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Investing.com -- Rotork (LON:ROR) reported solid order intake growth in the first quarter of 2025, with mid-single-digit organic growth driven by strong year-on-year performance across all divisions. The Water & Power segment led the gains, while LNG liquefaction also saw a notable increase in orders compared to the prior year.
Group revenue declined modestly year-on-year, against a tough comparison of mid-teens organic growth in the same quarter of 2024. Comparators will ease over the remainder of the year.
Cash generation remained strong during the period, with Rotork ending the quarter with £91 million in net cash. The company continued to actively deploy capital, completing the £44 million acquisition of Noah in March and launching a £50 million share buyback programme in April.
"Rotork 1Q25 Trading Update is very solid, in our view, and the group has had a decent start to the year overall," Jefferies analysts said.
Looking ahead, the U.K. industrial group maintained its full-year outlook but now expects a slightly higher foreign exchange headwind of 2–3% in 2025, compared with a previous estimate of 1–2%.
"Since we reported our 2024 results there has been no significant change in order trends or customer behaviour and April has been in line with our expectations," Rotork said in the trading update.
"Whilst we are mindful of ongoing macro uncertainty, we continue to expect 2025 to be a year of progress on an organic constant currency (OCC) basis supported by our order book and positive end markets."
The company said it anticipates limited direct impact from tariffs, supported by its three manufacturing facilities in the U.S., which account for around 20% of group sales and are capable of meeting most local demand.
A surcharge has been introduced on new U.S. contracts to offset additional costs, while existing contracts will be fulfilled from inventory. Rotork also noted ongoing supply chain adjustments, including increased shipments into Canada from Europe.
"We think Rotork’s pricing power and relatively local for local production positions them well to deal with tariffs," Morgan Stanley (NYSE:MS) analysts commented. They said the company’s valuation remains "attractive," reiterating a Buy rating.