m
(2024: £nil) plus settlement of debt acquired of £8.0m (2024: £nil).
Balance sheet
The Group finished the period with a net cash position of £43.3m (December
2024: £125.3m). This includes cash and cash equivalents of £66.4m (December
2024: £150.0m) offset by lease liabilities of £23.1m (December 2024:
£24.7m).
Net working capital in the balance sheet increased £5.0m since the year end,
largely driven by inventories to support growing orderbook. In total, net
working capital as a percentage of revenue was 26.4% compared with 25.1% in
December 2024 and 26.4% in June 2024.
The Group maintains sufficient liquidity for ongoing operations including a
£75m Revolving Credit Facility (RCF) which matures in December 2027. As at
the end of the period, £nil was drawn under the RCF (December 2024: £nil).
Taxation
The estimated effective tax rate used for the year ending 31 December 2025 is
25.2% (2024 actual rate: 25.4%). Removing the impact of the adjusted items
provides a more comparable measure and, on this basis, the adjusted effective
tax rate is 25.2% (2024 actual rate: 25.2%).
Share buyback programme
The £50.0m share buyback programme that was announced on 11 March 2025
commenced during the period. By 30 June 2025 shares totalling £21.6m had been
purchased and cancelled by the Group. Further details are provided in note 13.
Retirement benefits
The Group operates defined benefit pension schemes in the US and UK, the
larger of which is in the UK. Both the schemes are closed to future accrual,
with bulk annuities purchased in 2023 and 2024 to cover the UK scheme's
pensioner liabilities. The IAS 19 funding position of the UK and US schemes
reduced from a net deficit of £3.6m as at 31 December 2024 to a net deficit
of £2.4m as at 30 June 2025.
Dividend
The Board has declared an interim dividend of 2.95p (H1 2024: 2.75p) per
ordinary share. The interim dividend will be paid on 22 September 2025 to
ordinary shareholders on the register at the close of business on 15 August
2025.
The last date for ordinary shareholders to elect for the Dividend Reinvestment
Plan ('DRIP') is 1 September 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) .
Risk update
The Group has an established risk management process as part of the corporate
governance framework set out in the 2024 Annual Report and Accounts. The
principal risks and uncertainties facing our businesses are monitored on an
ongoing basis in line with the 2024 Corporate Governance Code. The risk
management process is described in detail on pages 68 to 77 of the 2024 Annual
Report and Accounts. The Group's principal risks and uncertainties were
reviewed by the Board and the Board have concluded that they remain applicable
for the second half of the financial year. A more detailed description of the
Group's principal risks and uncertainties is set out on pages 70 to 77 of the
2024 Annual Report and Accounts.
Whilst there has been no material change in the principal risks and
uncertainties under review by the business since the risks were disclosed in
the 2024 Annual Report and Accounts, geopolitical instability remains at an
elevated level. The Group continues to monitor potential impacts and put in
place mitigations to reduce the impact of those underlying risks. We also
continue to respond to the external threat of increasingly sophisticated
cyberattacks by investing in our cyber strategy.
We continue to monitor and review emerging risks and opportunities, as
described in the 2024 Annual Report and Accounts on page 70. Emerging risks
and opportunities are subject to uncertainty and can be difficult to quantify.
Emerging risks and opportunities under review include those in relation to
geopolitical events, technological, social, environmental, climate and
sustainability risks.
Principal risks and uncertainties
1. Increased competition: Increased competition on price, product or
technological offering leading to a loss of sales globally or market share.
2. Geopolitical instability: Increasing social and political instability
results in disruption and increased protectionism in key geographic markets.
Business disruption could impact our sales and might ultimately lead to a loss
of assets located in the affected region.
3. Health & Safety: The nature of Rotork's core business and geographical
locations involves potential risks to the health and safety of our employees
or other stakeholders.
4. Compliance with laws and regulations: Failure of our people or third
parties with whom we do business to comply with laws or regulations or to
uphold our high ethical standards and values.
5. Climate commitments: We do not deliver against our commitment to enable a
sustainable future and Rotork is not recognised by our stakeholders as being
part of the solution, leading to reputational damage.
6. People: Our people are critical to delivering success and growth. An
inability to attract, retain and develop key and diverse talent could mean we
fail to successfully deliver our strategic goals.
7. Major in-field product failure: Major in-field failure of a new or existing
Rotork product potentially leading to a product recall, major on-site warranty
programme or the loss of an existing or potential customer.
8. Supply chain disruption: Supply chain disruption which may arise such as a
tooling failure at a key supplier, logistics issues, severe weather events
impacting key suppliers which would cause disruption to manufacturing at a
Rotork factory.
9. Critical IT system failure and cybersecurity: Failure to provide, maintain
and update the systems and infrastructure required by the Rotork business.
Failure to protect Rotork operations, sensitive or commercial data, technical
specifications and financial information from cybercrime.
10. Business change management: The delivery of our strategic initiatives
relies upon our ability to deliver a series of key change programmes without
causing business disruption or having a negative impact to our day-to-day
operations.
Statement of Directors' Responsibilities
The directors confirm that, to the best of their knowledge, this condensed
consolidated interim financial information has been prepared in accordance
with IAS 34 as adopted by the United Kingdom, the interim financial statements
give a true and fair view of the consolidated assets, liabilities, financial
position and profit of the Company and its group companies taken as a whole,
and that the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely:
· an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· material related-party transactions in the first six months, and any
material changes in the related-party transactions described in the last
annual report.
These interim financial statements and the interim management report are the
responsibility of, and have been approved by, the directors. A list of the
current directors can be found in the "About Us" section of the Rotork
website: www.rotork.com (http://www.rotork.com) .
By order of the Board
Kiet Huynh
Chief Executive
4 August 2025
Independent Review Report to Rotork plc
We have been engaged by Rotork plc ("the Company") to review the condensed set
of financial statements in the half-yearly financial report for the six months
ended 30 June 2025 which comprises the condensed consolidated income
statement, the condensed consolidated statement of comprehensive income and
expense, the condensed consolidated balance sheet, the condensed consolidated
statement of changes in equity, the condensed consolidated cash flow statement
and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Huw Brown
for and on behalf of KPMG LLP
Chartered Accountants
66 Queen Square
Bristol
BS1 4BE
4 August 2025
Condensed consolidated income statement
For the six months ended 30 June 2025
First half
First half
Full year
2025
2024
2024
Note
£m
£m
£m
Revenue
3
367.3
361.4
754.4
Cost of sales
(185.1)
(187.5)
(382.5)
Gross profit
182.2
173.9
371.9
Other income
0.3
0.5
1.8
Distribution costs
(3.0)
(3.1)
(6.7)
Administrative expenses
(114.6)
(104.3)
(230.9)
Other expenses
(0.2)
(0.1)
(0.2)
Operating profit
3
64.7
66.9
135.9
Finance income
6
4.0
3.7
7.3
Finance expense
6
(3.6)
(0.9)
(2.7)
Profit before tax
65.1
69.7
140.5
Income tax expense
7
(16.5)
(17.7)
(35.7)
Profit for the period
48.6
52.0
104.8
Attributable to:
Owners of the parent
47.7
51.7
103.6
Non-controlling interests
0.9
0.3
1.2
48.6
52.0
104.8
Basic earnings per share
9
5.7p
6.0p
12.1p
Diluted earnings per share
9
5.6p
6.0p
12.1p
Operating profit
Adjustments to profit:
64.7
66.9
135.9
- Amortisation of acquired intangible assets
5
1.4
1.3
2.6
- Defined benefit scheme settlement loss
5
-
-
18.0
- Other adjustments
5
14.7
8.3
21.9
Adjusted operating profit
2, 3
80.8
76.5
178.4
Adjusted basic earnings per share
2, 9
7.1p
6.9p
15.9p
Adjusted diluted earnings per share
2, 9
7.0p
6.8p
15.8p
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2025
First half First half Full year
2025 2024 2024
£m £m £m
Profit for the period 48.6 52.0 104.8
Other comprehensive income and expense
Items that may be subsequently reclassified to the income statement:
Foreign currency translation differences (18.7) (11.3) (12.9)
Changes in fair value of cash flow hedges net of tax 0.5 0.3 (0.1)
(18.2) (11.0) (13.0)
Items that may not be subsequently reclassified to the income statement:
Actuarial gain/(loss) in pension scheme net of tax 1.0 - 0.6
Income and expenses recognised directly in equity (17.2) (11.0) (12.4)
Total comprehensive income for the period 31.4 41.0 92.4
Attributable to:
Owners of the parent 30.7 40.6 91.1
Non-controlling interests 0.7 0.4 1.3
31.4 41.0 92.4
Condensed consolidated balance sheet
At 30 June 2025
30 June 30 June 31 Dec
2025 2024 2024
Note £m £m £m
Non-current assets
Goodwill 240.2 224.4 224.8
Intangible assets 46.1 30.8 31.4
Property, plant and equipment 96.6 74.2 90.3
Derivative financial instruments 0.6 0.3 0.1
Defined benefit scheme surplus - 12.8 -
Deferred tax assets 19.0 12.3 22.1
Total non-current assets 402.5 354.8 368.7
Current assets
Inventories 10 88.4 93.9 83.4
Trade receivables 150.8 137.4 149.5
Current tax 4.8 4.4 4.2
Derivative financial instruments 2.4 1.0 0.9
Other receivables 30.3 25.3 23.8
Cash and short-term deposits 67.1 131.2 150.0
Total current assets 343.8 393.2 411.8
Total assets 746.3 748.0 780.5
Current liabilities
Interest-bearing loans and borrowings 14 5.0 3.5 4.3
Trade payables 45.1 40.4 43.8
Employee benefits 20.1 18.2 29.1
Current tax 13.5 11.4 16.0
Derivative financial instruments 1.0 0.3 0.4
Other payables 52.4 44.2 50.0
Provisions 4.4 4.4 4.8
Total current liabilities 141.5 122.4 148.4
Non-current liabilities
Interest-bearing loans and borrowings 14 18.8 8.4 20.4
Employee benefits 11 8.0 4.7 7.7
Deferred tax liabilities 5.3 3.1 4.0
Derivative financial instruments 0.1 - 0.1
Provisions 3.4 1.2 1.4
Total non-current liabilities 35.6 17.4 33.6
Total liabilities 177.1 139.8 182.0
Net assets 569.2 608.2 598.5
Equity
Issued equity capital 13 4.2 4.3 4.2
Share premium 22.0 21.3 21.9
Other reserves (17.5) 2.4 0.5
Retained earnings 558.2 578.4 569.2
Equity attributable to the parent 566.9 606.4 595.8
Non-controlling interests 2.3 1.8 2.7
Total equity 569.2 608.2 598.5
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2025
Issued equity Share Translation Capital Attributable to owners of the parent Non-controlling interests Total equity
capital premium reserve* redemption Hedging reserve* Retained earnings £m £m £m
£m £m £m reserve* £m £m
£m
Balance at 31 December 2024 4.2 21.9 (1.8) 1.8 0.5 569.2 595.8 2.7 598.5
Profit for the period - - - - - 47.7 47.7 0.9 48.6
Other comprehensive (expense)/income
Foreign currency translation differences - - (18.5) - - - (18.5) (0.2) (18.7)
Changes in fair value of cash flow hedges - - - - 0.6 - 0.6 - 0.6
Actuarial gain on defined benefit pension plans - - - - - 1.3 1.3 - 1.3
Tax in other comprehensive (expense)/income - - - - (0.1) (0.3) (0.4) - (0.4)
Total other comprehensive (expense)/income - - (18.5) - 0.5 1.0 (17.0) (0.2) (17.2)
Total comprehensive income - - (18.5) - 0.5 48.7 30.7 0.7 31.4
Transactions with owners, recorded directly in equity
Equity settled share-based payment transactions - - - - - 2.5 2.5 - 2.5
Tax on equity settled share-based payment transactions - - - - - (0.5) (0.5) - (0.5)
Share options exercised by employees - 0.1 - - - - 0.1 - 0.1
Own ordinary shares acquired - - - - - (0.4) (0.4) - (0.4)
Own ordinary shares awarded under share schemes - - - - - 2.4 2.4 - 2.4
Share buyback programme - - - - - (21.6) (21.6) - (21.6)
Dividends paid on ordinary shares - - - - - (42.1) (42.1) - (42.1)
Dividends paid to non-controlling interests - - - - - - - (1.1) (1.1)
Balance at 30 June 2025 4.2 22.0 (20.3) 1.8 1.0 558.2 566.9 2.3 569.2
* Other reserves on face of the condensed consolidated balance sheet includes
the Translation reserve, Capital redemption reserve and Hedging reserve.
Condensed consolidated statement of changes in equity (continued)
For the six months ended 30 June 2025
Issued equity Share Translation Capital Attributable to owners of the parent Non-controlling interests Total equity
capital premium reserve* redemption Hedging reserve* Retained earnings £m £m £m
£m £m £m reserve* £m £m
£m
Balance at 31 December 2023 4.3 21.0 11.2 1.7 0.6 581.8 620.6 1.7 622.3
Profit for the period - - - - - 51.7 51.7 0.3 52.0
Other comprehensive (expense)/income
Foreign currency translation differences - - (11.4) - - - (11.4) 0.1 (11.3)
Changes in fair value of cash flow hedges - - - - 0.5 - 0.5 - 0.5
Actuarial gain on defined benefit pension plans - - - - - 0.9 0.9 - 0.9
Tax in other comprehensive (expense)/income - - - - (0.2) (0.9) (1.1) - (1.1)
Total other comprehensive (expense)/income - - (11.4) - 0.3 - (11.1) 0.1 (11.0)
Total comprehensive income - - (11.4) - 0.3 51.7 40.6 0.4 41.0
Transactions with owners, recorded directly in equity
Equity settled share-based payment transactions - - - - - 1.5 1.5 - 1.5
Tax on equity settled share-based payment transactions - - - - - (0.3) (0.3) - (0.3)
Share options exercised by employees - 0.3 - - - - 0.3 - 0.3
Own ordinary shares acquired - - - - - (1.3) (1.3) - (1.3)
Own ordinary shares awarded under share schemes - - - - - 3.0 3.0 - 3.0
Share buyback programme - - - - - (18.1) (18.1) - (18.1)
Dividends paid on ordinary shares - - - - - (39.9) (39.9) - (39.9)
Dividends paid to non-controlling interests - - - - - - - (0.3) (0.3)
Balance at 30 June 2024 4.3 21.3 (0.2) 1.7 0.9 578.4 606.4 1.8 608.2
* Other reserves on face of the condensed consolidated balance sheet includes
the Translation reserve, Capital redemption reserve and Hedging reserve.
Condensed consolidated statement of cash flows
For the six months ended 30 June 2025
First half First half Full year
2025 2024 2024
Note £m £m £m
Cash flows from operating activities
Cash generated from operations 12 71.9 81.3 212.7
Operating cash flow impact of other adjustments 5 (14.0) (7.9) (21.2)
Difference between defined benefit pension charge and cash contribution - (3.4) (3.9)
Income taxes paid (18.6) (17.1) (38.8)
Net cash flows from operating activities 39.3 52.9 148.8
Cash flows from investing activities
Purchase of property, plant and equipment (5.5) (5.8) (14.0)
Purchase of intangible assets (0.3) (1.2) (1.6)
Product development costs capitalised (2.3) (1.7) (4.3)
Sale of property, plant and equipment 2.0 0.1 0.2
Acquisition of business - net of cash acquired 4 (31.8) - -
Settlement of hedging derivatives (0.7) 1.3 2.7
Interest received 1.0 2.2 4.1
Net cash flows from investing activities (37.6) (5.1) (12.9)
Cash flows from financing activities
Issue of ordinary share capital 0.1 0.2 0.8
Own ordinary shares acquired (0.4) (1.3) (10.3)
Interest paid (0.7) (0.6) (1.9)
Repayment of lease liabilities (2.1) (1.8) (4.2)
Proceeds from borrowings 7.5 - -
Repayment of borrowings (15.5) - -
Share buyback programme (21.6) (18.1) (50.3)
Dividends paid on ordinary shares (42.1) (39.9) (63.3)
Dividends paid to non-controlling interests (1.1) (0.3) (0.3)
Net cash flows from financing activities (75.9) (61.8) (129.5)
Net (decrease)/increase in cash and cash equivalents (74.2) (14.0) 6.4
Cash and cash equivalents at 1 January 150.0 146.4 146.4
Effect of exchange rate fluctuations on cash held (9.4) (1.2) (2.8)
Cash and cash equivalents at end of period 66.4 131.2 150.0
Notes to the interim financial statements
1. Status of condensed consolidated interim financial
statements, accounting policies and basis of significant estimates
General information
These interim financial statements are presented in sterling. All values are
rounded to the nearest 0.1 million pounds (£m) except where otherwise
indicated.
Rotork plc 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 condensed consolidated interim financial statements for the six months
ended 30 June 2025 are unaudited and the auditor has reported in accordance
with International Standard on Review Engagements (UK and Ireland) 2410,
'Review of Interim Financial Information Performed by the Independent Auditor
of the Entity'.
The information shown for the year ended 31 December 2024 does not constitute
statutory accounts within the meaning of Section 435 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2024 were approved by
the Board on 11 March 2025 and delivered to the Registrar of Companies. The
auditor's report on those financial statements was unqualified, did not
contain an emphasis of matter paragraph and did not contain any statement
under Section 498 (2) or (3) of the Companies Act 2006. The consolidated
financial statements of the Group for the year ended 31 December 2024 are
available from the Company's registered office or website.
Basis of preparation
The condensed consolidated interim financial statements of the Company for the
six months ended 30 June 2025 comprise the results for the Company and its
subsidiaries (together referred to as 'the Group'). These condensed
consolidated interim financial statements have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Services Authority
and with IAS 34 'Interim Financial Reporting' as adopted by the United
Kingdom. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December 2024, which
have been prepared in accordance with international accounting standards in
conformity with UK adopted international accounting standards (UK Adopted
IFRS).
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 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. Accordingly, the directors 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
£43.3m, an undrawn committed revolving credit facility of £75.0m and
overdraft facilities of £45.8m (£0.7m of which was drawn 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 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.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and
judgements are continually evaluated based on historical experience and other
factors, including expectations of future events, that are believed to be
reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and
assumptions. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the current financial year are discussed in the financial
statements for the year ended 31 December 2024.
Taxation (estimate)
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual profit or loss.
Accounting policies
The accounting policies applied and significant estimates used by the Group in
these condensed consolidated interim financial statements are the same as
those applied by the Group in its consolidated financial statements for the
year ended 31 December 2024, except for the adoption of new standards
effective as of 1 January 2025 and income taxes as explained in note 7. The
Group has not early-adopted any other standard, interpretation or amendment
that has been issued but is not yet effective.
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
There are no further narrow scope amendments which have been issued where the
application of the amendments would have a material impact on the disclosures,
net assets or results of the Group.
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 how they are reconciled to IFRS reported 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 5.
First half First half Full year
2025 2024 2024
£m £m £m
Operating profit 64.7 66.9 135.9
Adjustments:
Amortisation of acquired intangible assets 1.4 1.3 2.6
Defined benefit scheme settlement loss - - 18.0
Business Transformation costs 12.6 7.6 17.2
Other costs 2.1 0.7 4.7
Adjusted operating profit 80.8 76.5 178.4
b. Adjusted profit before tax
The adjustments in calculating adjusted profit before tax are consistent with
those in calculating adjusted operating profit above.
First half First half Full year
2025 2024 2024
£m £m £m
Profit before tax 65.1 69.7 140.5
Adjustments:
Amortisation of acquired intangible assets 1.4 1.3 2.6
Defined benefit scheme settlement loss - - 18.0
Business Transformation costs 12.6 7.6 17.2
Other costs 2.1 0.7 4.7
Adjusted profit before tax 81.2 79.3 183.0
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 9). Adjusted net profit
attributable to ordinary shareholders is calculated as follows:
First half First half Full year
2025 2024 2024
£m £m £m
Net profit attributable to ordinary shareholders 47.7 51.7 103.6
Adjustments:
Amortisation of acquired intangible assets 1.4 1.3 2.6
Defined benefit scheme settlement loss - - 18.0
Business Transformation costs 12.6 7.6 17.2
Other costs 2.1 0.7 4.7
Tax effect on adjusted items (4.0) (2.4) (10.5)
Adjusted net profit attributable to ordinary shareholders 59.8 58.9 135.6
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 9).
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.
First half First half Full year
2025 2024 2024
£m £m £m
Adjusted operating profit
As reported - - 178.4
Rolling 12 months 182.7 175.7 -
Net assets 569.2 608.2 598.5
Cash and short-term deposits (67.1) (131.2) (150.0)
Interest-bearing loans and borrowings 23.8 11.9 24.7
Pension deficit/(surplus) net of deferred tax 1.8 (9.6) 2.7
Capital employed 527.7 479.3 475.9
Average capital employed 494.2(1) 476.1(1) 478.4(2)
Return on capital employed 37.0% 36.9% 37.3%
(1) Defined as the average of the capital employed at June 2024, December 2024
and June 2025 (2024: June 2023, December 2023 and June 2024).
(2) Defined as the average of the capital employed at December 2023 and
December 2024.
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.
The prior period results are translated at the reporting period's average
exchange rates. Results from 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.
Key headings in the income statement are reconciled to OCC as follows:
First half Organic constant currency First half
2024 Foreign exchange £m 2025
£m £m Acquisitions £m
£m
Revenue 361.4 (10.0) 4.3 11.6 367.3
Cost of sales (187.5) 5.1 (3.0) 0.3 (185.1)
Gross profit 173.9 (4.9) 1.3 11.9 182.2
Overheads (97.4) 1.5 (0.9) (4.6) (101.4)
Adjusted operating profit 76.5 (3.4) 0.4 7.3 80.8
i. Cash conversion
Cash conversion is calculated as cash generated from operations (referred to
as '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 12.
First half 2025 First half 2024 Full year 2024
£m £m £m
Cash generated from operations (note 12) 71.9 81.3 212.7
Adjusted operating profit (note 2a) 80.8 76.5 178.4
Cash conversion 89% 106% 119%
j. Free cash flow
Free cash flow is after organic investment and is calculated as 'net cash
flows from operating activities', plus 'net cash flows from investing
activities' (excluding acquisitions/disposals of businesses), plus 'net cash
flows from financing activities' (excluding dividends paid on ordinary shares,
the share buyback programme, and proceeds from or repayments of borrowings).
Free cash flow provides an additional view of the available funds of the
Group. It is deemed useful to stakeholders as it represents cash flows that
could be used for dividends, share buybacks, repayments of borrowings or to
fund the Group's strategic initiatives, including any acquisitions.
The reconciliation of net (decrease)/increase in cash and cash equivalents to
free cash flow is as follows:
First half 2025 First half 2024 Full year 2024
£m £m £m
Net (decrease)/increase in cash and cash equivalents (74.2) (14.0) 6.4
Adjustments:
Dividends paid on ordinary shares 42.1 39.9 63.3
Share buyback programme 21.6 18.1 50.3
Acquisition of business - net of cash acquired 31.8 -- -
Net repayment of borrowings 8.0 - -
Free cash flow 29.3 44.0 120.0
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.
Half year to 30 June 2025
Oil & Gas Chemical, Process & Industrial Water & Power Corporate expenses Group
£m £m £m £m £m
Revenue from external customers 169.6 101.4 96.3 - 367.3
Segment result / Adjusted operating profit* 43.8 23.7 24.5 (11.2) 80.8
Adjusting items (16.1)
Operating profit 64.7
Net finance income 0.4
Income tax expense (16.5)
Profit for the period 48.6
Oil & Gas Chemical, Process & Industrial Water & Power Group
£m £m £m £m
Depreciation 3.6 1.7 1.8 7.1
Amortisation of development costs 0.6 0.3 0.3 1.2
Half year to 30 June 2024
Oil & Gas Chemical, Process & Industrial Water & Power Corporate expenses Group
£m £m £m £m £m
Revenue from external customers 170.2 100.9 90.3 - 361.4
Segment result / Adjusted operating profit* 38.8 23.7 24.3 (10.3) 76.5
Adjusting items (9.6)
Operating profit 66.9
Net finance income 2.8
Income tax expense (17.7)
Profit for the period 52.0
Oil & Gas Chemical, Process & Industrial Water & Power Group
£m £m £m £m
Depreciation 3.0 1.8 1.9 6.7
Amortisation of development costs 0.9 0.5 0.5 1.9
Full year to 31 December 2024
Oil & Gas Chemical, Process & Industrial Water & Power Corporate expenses Group
£m £m £m £m £m
Revenue from external customers 355.5 205.0 193.9 - 754.4
Segment result / Adjusted operating profit* 92.0 53.0 56.4 (23.0) 178.4
Adjusting items (42.5)
Operating profit 135.9
Net finance income 4.6
Income tax expense (35.7)
Profit for the year 104.8
*Adjusted operating profit is operating profit before adjusting items (see
note 5).
Oil & Gas Chemical, Process & Industrial Water & Power Group
£m £m £m £m
Depreciation 6.5 3.8 4.0 14.3
Amortisation of development costs 1.3 0.7 0.8 2.8
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.
First half First half Full year
2025 2024 2024
Revenue by end destination £m £m £m
UK 21.2 28.4 54.6
Other EMEA 122.9 112.0 233.9
Total EMEA 144.1 140.4 288.5
China 54.5 54.9 112.5
India 25.1 25.0 49.2
Other APAC 46.1 40.3 93.6
Total APAC 125.7 120.2 255.3
USA 66.8 69.1 143.5
Other Americas 30.7 31.7 67.1
Total Americas 97.5 100.8 210.6
367.3 361.4 754.4
4 ACQUISITIONS
Current period acquisitions
i) Noah
On 12 March 2025, the Group completed the acquisition of 100% of the share
capital of NOAH Actuation Co., Ltd. ('Noah') for a total purchase
consideration of £37.6m. Noah is headquartered in Seoul, South Korea and its
acquisition will expand the Group's electric actuator offering. It is fully
aligned to the Growth+ strategy and to key Target Segments. Initial
consideration of £35.6m was paid on completion, with a further deferred
consideration of £2.0m recognised, with future payment contingent on certain
performance conditions being met.
In the period to 30 June 2025 Noah contributed £4.3m to Group revenue and
£0.4m to consolidated adjusted operating profit. The amortisation charge in
the three-month period from the acquired intangible assets was £0.5m.
If the acquisition had occurred on 1 January 2025 the business would have
contributed £7.4m to Group revenue, £0.7m to Group adjusted operating profit
and £0.5m to adjusted profit attributable to equity shareholders.
ii) Acquisitions fair value table
The acquisition had the following effect on the Group's assets and liabilities
as at 30 June 2025.
£m Book value Adjustments Provisional fair value
Non-current assets
Intangible assets -- 14.4 14.4
Property, plant and equipment 10.7 - 10.7
Current assets
Inventories 3.2 - 3.2
Trade and other receivables 2.6 - 2.6
Cash and short-term deposits 3.8 - 3.8
Current liabilities
Trade and other payables (3.2) - (3.2)
Non-current liabilities
Employee benefits (1.0) - (1.0)
Interest-bearing loans and borrowings (8.0) - (8.0)
Deferred tax liabilities - (3.3) (3.3)
Total net assets at fair value 8.1 11.1 19.2
Goodwill arising on acquisition 18.4
Total consideration 37.6
Cash consideration 35.6
Contingent consideration 2.0
Total consideration 37.6
The total net cash outflow on current period acquisitions was as follows
Cash paid 35.6
Cash and cash equivalents acquired (3.8)
Total cash outflow 31.8
The adjustments shown in the table represent the alignment of accounting
policies of the acquired businesses to Rotork Group policies and the fair
value adjustments of the assets and liabilities at the acquisition date of the
business.
Due to their contractual dates, the fair value of receivables (shown above)
approximate to the gross contractual amounts receivable. The amount of gross
contractual receivables not expected to be recovered is immaterial.
The goodwill arising from this acquisition represents the opportunity to grow
through expanding the Group's electric actuator offering and employee
know-how.
The intangible assets identified comprise technology, customer relationships
and the Noah brand. The intangible assets have been valued by modelling the
discounted cashflows attributable to the respective asset. Discount rates
between 14% to 15% have been used. Assumptions regarding future cashflows are
based on a combination of historic performance data and management's
forecasts. The range of potential outcomes based on sensitives around
management's forecasts would not lead to any material differences to the
values recognised.
iii) Acquisition costs
Acquisition costs of £1.1m have been expensed in administration expenses in
the income statement during the period and disclosed as an adjusting item
under 'other costs' in note 5.
Prior period acquisitions
There were no acquisitions in the prior period.
5. 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:
First half First half Full year
2025 2024 2024
£m £m £m
Amortisation of acquired intangible assets (1.4) (1.3) (2.6)
Defined benefit scheme settlement loss - - (18.0)
Business Transformation costs (12.6) (7.6) (17.2)
Other costs (2.1) (0.7) (4.7)
Other adjustments (14.7) (8.3) (21.9)
Total adjusting items (16.1) (9.6) (42.5)
Business Transformation costs
During the period £12.6m (2024: £7.6m) 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 £74.7m. 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
£50.0m to £55.0m.
Other costs
Other costs have largely been incurred in relation to the acquisition of Noah
(note 4) and the relocation of the Shanghai (China) facility to Changshu
(China).
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 £18.0m was recognised in the income statement.
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 £14.0m (2024: £7.9m).
6. FINANCE INCOME AND EXPENSE
First half First half Full year
2025 2024 2024
£m £m £m
Interest income 1.2 2.2 4.4
Net interest income on pension scheme liabilities - 0.3 0.2
Foreign exchange gains 2.8 1.2 2.7
Finance income 4.0 3.7 7.3
First half First half Full year
2025 2024 2024
£m £m £m
Interest expense (0.2) (0.4) (1.4)
Interest expense on lease liabilities (0.4) (0.3) (0.8)
Net interest charge on pension scheme liabilities (0.1) - -
Foreign exchange losses (2.9) (0.2) (0.5)
Finance expense (3.6) (0.9) (2.7)
7. INCOME TAXES
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The estimated effective tax rate used for the year ending 31 December 2025 is
25.2% (2024 actual: 25.4%). The estimated adjusted effective tax rate for the
year ending 31 December 2025, based on the adjusted profit before tax, is
25.2% (2024 actual: 25.2%). The adjusted effective tax rate is consistent with
the prior year as there have been no major changes in the statutory tax rates
of the jurisdictions in which Rotork operates.
The Group continues to operate in many jurisdictions where local profits are
taxed at their national statutory rates. As a result, the Group income tax
charge will be subject to fluctuation depending on the actual profit mix. 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.
8. DIVIDENDS
First half First half Full year
2025 2024 2024
£m £m £m
The following dividends were paid in the period per
qualifying ordinary share:
5.00p final dividend for 2024 (final dividend for 2023: 4.65p) 42.1 39.9 39.9
2.75p interim dividend for 2024 - - 23.4
42.1 39.9 63.3
The following dividends per qualifying ordinary share were
declared/proposed after the balance sheet date:
5.00p final dividend for 2024 proposed - - 42.1
2.95p interim dividend for 2025 declared (2024: 2.75p) 24.7 23.5 -
24.7 23.5 42.1
9. EARNINGS PER SHARE
Earnings per share is calculated using the profit attributable to the ordinary
shareholders for the period and the weighted average number of ordinary shares
in issue (net of own ordinary shares held) for the period.
Diluted earnings per share is calculated using the profit attributable to the
ordinary shareholders for the period and the weighted average number of
ordinary shares in issue (net of own ordinary shares held) for the period
adjusted to assume conversion of all potentially dilutive ordinary shares.
First half First half Full year
2025 2024 2024
m m m
Weighted average number of shares for basic earnings per share 841.5 858.3 853.6
Dilutive effect of employee share options 4.3 3.5 3.4
Weighted average number of shares for diluted earnings per share 845.8 861.8 857.0
£m £m £m
Net profit attributable to ordinary shareholders 47.7 51.7 103.6
Adjusted net profit attributable to ordinary shareholders (note 2c) 59.8 58.9 135.6
Basic earnings per share 5.7p 6.0p 12.1p
Diluted earnings per share 5.6p 6.0p 12.1p
Adjusted basic earnings per share 7.1p 6.9p 15.9p
Adjusted diluted earnings per share 7.0p 6.8p 15.8p
10. INVENTORIES
30 June 30 June 31 Dec 2024
2025 2024 £m
£m £m
Raw materials and consumables 64.6 64.8 64.2
Work in progress 4.8 6.4 3.1
Finished goods 19.0 22.7 16.1
88.4 93.9 83.4
11. DEFINED BENEFIT PENSION SCHEMES
The defined benefit liability at 30 June 2025 of £2.4m (30 June 2024: £12.8m
asset; 31 December 2024: £3.6m liability) is estimated based on the latest
full actuarial valuations at 31 March 2022 for UK and US plans. The valuation
of the most significant plan, namely the Rotork Pension and Life Assurance
Scheme in the UK, has been updated at 30 June 2025 by independent actuaries to
reflect updated assumptions regarding discount rates, inflation rates and
asset values.
30 June 30 June 31 Dec 2024
2025 2024 %
% %
Discount rate 5.7 5.2 5.5
Rate of inflation 3.0 3.1 3.1
12. ADDITIONAL CASH FLOW INFORMATION
Note First half First half Full year
2025 2024 2024
£m £m £m
Profit for the year 48.6 52.0 104.8
Income tax expense 7 16.5 17.7 35.7
Finance income 6 (4.0) (3.7) (7.3)
Finance expense 6 3.6 0.9 2.7
Operating profit 64.7 66.9 135.9
Amortisation of acquired intangible assets 1.4 1.3 2.6
Defined benefit scheme settlement loss 5 - - 18.0
Other adjustments 5 14.7 8.3 21.9
Depreciation 7.1 6.7 14.3
Amortisation and impairment of development costs 1.2 1.9 3.6
Equity settled share-based payments 4.4 4.0 6.7
Loss/(profit) on sale of property, plant and equipment 0.1 (0.1) (0.1)
(Decrease)/increase in provisions (0.2) - 0.9
Cash generated from operations before working capital cash flows 93.4 89.0 203.8
Increase in inventories (4.5) (11.2) (1.4)
(Increase)/decrease in trade and other receivables (7.4) 9.5 (1.1)
(Decrease)/increase in trade and other payables (0.1) 3.5 12.0
Decrease in employee benefits (9.5) (9.5) (0.6)
Cash generated from operations 71.9 81.3 212.7
For the purposes of the condensed consolidated cash flow statement, cash and
cash equivalents comprise the following:
30 June 30 June 31 Dec
2025 2024 2024
£m £m £m
Cash and short-term deposits 67.1 131.2 150.0
Bank overdrafts (note 14) (0.7) - -
Cash and cash equivalents 66.4 131.2 150.0
Net cash comprises the following:
30 June 30 June 31 Dec
2025 2024 2024
£m £m £m
Cash and short-term deposits 67.1 131.2 150.0
Current interest-bearing loans and borrowings (note 14) (5.0) (3.5) (4.3)
Non-current interest-bearing loans and borrowings (note 14) (18.8) (8.4) (20.4)
Net cash 43.3 119.3 125.3
13. SHARE CAPITAL AND RESERVES
The number of ordinary 0.5p shares in issue at 30 June 2025 was 839,598,000
(30 June 2024: 855,823,000; 31 December 2024: 846,381,000). All issued shares
are fully paid.
Within the retained earnings are own shares held in Rotork's Employee Benefit
Trust. The Group acquired 139,000 of its own shares during the period (30 June
2024: 406,000; 31 December 2024: 3,129,000). The total amount paid to acquire
the shares was £0.4m (30 June 2024: £1.3m; 31 December 2024: £10.3m), and
this has been deducted from shareholders' equity. At 30 June 2025 the number
of shares held in trust for the benefit of directors and employees as required
to satisfy potential future maturities under share plans was 3,147,000 (30
June 2024: 1,027,000; 31 December 2024: 3,722,000). In the period 714,000
shares were released to satisfy share plan awards.
In respect of the share buyback programme, the Group bought back and cancelled
a total of 6,870,000 ordinary shares of 0.5p each for a total value of £21.6m
including costs of £0.1m during the period. The average price paid for these
repurchased shares was £3.13. Prior to the period end an additional buyback
of 648,000 ordinary shares was in process, but had not yet been fully
transacted by 30 June 2025.
In respect of the SAYE scheme, options exercised during the period to 30 June
2025 resulted in 86,000 ordinary 0.5p shares being issued (30 June 2024:
111,000 shares), with exercise proceeds of £0.1m (30 June 2024: £0.3m). The
weighted average market share price at the time of exercise was £3.22 (30
June 2024: £3.24) per share.
The share-based payment charge for the period was £4.4m (30 June 2024:
£4.0m; 31 December 2024: £6.7m).
14. ANALYSIS OF CHANGES IN NET CASH AND CHANGES IN LIABILITIES ARISING
FROM FINANCING ACTIVITIES
31 Dec 2024 Net acquired debt/cash Net lease additions/ disposals 30 June
£m Cash flow £m £m Exchange movement 2025
£m £m £m
Cash and short-term deposits 150.0 (77.3) 3.8 - (9.4) 67.1
Bank overdrafts - (0.7) - - - (0.7)
Cash and cash equivalents 150.0 (78.0) 3.8 - (9.4) 66.4
Bank loans - 8.0 (8.0) - - -
Lease liabilities (24.7) 2.1 - (1.0) 0.5 (23.1)
Net cash/(debt) 125.3 (67.9) (4.2) (1.0) (8.9) 43.3
At 30 June 2025 total lease liabilities consist of £4.3m (30 June 2024:
£3.5m and 31 December 2024: £4.3m) current and £18.8m (30 June 2024: £8.4m
and 31 December 2024: £20.4m) non-current.
At 30 June 2025 the committed revolving credit facility of £75.0m was
undrawn.
15. SHARE-BASED PAYMENTS
A grant of share awards was made on 31 March 2025 to selected participants at
the discretion of the Remuneration Committee. The key information and
assumptions from this grant were:
Equity-Settled
Relative TSR condition Adjusted EPS condition ROIC Emissions condition
condition
Grant date 31 March 2025 31 March 2025 31 March 2025 31 March 2025
Share price at grant date £3.13 £3.13 £3.13 £3.13
Shares granted under scheme 512,546 512,546 512,546 170,849
Vesting period 3 years 3 years 3 years 3 years
Expected volatility 23.0% N/A N/A N/A
Risk-free rate 4.0% N/A N/A N/A
Probability of ceasing employment before vesting 5% p.a. 5% p.a. 5% p.a. 5% p.a.
Fair value £1.81 £3.13 £3.13 £3.13
The basis of measuring fair value is consistent with that disclosed in the
2024 Annual Report & Accounts.
16. RELATED PARTIES
The Group has a related party relationship with its subsidiaries and with its
directors and key management. A list of subsidiaries is shown in the 2024
Annual Report and Accounts. Transactions between two subsidiaries for the sale
and purchase of products, or for management charges are priced on an arm's
length basis.
There were no significant changes in the nature and size of related party
transactions for the period to those reported in the 2024 Annual Report and
Accounts.
17. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURE
The Group held forward currency contracts designated as hedge instruments in
both cash flow and fair value hedging relationships. At 30 June 2025 the fair
value of these contracts was a net asset of £1.9m (30 June 2024: a net asset
of £1.0m; 31 December 2024: a net asset of £0.6m). The fair value was
determined using spot exchange rates at the reporting date, adjusted for
forward points to reflect the relevant settlement dates. Resulting gains and
losses were recognised in other comprehensive income, based on market foreign
exchange rates prevailing at the balance sheet date. All derivative financial
instruments are categorised as Level 2 of the fair value hierarchy. There was
no ineffectiveness to be recorded from the use of foreign exchange
contracts.
The other financial instruments, comprising trade and other
receivables/payables and contingent consideration, are classified as Level 3
in the fair value hierarchy and their carrying amount is deemed to reflect
their fair value. The Group had no derivative financial instruments in the
current or previous year with fair values that would be classified as Level 3
in the fair value hierarchy.
18. EXCHANGE RATES
The table below highlights the movements in a selection of exchange rates
between 2025 and 2024. Exchange rates to sterling have been as follows:
Average first half 2025 Average first half 2024 Average full year 2024 Closing 30 June 2025 Closing 30 June 2024 Closing 31 Dec 2024
US dollar 1.30 1.27 1.28 1.37 1.26 1.25
Euro 1.19 1.17 1.18 1.17 1.18 1.21
Chinese renminbi 9.42 9.13 9.20 9.83 9.19 9.13
Indian rupee 111.71 105.30 106.95 117.45 105.48 107.49
Shareholder information
The interim report and half year results presentation are available on the
Rotork website at:
www.rotork.com (http://www.rotork.com)
General shareholder contact numbers:
Shareholder General Enquiry Number (UK): 0371 384 2280
International Shareholders - General Enquiries (from
overseas): (00) 44 371 384 2280
For enquiries regarding the Dividend Reinvestment Plan (DRIP) contact:
The Share Dividend Team
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Tel: 0371 384 2280
Group information
Secretary and registered office:
Stuart Pain
Rotork plc
Rotork House
Brassmill Lane
Bath
BA1 3JQ
Company number:
00578327
Company website:
www.rotork.com (http://www.rotork.com)
Investors section:
http://www.rotork.com/en/investors/ (http://www.rotork.com/en/investors/)
Disclaimer:
Certain information included in this announcement is forward looking and
involves risks, assumptions and uncertainties that could cause actual results
to differ materially from those expressed or implied by forward looking
statements. All statements other than statements of historical fact included
in this announcement, including, without limitation, those regarding the
Company's financial position, business strategy, plans (including development
plans and objectives relating to the Company's products and services), future
revenues and profits, the direct and indirect impacts and implications of
external events on the economy, nationally and internationally, and on the
Rotork Group, its operations and prospects, including disruptions and
inefficiencies in the supply chain; UK domestic and global political, economic
and business conditions and objectives of management for future operations,
and prices and changes in exchange and interest rates are forward-looking
statements.
These statements contain the use of forward-looking terminology such as the
words "anticipate", "believe", "intend", "estimate", "expect", "forecasts",
"intends", "plans", "projects", "goal", "target", "aim", "may", "will",
"would", "could" or "should" or, in each case, their negative or other
variations or words of similar meaning. Past business, financial and share
performance cannot be relied on as an indication of, and forward-looking
statements in this announcement are not guarantees of, future performance.
Such forward-looking statements involve known and unknown risks, uncertainties
and other important factors that could cause the actual results, performance
or achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based upon information known
to the Company's directors on the date of this announcement and on numerous
assumptions regarding the Company's present and future business strategies and
the environment in which the Company will operate in the future. Accordingly,
no assurance can be given that any particular expectation will be met and
readers are cautioned not to place undue reliance on forward looking
statements when making their investment decisions. Other than in accordance
with its legal or regulatory obligations (including under the UK Listing Rules
and the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), the Company expressly disclaims any obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events, a change in expectations or otherwise. Nothing in
this announcement shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws. Nothing in this announcement
should be construed as a profit forecast.
This announcement does not constitute an offer to sell or an invitation to buy
securities in the Company or an invitation or inducement to engage in or enter
into any contract or commitment or other investment activity.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PIMPTMTMMBTARecent news on Rotork
See all newsREG - Rotork PLC - Transaction in Own Shares
AnnouncementREG - Rotork PLC - Transaction in Own Shares
AnnouncementREG - Rotork PLC - Transaction in Own Shares
AnnouncementREG - Rotork PLC - Transaction in Own Shares
AnnouncementREG - Rotork PLC - Total Voting Rights
Announcement