TIDMROR
RNS Number : 7996W
Rotork PLC
04 August 2009
Rotork p.l.c.
2009 Half Year Results
Financial Highlights
+------------------------------+-----------+-----------+----------+------------+
| | HY | HY |% change | % change |
| | 2009 | 2008 | | (constant |
| | | | | currency) |
+------------------------------+-----------+-----------+----------+------------+
| Revenue | GBP179.5m | GBP143.5m | +25.1% | +5.9% |
+------------------------------+-----------+-----------+----------+------------+
| Operating profit | GBP44.9m | GBP32.9m | +36.3% | +6.5% |
+------------------------------+-----------+-----------+----------+------------+
| Profit before tax | GBP44.4m | GBP33.3m | +33.6% | +5.3% |
+------------------------------+-----------+-----------+----------+------------+
| Adjusted* profit before tax | GBP44.3m | GBP34.0m | +30.2% | +2.6% |
+------------------------------+-----------+-----------+----------+------------+
| Basic Earnings per share | 36.1p | 26.7 p | +35.2% | |
+------------------------------+-----------+-----------+----------+------------+
| Adjusted* Basic Earnings per | 35.9p | 27.6 p | +30.1% | |
| share | | | | |
+------------------------------+-----------+-----------+----------+------------+
| Interim dividend | 11.15p | 9.25p | +20.5% | |
+------------------------------+-----------+-----------+----------+------------+
* = Adjusted figures before the amortisation of acquired intangible assets and
profit on disposal of property
Key Points
* Revenue and profit at record levels
* Order book up 2.7% year on year to GBP138.7m
* Rotork Controls revenue up 26.6%, order book up 11.7%
* Rotork Fluid Systems revenue up 24.4%, operating margin up to 13.8%
* Strong balance sheet at the Half Year, with net cash of GBP52.4m
Peter France, Chief Executive, commenting on the results, said:
"The markets that we serve remain challenging and project delays are affecting
the timing of order placements. We expect the current market conditions to
continue in the second half of the year, although quotation activity and project
visibility remain positive.
The current weakness of sterling continues to benefit the group's competitive
position and reported trading results.
Our existing order book, low cost base and international presence provide a
solid platform and give us confidence in meeting market expectations for the
current year."
For further information, please contact:
+------------------------------------+------------------------------------+
| Rotork p.l.c. | Tel: 01225 733200 |
+------------------------------------+------------------------------------+
| Peter France, Chief Executive | |
+------------------------------------+------------------------------------+
| Bob Slater, Finance Director | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Financial Dynamics | Tel: 020 7269 7291 |
+------------------------------------+------------------------------------+
| Sophie Kernon / Jon Simmons | |
+------------------------------------+------------------------------------+
Review of operations
Business review
We are pleased to report first half revenue and profit at record levels. Revenue
at GBP179.5m is 25.1% up on the first half of 2008 and profit before tax is up
33.6% to GBP44.4m. As anticipated we have seen a slowing of order intake in the
second quarter following a strong start to the year. Overall order intake in the
first six months of 2009 is 1.6% down on the comparative period but our order
book remains at a seasonally high level, GBP138.7m, slightly above that at June
2008.
The majority of our offices have experienced the effects of project delays.
However, as we enter the third quarter there are signs that stimulus funding is
encouraging project activity. The number of quotations is significantly up on
levels seen one year ago and the second quarter represents an all time high in
terms of actuators quoted and number of quotes prepared. This increase in
quotation activity is supported by an increase in the number of projects at the
Front End Engineering and Design (FEED) stage although there is presently a
longer lead time from this activity to firm orders being received. To position
ourselves for the future and recognising the economic outlook we have instigated
cost reduction programmes in a number of locations whilst cautiously expanding
in areas of opportunity.
Financial results
Revenue and profit were significantly up on 2008 supported by the positive
currency environment. Net operating margin increased by 2.1 percentage points to
25.0%. At constant currency, revenue increased by 5.9%, and operating profit by
6.5%. The currency environment continues to help our competitive position
internationally, however in the second half of the year we do not anticipate the
magnitude of translation and transaction gains that we saw in the first half.
Cash flow has continued to be strong in the period and cash balances now stand
at GBP52.4m, after paying the final dividend of GBP14.5m in May. We anticipate
strong cash generation in the second half despite the general lengthening of
payment terms. Working capital has reduced since the year end although currency
has played a major part in some areas.
Operating review
Rotork Controls
This is our largest divisional business making up 62.4% of group revenue. The
division covers a wide range of industries mainly focussed on infrastructure
development around the world. Sales revenue increased by 26.6% and the order
book is 11.7% higher than at the same point last year. Progress continues to be
made with regard to operating margin and this has increased by 2.3 percentage
points to 30.7%.
Although the results have been affected by project delays we have continued to
maintain momentum in the developing markets and have increased our market share.
The slow down has been particularly felt by Rotork Process Control. We have
experienced a significant reduction in input during the period, and have taken
action on the cost base as a result of this. The Control Valve Actuator (CVA)
has only just been launched and this business will not see the benefits of this
product for at least another year. The core electric actuator business, however,
continues to hold a market leading position and order intake here was up over 8%
on the first half of 2008.
Sales revenue from the Americas was good with both our US and Canadian
operations showing improved revenues and profit. All of our Asian companies saw
revenues increase, with China being particularly strong. In Europe we had
excellent results from both Italy and Spain, where we are making good progress,
and from actively promoting our Rotork Site Services business in a number of
areas.
The difficulties related to the timing of projects remain but the visibility of
projects is strong. We are seeing more activity in the USA and China due to
stimulus funding becoming available and projects are being reactivated. We
expect this to benefit order input in the second half.
Product development has been focused on completing the CVA range and on product
initiatives such as the wireless Pakscan offering, upgrading the RPC product
portfolio and continued value engineering of the product range.
Rotork Fluid Systems
Sales revenue was strong in the period at GBP49.3m, up 24.4% on the prior year
comparative number. Operating profit was GBP6.8m, up 45.3% year on year. The
operating margin increased by 2 percentage points to 13.8%. Shipments have
outpaced input resulting in a reduced order book compared with the half year
2008, nevertheless the order book remains at a seasonally high level.
Business in the US and Canada has been very active in the period with sales
revenue showing significant growth and this has been helped by the more
favourable currency environment.
The Spanish business has increased its market penetration and showed significant
sales growth in the period. Other European businesses have also done well, with
the German production facility making good progress. Asia is an important market
for the division and although we have been making advancements there over the
past few years there still remain opportunities for growth.
The Lucca plant completed its reorganisation following the increase of footprint
after leasing additional space last year. The production difficulties that we
had in Italy last year due to space constraints are now behind us and the
expansion has helped create a world class facility able to support market growth
for many years to come.
This division is heavily exposed to the oil and gas markets around the world and
there has been a slowing of order intake as major projects have been reviewed by
customers, causing delays in the release of these projects. Order input was down
on the comparative period by 11.9%. The positive announcements on capital
spending programmes by the oil majors and NOCs, the number of projects being
tracked by our sales force and the number of active quotations all support the
view that the second half should see an increase in order input.
Within the industry the division is regarded as a strong, technically able
supplier which is bringing real innovation, a wide product range and consistent
and reliable customer support in a conservative market segment. Our centres of
excellence are achieving their targets in terms of customer support and
exposure, and we are increasing our focus on the opportunities presented by our
Rotork Site Services offering and see this as an important pillar of our future
structure.
Rotork Gears
The Gears division saw good shipment levels during the period although as the
business with the shortest lead times and smallest order book in the group, we
are here most exposed to short term slowing in order intake. Sales revenue was
GBP20.1m in the period, a year on year increase of nearly 17%. Order intake was
down year on year by 4.5% reflecting lower valvemaker activity across the
businesses.
Operating profit for the period was up 9.1%, lower than the increase in sales
revenue, reflecting in the main a number of vendor cost issues impacted in part
by the strengthening of the Chinese currency over the last year or so. This
affects a number of our assembly plants. We are currently working to bring the
cost base back into balance and have made progress in this recently and are
continuing to look at improved supply sources.
The Leeds and Shanghai plants saw good increases in output in the period
particularly in relation to the motorised valve market. The commodity end of
this division's business experienced some reduction due to lower activity levels
and the plant in Losser saw shipments fall 3% over last year's levels. The
Italian plant had a good rate of increase in orders going through production,
but is suffering cost pressures due to predominantly European sourcing.
We continue to develop new customer opportunities and the period saw good levels
of growth from domestic Chinese valve manufacturers.
Principal risks and uncertainties
The group has an established risk management process which works within the
corporate governance framework set out in the 2008 Annual Report & Accounts. We
regularly review the principal risks and uncertainties facing our businesses and
examine the potential impacts on our processes and procedures. The risk
management process is described in detail on page 24 of the 2008 Annual Report &
Accounts. We identify risks in the form of strategic, financial and operational
risks and set out improvements to our processes and procedures as necessary to
adapt to these. There have been no changes to the principle risks and
uncertainties identified in the 2008 Annual Report & Accounts.
Dividend
The interim dividend is to be increased by 20.5% to 11.15 p per ordinary share
and will be paid on 25 September 2009 to all shareholders on the register at the
close of business on 4 September 2009. The 2008 final dividend was paid on 8 May
(16.75 p per ordinary share at a cash cost of GBP14.5 m).
Outlook
The markets that we serve remain challenging and project delays are affecting
the timing of order placements. We expect the current market conditions to
continue in the second half of the year, although quotation activity and project
visibility remain positive.
The current weakness of sterling continues to benefit the group's competitive
position and reported trading results.
Our existing order book, low cost base and international presence provide a
solid platform and give us confidence in meeting market expectations for the
current year.
+---------------------------------------+-------+----------+----------+-----------+
| Consolidated Income Statement | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Unaudited | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| | | First | First | Full |
| | | half | half | year |
+---------------------------------------+-------+----------+----------+-----------+
| | | 2009 | 2008 | 2008 |
+---------------------------------------+-------+----------+----------+-----------+
| |Notes | GBP000 | GBP000 | GBP000 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Revenue | 2 | 179,502 | 143,493 | 320,207 |
+---------------------------------------+-------+----------+----------+-----------+
| Cost of sales | | (98,299) | (78,108) | (176,046) |
+---------------------------------------+-------+----------+----------+-----------+
| Gross profit | | 81,203 | 65,385 | 144,161 |
+---------------------------------------+-------+----------+----------+-----------+
| Other income | | 624 | 32 | 42 |
+---------------------------------------+-------+----------+----------+-----------+
| Distribution costs | | (1,631) | (1,561) | (3,535) |
+---------------------------------------+-------+----------+----------+-----------+
| Administrative expenses | | (35,317) | (30,950) | (65,697) |
+---------------------------------------+-------+----------+----------+-----------+
| Other expenses | | (24) | (4) | (82) |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Operating profit before the | | 44,688 | 33,627 | 76,014 |
| amortisation of acquired intangible | | | | |
| assets and profit on disposal of | | | | |
| property | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Profit on disposal of property | | 587 | - | - |
+---------------------------------------+-------+----------+----------+-----------+
| Amortisation of acquired intangible | | (420) | (725) | (1,125) |
| assets | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Operating profit | 2 | 44,855 | 32,902 | 74,889 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Financial income | 3 | 3,054 | 3,410 | 7,073 |
+---------------------------------------+-------+----------+----------+-----------+
| Financial expenses | 3 | (3,465) | (3,037) | (6,211) |
+---------------------------------------+-------+----------+----------+-----------+
| | | (411) | 373 | 862 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Profit before tax | | 44,444 | 33,275 | 75,751 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Income tax expense | 11 | | | |
+---------------------------------------+-------+----------+----------+-----------+
| UK | | (2,974) | (3,325) | (6,425) |
+---------------------------------------+-------+----------+----------+-----------+
| Overseas | | (10,359) | (6,923) | (15,906) |
+---------------------------------------+-------+----------+----------+-----------+
| | | (13,333) | (10,248) | (22,331) |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Profit for the period | | 31,111 | 23,027 | 53,420 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| | | pence | pence | pence |
+---------------------------------------+-------+----------+----------+-----------+
| Basic earnings per share | 5 | 36.1 | 26.7 | 62.0 |
+---------------------------------------+-------+----------+----------+-----------+
| Diluted earnings per share | 5 | 35.9 | 26.6 | 61.6 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Consolidated Statement of Comprehensive Income and Expense |
+---------------------------------------------------------------------------------+
| Unaudited |
+---------------------------------------------------------------------------------+
| | | First | First | Full |
| | | half | half | year |
| | | 2009 | 2008 | 2008 |
| | | GBP000 | GBP000 | GBP000 |
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Profit for the period | | 31,111 | 23,027 | 53,420 |
+---------------------------------------+-------+----------+----------+-----------+
| | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Other comprehensive income and | | | | |
| expense | | | | |
+---------------------------------------+-------+----------+----------+-----------+
| Foreign exchange translation differences | (19,645) | 3,132 | 23,824 |
+-----------------------------------------------+----------+----------+-----------+
| Actuarial loss in pension scheme | | - | - | 1,290 |
+---------------------------------------+-------+----------+----------+-----------+
| Movement on deferred tax relating to | - | - | (161) |
| actuarial loss | | | |
+-----------------------------------------------+----------+----------+-----------+
| Effective portion of changes in fair value of | 5,237 | (27) | (4,719) |
| cash flow hedges | | | |
+-----------------------------------------------+----------+----------+-----------+
| | (14,408) | 3,105 | 20,234 |
+-----------------------------------------------+----------+----------+-----------+
| Total comprehensive income for the period | 16,703 | 26,132 | 73,654 |
+---------------------------------------+-------+----------+----------+-----------+
+---------------------------------------+-------+----------+----------+----------+
| |
| |
| Consolidated Balance Sheet |
+--------------------------------------------------------------------------------+
| Unaudited | | | | |
+---------------------------------------+-------+----------+----------+----------+
| |Notes | 30 June | 30 June | 31 Dec |
+---------------------------------------+-------+----------+----------+----------+
| | | 2009 | 2008 | 2008 |
+---------------------------------------+-------+----------+----------+----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Property, plant and equipment | | 21,691 | 20,136 | 23,868 |
+---------------------------------------+-------+----------+----------+----------+
| Intangible assets | | 35,904 | 34,754 | 39,696 |
+---------------------------------------+-------+----------+----------+----------+
| Deferred tax assets | | 7,353 | 4,953 | 10,925 |
+---------------------------------------+-------+----------+----------+----------+
| Other receivables | | 1,172 | 1,242 | 1,137 |
+---------------------------------------+-------+----------+----------+----------+
| Total non-current assets | | 66,120 | 61,085 | 75,626 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Inventories | 6 | 50,496 | 49,472 | 59,410 |
+---------------------------------------+-------+----------+----------+----------+
| Trade receivables | | 59,285 | 53,228 | 63,694 |
+---------------------------------------+-------+----------+----------+----------+
| Current tax | | 1,912 | 1,448 | 1,752 |
+---------------------------------------+-------+----------+----------+----------+
| Other receivables | | 6,269 | 7,199 | 5,578 |
+---------------------------------------+-------+----------+----------+----------+
| Derivative Financial Instruments | | 1,048 | - | - |
+---------------------------------------+-------+----------+----------+----------+
| Cash and cash equivalents | | 52,444 | 26,042 | 41,390 |
+---------------------------------------+-------+----------+----------+----------+
| Total current assets | | 171,454 | 137,389 | 171,824 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Total assets | | 237,574 | 198,474 | 247,450 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Issued equity capital | 7 | 4,326 | 4,325 | 4,325 |
+---------------------------------------+-------+----------+----------+----------+
| Share premium | | 6,687 | 6,608 | 6,666 |
+---------------------------------------+-------+----------+----------+----------+
| Reserves | | 6,880 | 5,285 | 21,288 |
+---------------------------------------+-------+----------+----------+----------+
| Retained earnings | | 129,614 | 99,882 | 112,117 |
+---------------------------------------+-------+----------+----------+----------+
| Total equity | | 147,507 | 116,100 | 144,396 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Interest-bearing loans and borrowings | | 223 | 205 | 190 |
+---------------------------------------+-------+----------+----------+----------+
| Employee benefits | | 9,313 | 10,249 | 8,637 |
+---------------------------------------+-------+----------+----------+----------+
| Deferred tax liabilities | | 2,115 | 837 | 2,806 |
+---------------------------------------+-------+----------+----------+----------+
| Derivative Financial Instruments | | - | - | 1,686 |
+---------------------------------------+-------+----------+----------+----------+
| Provisions | | 1,679 | 1,285 | 1,660 |
+---------------------------------------+-------+----------+----------+----------+
| Total non-current liabilities | | 13,330 | 12,576 | 14,979 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Interest-bearing loans and borrowings | | 103 | 112 | 157 |
+---------------------------------------+-------+----------+----------+----------+
| Trade payables | | 28,552 | 30,668 | 32,803 |
+---------------------------------------+-------+----------+----------+----------+
| Employee benefits | | 4,556 | 3,504 | 7,001 |
+---------------------------------------+-------+----------+----------+----------+
| Current tax | | 12,309 | 11,903 | 12,197 |
+---------------------------------------+-------+----------+----------+----------+
| Derivative Financial Instruments | | 1,207 | - | 5,624 |
+---------------------------------------+-------+----------+----------+----------+
| Other payables | | 26,481 | 20,694 | 26,781 |
+---------------------------------------+-------+----------+----------+----------+
| Provisions | | 3,529 | 2,917 | 3,512 |
+---------------------------------------+-------+----------+----------+----------+
| Total current liabilities | | 76,737 | 69,798 | 88,075 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Total liabilities | | 90,067 | 82,374 | 103,054 |
+---------------------------------------+-------+----------+----------+----------+
| | | | | |
+---------------------------------------+-------+----------+----------+----------+
| Total equity and liabilities | | 237,574 | 198,474 | 247,450 |
+---------------------------------------+-------+----------+----------+----------+
Consolidated Statement of Changes in Equity
Unaudited
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| | Share | Share | Translation | Capital | Hedging | Retained | Total |
| | Capital | premium | reserve | redemption | reserve | earnings | |
| | | | | reserve | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 1 January | 4,323 | 6,519 | 1,085 | 1,639 | (544) | 89,430 | 102,452 |
| 2008 | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Profit for the period | - | - | - | - | - | 23,027 | 23,027 |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Other comprehensive | - | - | 3,132 | - | (27) | - | 3,105 |
| income and expense | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Equity settled | - | - | - | - | - | (2,286) | (2,286) |
| transactions net | | | | | | | |
| of tax | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Share options | 2 | 89 | - | - | - | - | 91 |
| exercised by employees | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | (2,261) | (2,261) |
| acquired | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | 4,047 | 4,047 |
| awarded under share | | | | | | | |
| schemes | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Dividends to | - | - | - | - | - | (12,075) | (12,075) |
| shareholders | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 30 June | 4,325 | 6,608 | 4,217 | 1,639 | (571) | 99,882 | 116,100 |
| 2008 | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Profit for the period | - | - | - | - | - | 30,393 | 30,393 |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Other comprehensive | - | - | 20,692 | - | (4,692) | 1,129 | 17,129 |
| income and expense | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Equity settled | - | - | - | - | - | (133) | (133) |
| transactions net | | | | | | | |
| of tax | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Share options | - | 58 | - | - | - | - | 58 |
| exercised by employees | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | (1,257) | (1,257) |
| acquired | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | 3 | 3 |
| awarded under the | | | | | | | |
| share schemes | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Preference shares | - | - | - | 3 | - | (5) | (2) |
| redeemed | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Dividends to | - | - | - | - | - | (17,895) | (17,895) |
| shareholders | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 31 December | 4,325 | 6,666 | 24,909 | 1,642 | (5,263) | 112,117 | 144,396 |
| 2008 | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Profit for the period | - | - | - | - | - | 31,111 | 31,111 |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Other comprehensive | - | - | (19,645) | - | 5,237 | - | (14,408) |
| income and expense | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Equity settled | - | - | - | - | - | (1,141) | (1,141) |
| transactions net | | | | | | | |
| of tax | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Share options | 1 | 21 | - | - | - | - | 22 |
| exercised by employees | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | (1,300) | (1,300) |
| acquired | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | 3,297 | 3,297 |
| awarded under share | | | | | | | |
| schemes | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Dividends to | - | - | - | - | - | (14,470) | (14,470) |
| shareholders | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 30 June | 4,326 | 6,687 | 5,264 | 1,642 | (26) | 129,614 | 147,507 |
| 2009 | | | | | | | |
+------------------------+---------+---------+-------------+------------+---------+----------+----------+
+----------------------------------------------+----------+----------+----------+
| Consolidated Statement of Cash Flows | | | |
+----------------------------------------------+----------+----------+----------+
| Unaudited | | | |
+----------------------------------------------+----------+----------+----------+
| | First | First | Full |
| | half | half | year |
+----------------------------------------------+----------+----------+----------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Profit for the period | 31,111 | 23,027 | 53,420 |
+----------------------------------------------+----------+----------+----------+
| Amortisation of acquired intangibles | 420 | 725 | 1,125 |
+----------------------------------------------+----------+----------+----------+
| Amortisation of development costs | 201 | 176 | 352 |
+----------------------------------------------+----------+----------+----------+
| Depreciation | 1,611 | 1,685 | 3,281 |
+----------------------------------------------+----------+----------+----------+
| Equity settled share based payment expense | 390 | 380 | 718 |
+----------------------------------------------+----------+----------+----------+
| (Profit) / loss on sale of property, plant | (600) | (46) | 25 |
| and equipment | | | |
+----------------------------------------------+----------+----------+----------+
| Financial income | (3,054) | (3,410) | (7,073) |
+----------------------------------------------+----------+----------+----------+
| Financial expenses | 3,465 | 3,037 | 6,211 |
+----------------------------------------------+----------+----------+----------+
| Income tax expense | 13,333 | 10,248 | 22,331 |
+----------------------------------------------+----------+----------+----------+
| | 46,877 | 35,822 | 80,390 |
+----------------------------------------------+----------+----------+----------+
| Decrease / (increase) in inventories | 2,777 | (9,253) | (8,621) |
+----------------------------------------------+----------+----------+----------+
| Increase in trade and other receivables | (2,621) | (7,355) | (4,293) |
+----------------------------------------------+----------+----------+----------+
| (Decrease) / increase in trade and other | (1,019) | 6,371 | 5,955 |
| payables | | | |
+----------------------------------------------+----------+----------+----------+
| Difference between pension charge and cash | (369) | (771) | (823) |
| contribution | | | |
+----------------------------------------------+----------+----------+----------+
| Increase in provisions | 559 | 634 | 1,554 |
+----------------------------------------------+----------+----------+----------+
| (Decrease) in employee benefits | (2,695) | (1,378) | (299) |
+----------------------------------------------+----------+----------+----------+
| | 43,509 | 24,070 | 73,863 |
+----------------------------------------------+----------+----------+----------+
| Income taxes paid | (11,852) | (7,054) | (22,547) |
+----------------------------------------------+----------+----------+----------+
| Cash flows from operating activities | 31,657 | 17,016 | 51,316 |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Purchase of property, plant and equipment | (1,835) | (2,172) | (4,353) |
+----------------------------------------------+----------+----------+----------+
| Purchase of intangible fixed assets | - | (386) | (666) |
+----------------------------------------------+----------+----------+----------+
| Development costs capitalised | (398) | (337) | (817) |
+----------------------------------------------+----------+----------+----------+
| Sale of property, plant and equipment | 908 | 64 | 90 |
+----------------------------------------------+----------+----------+----------+
| Acquisition of subsidiary net of cash | - | (12,714) | (12,714) |
| acquired | | | |
+----------------------------------------------+----------+----------+----------+
| Interest received | 109 | 382 | 564 |
+----------------------------------------------+----------+----------+----------+
| Cash flows from investing activities | (1,216) | (15,163) | (17,896) |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Issue of ordinary share capital | 22 | 91 | 149 |
+----------------------------------------------+----------+----------+----------+
| Purchase of ordinary share capital | (1,300) | (2,261) | (3,518) |
+----------------------------------------------+----------+----------+----------+
| Purchase of preference shares treated as | - | - | (5) |
| debt | | | |
+----------------------------------------------+----------+----------+----------+
| Interest paid | (76) | (98) | (294) |
+----------------------------------------------+----------+----------+----------+
| Repayment of amounts borrowed | (12) | (65) | (82) |
+----------------------------------------------+----------+----------+----------+
| Repayment of finance lease liabilities | (56) | (59) | (87) |
+----------------------------------------------+----------+----------+----------+
| Dividends paid on ordinary shares | (14,470) | (12,075) | (29,970) |
+----------------------------------------------+----------+----------+----------+
| Cash flows from financing activities | (15,892) | (14,467) | (33,807) |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Net increase / (decrease) in cash and cash | 14,549 | (12,614) | (387) |
| equivalents | | | |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Cash and cash equivalents at 1 January | 41,390 | 38,253 | 38,253 |
+----------------------------------------------+----------+----------+----------+
| Effect of exchange rate fluctuations on cash | (3,495) | 403 | 3,524 |
| held | | | |
+----------------------------------------------+----------+----------+----------+
| Cash and cash equivalents at end of period | 52,444 | 26,042 | 41,390 |
+----------------------------------------------+----------+----------+----------+
Notes to the Half Year Report
1. Status of condensed consolidated interim statements, accounting policies and
basis of significant estimates
General information
Rotork p.l.c. is a company domiciled in England.
The company has its primary listing on the London Stock Exchange.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 3 August 2009.
The interim financial statements for the 6 months ended 30 June 2009 and 30 June
2008 are unaudited and the auditors have not 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'. These interim financial statements do not comprise statutory accounts
within the meaning of Section 240 of the Companies Act 1985, statutory accounts
for the year ended 31 December 2008 were approved by the Board on 2 March 2009
and delivered to the Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 237 of the Companies
Act 1985.
The consolidated financial statements of the Group for the year ended 31
December 2008 are available from the Company's registered office or website -
see note 13.
Basis of preparation
The condensed consolidated interim financial statements of the Company for the
six months ended 30 June 2009 comprise 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 International Accounting Standard 34, 'Interim Financial
Reporting' as adopted by the European Union. 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 2008, which have been prepared in accordance with IFRSs as
adopted by the European Union.
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 2008.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year ending 31 December 2009:
* IAS1 (revised), 'Presentation of financial statements' has become effective from
1 January 2009. The revision has resulted in minor changes to the presentation
of the primary statements.
* IFRS 8, 'Operating segments', effective for annual periods beginning on or after
1 January 2009. Management does not expect this standard to alter the disclosure
of the segmental results of the Group as set out in the 2008 annual report.
* IAS23 'Borrowing costs' amendment is effective from 1 January 2009 and requires
borrowing costs which meet certain criteria to be capitalised. Management do not
expect the amendment to have any impact on the Group.
* Amendments to IAS32, 'Presentation', IAS39, 'Financial instruments' (November
2008) and IFRS2, 'Share-based payment' are not expected to have a material
impact on the Group.
* IFRIC13, 'Customer loyalty programmes' and IFRIC 16, 'Hedges of a net investment
in a foreign operation' are not expected to have a material impact on the Group.
Recent accounting developments
The following standards, amendments and interpretations have been issued by the
International Accounting Standards Board or by the IFRIC but have not yet been
adopted. Subject to endorsement by the European Union, these will be adopted in
future periods. Revisions to IFRS 3 and IAS 27 have been endorsed, and the other
standards, amendments and interpretations are being considered for endorsement.
* IFRS 3 'Business combinations' (revised)
* IAS 27 'Consolidated and separate financial statements' (revised)
* Amendment to IFRS7 'Financial instruments: Disclosures' (March 2009)
* Amendments to IAS39 'Financial Instruments: Recognition and measurement (July
and November 2008)
* IFRIC 15, 'Agreements for the construction of real estate'
* IFRIC 17 'Distributions of non-cash assets to Owners'
* IFRIC 18 'Transfers of Assets from Customers'
2. Analysis of revenue, operating profit and net assets
+----------------------+---------+---------+---------+---------+---------+---------+
| | First | First | Full | First | First | Full |
| | half | half | year | half | half | year |
| | 2009 | 2008 | 2008 | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------+---------+---------+---------+---------+---------+---------+
+----------------------+---------+---------+---------+---------+---------+---------+
| | Revenue | Operating profit |
+----------------------+-----------------------------+-----------------------------+
| Analysis by | | | | | | |
| operation | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+
| Controls | 115,338 | 91,087 | 204,510 | 35,422 | 25,847 | 57,466 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Fluid Systems | 49,347 | 39,671 | 88,570 | 6,824 | 4,696 | 12,075 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Gears | 20,092 | 17,196 | 36,781 | 4,310 | 3,952 | 8,621 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Unallocated costs | - | - | - | (1,701) | (1,593) | (3,273) |
+----------------------+---------+---------+---------+---------+---------+---------+
| Inter-segmental | (5,275) | (4,461) | (9,654) | - | - | - |
| elimination | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+
| | 179,502 | 143,493 | 320,207 | 44,855 | 32,902 | 74,889 |
+----------------------+---------+---------+---------+---------+---------+---------+
The Fluid Systems operating profit is stated after charging GBP391,000 (First
half 2008 GBP699,000; Full year 2008: GBP1,070,000) of amortisation of acquired
intangibles. The Gears operating profit is stated after charging
GBP29,000 (First half 2008 GBP26,000; Full year 2008: GBP55,000) of amortisation
of acquired intangibles.
The Controls operating profit is stated after crediting a profit on disposal of
property of GBP587,000. No property was sold in 2008.
+----------------------+---------+---------+---------+---------+---------+---------+
| | First | First | Full | First | First | Full |
| | half | half | year | half | half | year |
| | 2009 | 2008 | 2008 | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------+---------+---------+---------+---------+---------+---------+
+----------------------+---------+---------+---------+---------+---------+---------+
| | Segment assets | Segment liabilities |
+----------------------+-----------------------------+-----------------------------+
| | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+
| Controls | 82,788 | 78,539 | 101,160 | 46,626 | 42,606 | 58,049 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Fluid Systems | 73,781 | 66,971 | 74,564 | 23,735 | 20,364 | 23,734 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Gears | 19,296 | 20,521 | 19,707 | 4,956 | 6,347 | 6,998 |
+----------------------+---------+---------+---------+---------+---------+---------+
| Unallocated | 61,709 | 32,443 | 52,019 | 14,750 | 13,057 | 14,273 |
+----------------------+---------+---------+---------+---------+---------+---------+
| | 237,574 | 198,474 | 247,450 | 90,067 | 82,374 | 103,054 |
+----------------------+---------+---------+---------+---------+---------+---------+
+------------------------------------------------+---------+---------+---------+
| Revenue from external customers by location of customer |
+------------------------------------------------------------------------------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Europe | 74,616 | 70,813 | 145,996 |
+------------------------------------------------+---------+---------+---------+
| Americas | 49,489 | 33,211 | 84,049 |
+------------------------------------------------+---------+---------+---------+
| Rest of the World | 55,397 | 39,469 | 90,162 |
+------------------------------------------------+---------+---------+---------+
| | 179,502 | 143,493 | 320,207 |
+------------------------------------------------+---------+---------+---------+
+------------------------------------------------+---------+---------+---------+
| Segment assets by location of assets |
+------------------------------------------------------------------------------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Europe | 116,988 | 116,701 | 131,330 |
+------------------------------------------------+---------+---------+---------+
| Americas | 34,110 | 28,737 | 37,658 |
+------------------------------------------------+---------+---------+---------+
| Rest of the World | 24,767 | 20,593 | 26,443 |
+------------------------------------------------+---------+---------+---------+
| Unallocated | 61,709 | 32,443 | 52,019 |
+------------------------------------------------+---------+---------+---------+
| | 237,574 | 198,474 | 247,450 |
+------------------------------------------------+---------+---------+---------+
3. Net financing income
+------------------------------------------------+---------+---------+---------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Interest income | 141 | 386 | 562 |
+------------------------------------------------+---------+---------+---------+
| Expected return on assets in the pension | 2,704 | 2,948 | 5,896 |
| schemes | | | |
+------------------------------------------------+---------+---------+---------+
| Foreign exchange gain | 209 | 76 | 615 |
+------------------------------------------------+---------+---------+---------+
| | 3,054 | 3,410 | 7,073 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Interest expense | (90) | (152) | (296) |
+------------------------------------------------+---------+---------+---------+
| Interest charge on pension scheme liabilities | (2,725) | (2,767) | (5,538) |
+------------------------------------------------+---------+---------+---------+
| Foreign exchange loss | (650) | (118) | (377) |
+------------------------------------------------+---------+---------+---------+
| | (3,465) | (3,037) | (6,211) |
+------------------------------------------------+---------+---------+---------+
4. Dividends
+------------------------------------------------+---------+---------+---------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| The following dividends were paid in the | | | |
| period per qualifying ordinary share: | | | |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| 16.75p (2008: 14.0p) final dividend | 14,470 | 12,075 | 12,075 |
+------------------------------------------------+---------+---------+---------+
| 9.25p interim dividend | - | - | 7,979 |
+------------------------------------------------+---------+---------+---------+
| 11.5p 2008 additional dividend | - | - | 9,916 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| | 14,470 | 12,075 | 29,970 |
+------------------------------------------------+---------+---------+---------+
| The following dividends per qualifying | | | |
| ordinary share were declared / proposed at the | | | |
| balance sheet date: | | | |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| 16.75p final dividend proposed | - | - | 14,490 |
+------------------------------------------------+---------+---------+---------+
| 11.15p (2008: 9.25p) interim dividend declared | 9,646 | 7,977 | - |
+------------------------------------------------+---------+---------+---------+
| 11.5p 2008 additional dividend declared | - | 9,920 | - |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| | 9,646 | 17,897 | 14,490 |
+------------------------------------------------+---------+---------+---------+
5. Earnings per share
Earnings per share is calculated using the profit attributable to the ordinary
shareholders for the period and 86.2m shares (six months to 30 June 2008: 86.1m;
year to 31 December 2008: 86.1m) being the weighted average ordinary shares in
issue.
Diluted earnings per share is calculated using the profit attributable to the
ordinary shareholders for the period and the weighted average ordinary shares in
issue adjusted to assume conversion of all potentially dilutive ordinary shares
under the Group's option schemes, Sharesave plan and Long-term incentive plan.
6. Inventories
+------------------------------------------------+---------+---------+---------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Raw materials and consumables | 28,234 | 28,450 | 31,937 |
+------------------------------------------------+---------+---------+---------+
| Work in progress | 7,067 | 7,743 | 18,411 |
+------------------------------------------------+---------+---------+---------+
| Finished goods | 15,195 | 13,279 | 9,062 |
+------------------------------------------------+---------+---------+---------+
| | 50,496 | 49,472 | 59,410 |
+------------------------------------------------+---------+---------+---------+
7.Share capital and reserves
The number of ordinary 5p shares in issue at 30 June 2009 was 86,515,000 (30
June 2008: 86,497,000; 31 December 2008: 86,510,000).
The group acquired 157,872 of its own shares through purchases on the London
Stock Exchange during the period, (30 June 2008: 215,873; 31 December 2008:
374,461). The total amount paid to acquire the shares was GBP1,300,000 (30 June
2008: GBP2,261,000; 31 December 2008: GBP3,518,000),
and this has been deducted from shareholders equity. The shares are held in
trust for the benefit of Directors and employees for future payments under the
Share Incentive Plan and Long-term incentive plan. All issued shares are fully
paid.
The Group's long-term incentive plan and share investment plan vested during the
period and 196,862 and 219,701 Treasury shares, respectively, were re-issued to
employees.
Employee share options schemes: options exercised during the period to 30 June
2009 resulted in 4,935 ordinary 5p shares being issued (30 June 2008: 28,139
shares), with exercise proceeds of GBP21,250 (30 June 2008: GBP91,000). The
related weighted average price at the time of exercise was GBP8.26 (30 June
2008: GBP10.41) per share.
8. 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 Annual
Report & Accounts. Transactions between subsidiaries for the sale and purchase
of products or the subsidiary and parent for management charges are priced on an
arms length basis.
Sales to subsidiaries and associates of BAE Systems plc, a related party by
virtue of non-executive director IG King's directorship of that company,
totalled GBP4,000 (First half 2008: GBP31,000; Full year 2008: GBP32,000) during
the period and there were no amounts outstanding at 30 June 2009 ( First Half
2008: GBP28,000; No amounts outstanding 31st December 2008)
Key management emoluments
The emoluments of those members of the management team, including directors, who
are responsible for planning, directing and controlling the activities of the
Group are:
+------------------------------------------------+---------+---------+---------+
| | First | First | Full |
| | half | half | year |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------+---------+---------+---------+
| Emoluments including social security costs | 1,227 | 1,289 | 2,535 |
+------------------------------------------------+---------+---------+---------+
| Post employment benefits | 212 | 189 | 388 |
+------------------------------------------------+---------+---------+---------+
| Share based payments | 157 | 471 | 760 |
+------------------------------------------------+---------+---------+---------+
| | 1,596 | 1,949 | 3,683 |
+------------------------------------------------+---------+---------+---------+
9. Interest-bearing loans and borrowings
The following loans and borrowings were issued and repaid during the six months
ended 30 June 2009:
+---------------------------------------+----------+----------+----------+----------+
| | Currency | Interest | Carrying | Year of |
| | | rate | value | maturity |
| | | | GBP000 | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Balance at 1 January 2009 | | | 347 | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Repayments: | | | | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Bank loan | ZAR | 9% - | (12) | 2009 |
| | | 11% | | |
+---------------------------------------+----------+----------+----------+----------+
| Finance leases | Eur | 3% - | (56) | 2010 |
| | | 10% | | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| New borrowings: | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Finance leases | Eur | 3% - | 82 | 2011 |
| | | 10% | | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Currency adjustment | | | (35) | |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Balance at 30 June 2009 | | | 326 | |
+---------------------------------------+----------+----------+----------+----------+
10. Share-based payments
A grant of shares under the Group long-term incentive plan ('LTIP') was made on
4 March 2009 to selected members of senior management at the discretion of the
Remuneration Committee. An explanation of the terms and conditions of the LTIP
are contained in the 2008 Annual Report & Accounts. The terms and conditions of
this grant were:
+-------------------------------------------------+--+------+----------+
| | | | Share |
| | | | scheme |
+-------------------------------------------------+--+------+----------+
| | | |
+-------------------------------------------------+--+-----------------+
| Grant date | | 4 March 2009 |
+-------------------------------------------------+--+-----------------+
| Share price at grant date | | | GBP7.59 |
+-------------------------------------------------+--+------+----------+
| Shares / Share equivalents under scheme | | | 220,382 |
+-------------------------------------------------+--+------+----------+
| Vesting period | | | 3 years |
+-------------------------------------------------+--+------+----------+
| Expected volatility | | | 37.1% |
+-------------------------------------------------+--+------+----------+
| Risk free rate | | | 1.7% |
+-------------------------------------------------+--+------+----------+
| Expected dividends expressed as a dividend | | | 3.4% |
| yield | | | |
+-------------------------------------------------+--+------+----------+
| Probability of ceasing employment before | | | 3% p.a. |
| vesting | | | |
+-------------------------------------------------+--+------+----------+
| Fair value | | | GBP4.31 |
+-------------------------------------------------+--+------+----------+
The basis of measuring fair value is consistent with that disclosed in the 2008
Annual Report & Accounts.
11. 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 average annual tax rate used for the year ended 31 December 2009
is 30.0% (the effective tax rate for the year ended 31 December 2008
was 29.5 %). The increase is mainly due to the increase in the tax rate in china
after the end of a short-term tax holiday.
12. Shareholder information
This interim report is being sent to shareholders who requested it and copies
are available to the public from the Registered Office at the address below. The
interim report is also available on the company's website at www.rotork.com.
We offer shareholders a dividend reinvestment plan ('DRIP') under which
shareholders can reinvest their cash dividends in the company, by buying shares
in the market at competitive dealing rates. If you have already elected to join
the DRIP, there is no further action for you to take.
If you would like to join for the first time, please contact our registrars
below.
Equiniti
The Causeway
Worthing
West Sussex
BN99 6DA
Share dividend helpline number - 0870 241 3018
13. Group information
Secretary and registered office:
Stephen Rhys Jones
Rotork plc
Rotork House
Brassmill Lane
Bath
BA1 3JQ
Company website:
www.rotork.com
Investor Section:
http://www.rotork.com/en/investors/index/
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MGGGRVFMGLZM
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