Rotork PLC Posts Robust 2025 Full Year Results with Order Growth and Margin Expansion

Rotork’s 2025 at a glance: orders up, margins up

Rotork has posted a robust 2025, with orders, revenue and margins all moving in the right direction despite mixed end markets and some late-year project delays in midstream Oil & Gas. The company’s Growth+ strategy, focus on higher value “Target Segments” and a growing service business did the heavy lifting.

Note: OCC means organic constant currency and strips out FX and acquisitions. bps means basis points.

What drove the performance – mix, service and efficiency

The Growth+ playbook is biting. Target Segment revenues rose 8% OCC, and Rotork Service reached 24% of Group sales (23% in 2024). A richer mix and operational efficiencies did the margin lifting, taking the adjusted operating margin to 24.6%.

There was a notable FX drag too. Currency translation knocked £15.9m off revenue and £6.1m off adjusted operating profit. That makes the double-digit OCC profit growth more impressive, in my view.

Divisional performance: where the growth came from

Oil & Gas – margins up despite late project delays

• Revenue £351.2m (-1.2% reported, +0.6% OCC).
• Adjusted operating profit £97.6m (+6.0% reported, +9.1% OCC); margin 27.8% (+190bps reported).
• Upstream grew thanks to electrification wins; downstream was steady; midstream softened late in H2 due to customer-driven project delays.

Orders held up, and mix plus efficiencies widened margins. 2026 is guided as stable here with a second-half skew.

Chemical, Process & Industrial (CPI) – strategy delivering

• Revenue £223.4m (+9.0% reported, +7.0% OCC).
• Adjusted operating profit £58.2m (+9.9%); margin 26.1% (+30bps reported).
• Growth engines: speciality chemicals, critical HVAC and data centres, mining and marine.
• Noah acquisition added £11.2m of revenue and £2.0m of adjusted operating profit since March.

Despite subdued bulk chemicals, CPI accelerated in H2, helped by data centre demand and marine electrification. Initial margin dilution from Noah was more than offset by operating leverage.

Water & Power – steady growth, slight margin dip

• Revenue £202.7m (+4.5% reported, +6.1% OCC).
• Adjusted operating profit £58.0m (+2.9%); margin 28.6% (-50bps reported).
• Water investment in modernisation and treatment remained supportive; power refurbishment improved, with gas and traditional power stronger in China, the Middle East and the USA.

Mix, FX and higher investment trimmed margins slightly, but demand signals look healthy. Rotork is also investing to re-enter nuclear, eyeing long-term SMR opportunities.

Cash, buybacks and balance sheet position

Cash generation remained good. Cash conversion was 101% and free cash flow was £106.8m, down from £120.0m as working capital rose to support the order book. Net cash ended at £65.3m after £60.4m of buybacks, £66.6m of dividends and the Noah acquisition cash outflow of £31.8m plus £8.0m of acquired debt settlement.

Return on capital employed ticked up to 38.4%, consistent with Rotork’s asset-light model. Liquidity looks comfortable with £110.0m cash and a £75m revolving credit facility now extended to 2029, £22.0m drawn at year end.

Active portfolio management continued. Two small non-core disposals completed on 4 March 2026 for an enterprise value of £24.4m. Meanwhile, the £50m 2025 buyback was completed and a follow-on £50m programme was announced in November, with the remaining buyback to complete in H1 2026.

Outlook for 2026 and beyond

Management expects continued good momentum in CPI and Water & Power, with Oil & Gas stable and weighted to H2. Target Segments and Rotork Service are expected to keep helping the Group outperform wider markets. The longer-term financial ambition is mid to high single-digit sales growth and mid-twenties adjusted operating margins.

Market colour: downstream looks stable; upstream and midstream subdued; water infrastructure resilient; power supported by rising electricity demand, including data centres. The Board notes geopolitical uncertainty but still guides to further OCC progress in 2026.

What this means for shareholders – my take

Positives

• Quality growth: orders up 6.0% OCC and adjusted operating profit up 10.0% OCC despite FX headwinds.
• Margins: adjusted margin at 24.6% with 140bps OCC expansion, driven by mix, service and efficiencies.
• Capital discipline: high ROCE at 38.4%, ongoing buybacks and a 7.1% dividend increase to 8.30p.
• Strategic traction: CPI’s pivot into speciality niches, HVAC and data centres is working; Rotork Service now 24% of sales.

Watch-outs

• Oil & Gas midstream delays late in 2025 and a subdued upstream/midstream outlook could cap top-line acceleration near term.
• Cash conversion eased to 101% and net cash fell to £65.3m after M&A and buybacks, so execution on working capital remains important.
• Water & Power margins dipped 50bps reported due to mix, FX and higher investment.
• Business Transformation costs were £25.6m in 2025, with a further £35m to £40m expected over the next two years.

Overall, this is a solid, well-balanced update. Margin expansion, resilient orders and visible capital returns offset the softer pockets in Oil & Gas. If CPI and Service keep compounding and Water & Power stays firm, Rotork looks positioned to make “further progress” again in 2026 on an OCC basis.

Dividend timetable for your diary

• Proposed final dividend: 5.35p per share.
• Record date: 24 April 2026.
• Ex-dividend date: 23 April 2026.
• Payment date: 2 June 2026 (subject to approval at the AGM).
• DRIP election deadline: 11 May 2026.

Jargon buster

• OCC (organic constant currency) – results exclude acquisitions and restate prior year at 2025 exchange rates to show true underlying growth.
• Adjusted results – exclude amortisation of acquired intangibles and other specified items to show underlying performance.
• ROCE – return on capital employed, a measure of how efficiently profits are generated from capital used.
• bps – basis points. 100bps equals 1 percentage point.