Rotork reported 8 per cent rise in full-year revenue
By Abhijith Ganapavaram
Feb 27 (Reuters) – Valve-control systems maker Rotork Plc posted an 8 per cent rise in full-year revenue and said it would benefit from U.S. President Donald Trump’s move to encourage shale and pipeline activity and investment in infrastructure.
“(Trump) is encouraging activity in shale, which will be beneficial to us,” Chief Executive Peter France told Reuters, adding that the president’s move to expedite clearance of pipelines would also give a boost.
Trump, speaking at the Conservative Political Action Conference on Friday, said his administration was “planning bold action to lift restrictions on U.S. energy sources, including shale oil, natural gas and coal.”
He has also cleared the controversial Dakota Access and Keystone XL pipelines.
France said there has been an uptick in activity in the oil and gas markets since the U.S. elections, and added that he expects this to carry on into 2018.
This is in contrast to his comments in August, when France warned that activity in oil and gas markets would remain subdued.
Oil and gas companies last year were forced to scale back on capital expenditure due to a more-than-two-year slump in oil prices, harming companies like Rotork, which gets a lion’s share of revenue by selling valve-automation equipment to the oil and gas industry.
Rotork said 2016 revenue rose to 590.1 million pounds ($733.3 million) from 546.5 million pounds ($679.08 million) a year earlier, when it reported an 8.1 per cent drop in revenue.
Adjusted operating profit before tax fell 4 per cent to 117.9 million pounds, but the company hiked its full-year dividend by 0.05 pence to 5.1 pence.
“This is a very solid set of FY16 results from Rotork, with numbers coming in ahead of the Street across the board,” Jefferies analyst Andy Douglas wrote in a note.
Rotork’s shares rose as much as 5.7 per cent to 249.30 pence before paring some gains to trade at up 3 per cent.
Separately, British ground engineer Keller Plc said the new U.S. administration’s signal to increase infrastructure spending could benefit the company.
“We potentially would see some more investment coming through, but not immediately. It’s not going to happen in 2017, I think that is a 2018 opportunity,” CEO Alain Michaelis told Reuters, after Keller posted a 14 per cent rise in revenue for 2016.
($1 = 0.8048 pounds) (Reporting by Abhijith Ganapavaram and Rahul B in Bengaluru)