11 May 2001
11 May 2001
CHAIRMAN'S AGM STATEMENT
IMI plc, the major international engineering group, held its thirty-ninth
Annual General Meeting at 12 noon today. At the meeting Sir Eric Pountain,
'Our results for 2000 are set out in the Annual Report. Very briefly, we faced
a difficult trading environment during 2000 and we were pleased to be able to
report increased sales, profit and earnings per share. Your Board is
recommending an increased final dividend in respect of 2000 of 9.5p, raising
the total dividend for the year to 15.5p.
In our preliminary results announcement we reported that trading in the early
months of 2001 was challenging and this continues to be the case.
In Hydronic Controls, the important German construction market has continued
to weaken, affecting sales of copper tube, fittings and radiator valves.
Margins in Polypipe Building Products are improving but other Polypipe
businesses still face difficult conditions.
In Drinks Dispense, while volumes in the US to date are lower than last year,
markets generally are improving and we are benefiting from a lower cost base.
Our Cannon business continues to enjoy a positive trading environment.
Fluid Power sales in the US, accounting for around 25% of its total sales, are
well down on last year, especially in the automotive and commercial vehicle
sectors. However, demand in Europe and Asia remains encouraging, with only
limited evidence to date of any adverse impact from the slowing US economy.
In Energy Controls, our severe service valves business is experiencing strong
demand, boosted by the investment required to meet an acute shortage in power
generation capacity, particularly in the US. We have increased our costs in
sales and engineering which, whilst impacting margins in the short term, will
enable us to take full advantage of what is undoubtedly an exciting long term
When we announced our results in March, Martin Lamb referred in his statement
to a strategy review. This review is making good progress. A number of our
businesses offer excellent potential for growth and this will be enhanced
through accelerated investments in marketing and technology. Profit
improvement will also come through a restructuring of our cost base. The first
round of that restructuring is now underway, part of a major programme that
will see rationalisation costs of around £40 million this year, and £20
million next year. We will be adding to our market position in the chosen
businesses through acquisition, financed, in part, by selective disposals in
In the interests of keeping shareholders informed and in line with best
practice, we intend in future to issue a trading update in June and December
each year. This will be released through the London Stock Exchange and will
also be published on the IMI web site (www.imi.plc.uk).
Today I retire as Chairman of IMI and am delighted to be handing over to Gary
Allen. I wish both him and our new Chief Executive, Martin Lamb success in
their new roles. I am sure the Company will continue to progress under their
Weber Shandwick Worldwide 020 7329 0096