Rotork PLC

Latest Results (29.10.2026):

Rotork PLC — H1 2026 (six months to 30 June 2026, Q2 2026 interim results): a resilient first half with revenue broadly flat at £367.2m, order intake of £371.8m (‑4.0% OCC), adjusted operating profit of £82.2m and adjusted operating margin of 22.4% (OCC +60bps). Reported operating profit and EPS improved materially, the Group completed a £40m buyback, declared a 3.00p interim dividend, and agreed a recommended ABB cash acquisition at 506p per share (expected H1 2027 subject to approvals).

Key financials

Revenue £367.2m (flat vs H1 2025; OCC +1.3%). Order intake £371.8m (‑4.9% reported; ‑4.0% OCC). Adjusted operating profit £82.2m (+1.7% reported; +4.1% OCC). Adjusted operating margin 22.4% (OCC +60bps). Adjusted basic EPS 7.4p (up 4.2%); reported basic EPS 6.7p (up 17.5%).

Profitability & returns

Adjusted operating margin expansion driven by operating leverage, cost discipline and mix. ROCE remained very strong at 36.5% (H1 2025: 37.0%), reflecting the asset‑light model and high margins.

Divisional performance

CPI: Revenue £114.2m, OCC +16.0%, adjusted OP £28.3m, margin 24.7% (best performer). Water & Power: Revenue £99.3m, OCC +3.4%, adjusted OP £27.9m, margin 28.1%. Oil & Gas: Revenue £153.7m, OCC ‑8.4%, adjusted OP £37.1m, margin 24.2%; impacted by Middle East disruption and capex discipline.

Cash, balance sheet & cash flow

Cash generated from operations £64.8m; cash conversion 79% (H1 2025: 89%). Free cash flow £22.4m. Net cash at period end £25.3m (cash & equivalents £70.0m, RCF drawn £22.0m). Net working capital increased (inventory +£15.9m; DSO 67 days).

Capital allocation & shareholder returns

Completed £40m of share buybacks in H1 (part of larger programme), paid dividends of £43.7m, interim dividend declared 3.00p (up 1.7%). The Group retains a £75m RCF (extended to 2029) and says it remains highly cash‑generative.

Adjusting items & disposals

Reported results include Business Transformation costs £15.0m, amortisation of acquired intangibles £1.6m and a £6.9m gain on disposal of two non‑core subsidiaries (disposal cash inflow £19.8m). These adjustments reconcile statutory to adjusted measures.

Proposed acquisition

The Board has agreed a recommended cash acquisition by ABB at 506p per share (503p cash + 3p interim dividend). The transaction is expected to complete in H1 2027, subject to shareholder, court and regulatory approvals.

Outlook

Rotork reiterates its 2026 OCC outlook: further progress expected. Water & Power momentum should support H2, Oil & Gas recovery is expected to be more gradual (full‑year revenue slightly lower), and stronger CPI growth is anticipated. The company targets mid‑ to high‑single digit revenue growth and adjusted operating margins in the mid‑twenties over time.

Safety & other notes

Safety metrics improved (Lost Time Injury Rate 0.06 vs 0.12 in H1 2025). Management highlights Growth+ strategic progress (Target Segments, Customer Value, Innovative Products & Services) and continues to monitor geopolitical, supply chain and transaction risks.