The strong pound has sliced £850,000 off first half profits of heavy-duty valve actuation specialist Rotork despite currency hedging. But sales and volumes overseas are holding up ‘remarkably well,’ said Bill Whiteley, chief executive.
The company makes 80% of its sales abroad and is up against stiff competition from German, US and Italian rivals.
But Rotork is maintaining volume and margins by offering state of the art technology and products renowned for ‘low cost of ownership’ in that they have long lives and rarely go wrong. The company has 30% of the global market.
Whiteley was reporting first half profits pre-tax up 15% at £10.5m on sales up 3.35% at £47.19m. Currency hit the business in France, Holland and Italy but profits increased in Germany and Spain. All 16 overseas operations were profitable.
The bulk of overseas sales are with companies trading in dollars, which have lost less ground against the pound than the deutschmark. The Far East is Rotork’s biggest market with 34% of sales.
The company’s sales are in three main sectors: oil and gas, water and waste water, and power generation. For the first time, water overtook energy in sales in the first half, accounting for 40% of the total.