Interim Management Statement

RNS Number : 5354G

IMI PLC

08 May 2014

 



8 May 2014

IMI plc ('IMI' or 'the Group')

Interim Management Statement

IMI, the specialist engineering group, issues the following Interim Management Statement, which covers the period from 1 January to 7 May 2014.  All financial information relates to the period 1 January to 30 April 2014.  

Outlook and current trading

Our overall expectations remain unchanged. The Group is on track to deliver modest organic revenue growth in the first half with slightly lower margins compared to the first half of last year and an improved overall performance in the full year.

Overall trading in the first four months of the year has been in line with expectations with Group revenues up 1% on an organic basis and down 4% on a reported basis reflecting the ongoing adverse impact of exchange rate movements. 

Severe Service

Underlying order momentum continues to be positive in our most important end markets.  As expected, order intake in the first four months of 2014 was lower when compared to the same period last year when a very large single order for a Middle Eastern oil and gas customer was secured.  Revenues in the period were down 4% on an organic basis reflecting the strong prior year comparator that included backlog sales.

We continue to expect a strong performance in the remainder of the half and through 2014 which should deliver revenue and margin growth in both the first half and in the full year.

Fluid Power

Fluid Power revenues increased 5% on an organic basis in the first four months of 2014 with good progress in the European Industrial Automation market and strong activity levels in the Commercial Vehicle sector.

We expect Fluid Power to deliver first half revenue growth with margins slightly lower when compared to the first half of 2013 reflecting the sales mix and increased investment to support growth initiatives. Leading indicators and current demand trends support our expectation that the Fluid Power business will make good progress in the second half of the year. 

Indoor Climate

As expected Indoor Climate revenues in the first four months of the year were broadly similar on an organic basis to the same period last year.  We continue to expect first half revenues in Indoor Climate to be broadly flat and margins to be lower compared to the first half of 2013 reflecting the previously announced new product launch costs and the withdrawal from a number of less profitable emerging markets.  Margins are expected to return to more normal levels in the second half of the year.

Financial position

The Group successfully completed the disposal of the Beverage Dispense and Merchandising divisions on 1 January 2014 for $1,100m (approximately £690m).  Since then £620m has been returned to shareholders and a contribution of £70m is being made to the IMI UK Pension Fund. 

Notwithstanding this return of cash the Group retains a robust balance sheet with good cash generation in the year to date.  During the period the Group bought £40m of shares for the employee benefit trust.  Net debt at the end of April was approximately £212m. 

Exchange rates

As detailed in the preliminary results announcement in March, the 2014 financial results are being adversely impacted by the relative strength of sterling compared to the prior year.  If average exchange rates in the four months to the end of April 2014 had been applied to our 2013 results, it is estimated that segmental revenue and segmental operating profit would have both been 4% lower.  

CEO review update

We initiated a wide ranging review at the start of the year covering our existing markets, our operations and the opportunities for future growth.  This review is progressing well and we will report on its findings with our Interim Results which will be announced on 1 August 2014. 

A conference call for analysts and investors will be held at 08:30 GMT today to discuss this statement.  To access the call, please dial [phone], Toll Free 0800 694 0257 - Conference Call id: 29781273.

Enquiries to:

Will Shaw                      IMI plc                                                      Tel:       [phone]

Suzanne Bartch /           StockWell Communications                        Tel:       [phone]

Robert Morgan

Cautionary statement:

This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group.  By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated.  The forward-looking statements reflect knowledge and information available at the date of preparation of this announcement and IMI undertakes no obligation to update these forward-looking statements.  Nothing in this interim management statement should be construed as a profit forecast. 

Notes to editors:

IMI plc, the specialist engineering company, designs, manufactures and services highly engineered products that control the precise movement of fluids.  Its innovative technologies, built around valves and actuators, enable vital processes to operate safely, cleanly, efficiently and cost effectively.  The Group works with industrial customers across a range of high growth sectors, including energy, transportation and infrastructure, all of which are benefiting from the impact of long-term global trends including climate change, urbanisation, resource scarcity and an ageing population.  IMI employs over 12,000 people, has manufacturing facilities in more than 20 countries and operates a global service network.  The Company is listed on the London Stock Exchange and is a member of the FTSE100.  Further information is available at www.imiplc.com. 

 

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