Rotork interim results 2026: margins rise as ABB's 506p takeover moves closer

What did Rotork report?

Rotork PLC delivered a resilient first half of 2026, with flat reported revenue but higher profits and margins.

Revenue was £367.2 million, virtually unchanged from £367.3 million a year earlier. On an organic constant currency basis, or OCC, revenue grew 1.3%. OCC strips out currency movements, acquisitions and disposals to give investors a clearer view of underlying trading.

Adjusted operating profit increased 1.7% to £82.2 million, while the adjusted operating margin rose from 22.0% to 22.4%. On an OCC basis, the margin improvement was 60 basis points, with 100 basis points equal to one percentage point.

Reported figures were stronger. Operating profit rose 11.3% to £72.0 million and basic earnings per share increased 17.5% to 6.7p, helped by lower net adjusting items and a £6.9 million gain from business disposals.

Key figure	H1 2026	H1 2025	Change
Order intake	£371.8 million	£391.1 million	-4.9%
Revenue	£367.2 million	£367.3 million	0.0%
Adjusted operating profit	£82.2 million	£80.8 million	+1.7%
Adjusted operating margin	22.4%	22.0%	+40 basis points
Reported profit before tax	£71.4 million	£65.1 million	+9.7%
Adjusted basic EPS	7.4p	7.1p	+4.2%
Interim dividend	3.00p	2.95p	+1.7%

The results are available in the original company announcement.

ABB's 506p offer now dominates the investment case

The operational performance matters, but the proposed acquisition by ABB is likely to remain the main issue for Rotork shareholders.

Rotork's board has agreed the terms of a recommended cash acquisition valuing each share at 506p. This comprises 503p in cash from ABB and Rotork's 3p interim dividend.

That distinction is important. The dividend is included within the stated 506p offer value rather than being an additional payment on top.

The deal is expected to complete during the first half of 2027, subject to shareholder, court, antitrust and foreign investment approvals. The required majorities must approve the scheme at the relevant shareholder meetings.

Until those conditions are satisfied, completion is not guaranteed. No revised timetable, competing proposal or further consideration was disclosed in these interim results.

Strong CPI growth offsets Oil & Gas weakness

The headline revenue figure hides sharply different performances across Rotork's three divisions.

Division	H1 revenue	OCC revenue change	Adjusted margin
Oil & Gas	£153.7 million	-8.4%	24.2%
Chemical, Process & Industrial	£114.2 million	+16.0%	24.7%
Water & Power	£99.3 million	+3.4%	28.1%

Chemical, Process & Industrial leads the way

Chemical, Process & Industrial, or CPI, was the standout performer. Revenue rose 16.0% on an OCC basis, while adjusted operating profit climbed 24.4% to £28.3 million.

Growth came from speciality chemicals, marine and critical heating, ventilation and air conditioning applications, including data centres. Its adjusted operating margin expanded by 170 basis points on an OCC basis to 24.7%.

This performance supports management's Growth+ strategy, particularly its focus on faster-growing target markets. Group revenue from Target Segments increased 10% on an OCC basis during the half.

Water & Power delivers higher profitability

Water & Power revenue increased 3.4% on an OCC basis to £99.3 million. Adjusted operating profit rose 15.1% to £27.9 million, with the margin reaching 28.1%.

Management attributed the margin improvement to higher volumes, favourable product mix and tariff effects. Robust order intake also provides visibility for stronger activity during the second half.

Oil & Gas remains the weak point

Oil & Gas revenue fell 8.4% on an OCC basis to £153.7 million. Adjusted operating profit declined 13.8% to £37.1 million, while the adjusted margin contracted by 150 basis points to 24.2%.

Rotork blamed continued customer capital expenditure discipline, geopolitical uncertainty and disruption linked to conflict in the Middle East. Upstream and midstream revenue declined, although downstream activity was more resilient.

Management now expects the division's recovery to be more gradual, with full-year Oil & Gas revenue slightly lower than in 2025.

Service revenue improves the quality of the mix

Service increased to 24% of group revenue from 23% a year earlier and grew faster than Rotork overall.

That is encouraging because servicing an installed product base can provide more recurring revenue and deepen customer relationships. It also helped support resilience in downstream Oil & Gas during a difficult period.

Rotork's broader Growth+ programme also produced product launches and project wins across data centres, water treatment, energy infrastructure and industrial applications. These activities helped improve the sales mix and support margins even though total reported revenue did not grow.

Cash generation was less convincing

The weaker part of the results was cash flow.

Cash conversion fell to 79% from 89%, as working capital increased amid volatility in Oil & Gas. Cash generated from operations declined 9.9% to £64.8 million, while free cash flow fell from £29.3 million to £22.4 million.

Inventory increased by £15.9 million compared with December 2025, while trade receivable days rose from 58 to 67. Net working capital increased to 28.7% of revenue from 26.8% at the end of 2025.

Net cash consequently declined from £65.3 million in December to £25.3 million at the half-year point. However, this also reflected £40.3 million spent on share buybacks and £43.7 million of dividend payments.

The balance sheet remains in net cash, but investors should watch whether the working capital build unwinds during the second half.

Dividend and capital returns

Rotork declared a 3.00p interim dividend, up 1.7% from 2.95p. It is due to be paid on 21 September 2026 to shareholders on the register on 14 August.

The company also completed the remaining £40 million of the £50 million share buyback announced in November 2025. Since the beginning of 2024, it has returned £150 million through buybacks.

Again, the interim dividend forms part of ABB's total 506p offer value.

Outlook remains positive, with clear pressure points

Rotork continues to expect further progress on an OCC basis in 2026. Its expectations for Water & Power are unchanged, CPI is now expected to perform more strongly, and Oil & Gas is forecast to recover more gradually.

The positives are improved margins, strong CPI growth, Water & Power order momentum, expanding Service revenue and a net cash balance sheet. Return on capital employed also remained high at 36.5%, compared with 37.0% a year earlier.

The negatives are lower order intake, weaker cash conversion, rising working capital and continued geopolitical pressure on Oil & Gas.

For shareholders, however, the next major milestones are likely to concern ABB's acquisition. The first-half results show a business maintaining profitability through a mixed trading environment, but the eventual shareholder outcome now depends heavily on the proposed 506p transaction receiving the necessary approvals and completing as planned.