14 May 2004
14 May 2004
IMI plc Annual General Meeting
IMI plc, the major international engineering group, is holding its 2004 Annual
General Meeting at 12 noon today. At the meeting Gary Allen, Chairman, will
'When I reported to the Annual General Meeting last year I referred to the
satisfactory progress we were making with our three-year programme of
re-structuring and reshaping IMI.
I am pleased to tell you that we completed a great deal of that programme in
2003. Our cost base is significantly lower than three years ago, partly by
reorganisation and also by major investments in new factories in the Czech
Republic, Mexico and China - they are impressive developments which have
improved our competitive position without diminishing our reputation for quality
and customer service.
We also continued with reshaping our business portfolio by a combination of both
acquisition and divestment, putting IMI in an excellent position for growth.
We have achieved these objectives and at the same time maintained a good level
of operational performance with higher profits and improved the strength of the
balance sheet with another year of substantial cash generation.
Group sales of continuing businesses were £1,565m (2002 : £1,453m), including
£68m from acquisitions. Volumes in the second half were some 5% higher, leaving
the year as a whole around 3% ahead on a like for like basis.
Profit before tax, rationalisation costs, goodwill amortisation and exceptional
items increased by 8.4% to £142.6m (2002 : £131.5m).
Rationalisation costs for the year at £5.7m were at a more normal level compared
to the significant restructuring costs of £32.2m in 2002 and £44.6m in 2001.
The resulting profit before goodwill amortisation, exceptional items and tax was
£136.9m (2002 : £99.3m) and profit before tax at £117.2m (£74.3m) was some 58%
ahead of last year.
Once again all our businesses generated excellent cash with further reductions
in working capital producing operating cash ahead of operating profit for the
third year running. Balance sheet gearing at the year end was 25% (2002 : 33%),
with net borrowings reduced to £136 million (2002 : £173 million).
We gave an update in March on the European Commission's investigations into
copper plumbing tubes and fittings and have no further developments to report.
The Board is recommending the payment of an unchanged final dividend of 9.5p
making a total of 15.5p (2002 : 15.5p) for the year. It was the Board's
intention at the outset to maintain the dividend during the three-year programme
of restructuring and repositioning : our strong cash performance has meant that
our cash cover has been more than adequate throughout. It is the Board's
intention to return to a progressive dividend policy at the earliest appropriate
In view of the Higgs report on corporate governance and the Smith report on the
work and the role of audit committees, both now reflected in the Combined Code,
the role, duties and responsibilities of non-executive directors have been
significantly increased and we will need to strengthen still further the number
of non-executives on the Board.
Turning now to current trading. Encouragingly, the improvement seen in the
second half of last year has continued into the first four months of 2004. Order
books are around 7-8% higher and overall volumes around 5% ahead.
Despite continued pressure from raw material prices and the impact of the
stronger pound on reported profit, we look forward to being able to report good
progress in our interim results statement in September.
In accordance with our usual practice, it is our intention to issue a trading
update on 30 June 2004, which will comment in more detail on current trading'.
- Ends -
For further information contact:
Graham Truscott, Communications Director Tel: 0121 717 3712
Weber Shandwick Square Mile
Nick Oborne/ Peter Corbin/ Stephanie Badjonat Tel: 020 7067 0700
Information about IMI plc can be found on the website: www.imiplc.com
Note to editors:
IMI plc is a dynamic international engineering business specialising in
innovative solutions and services for a wide range of industrial and retail
customers. Its future growth is being built on the two business areas of Fluid
Controls and Retail Dispense.
IMI's operations in these two business areas share the following core
characteristics: strong market positions in growing markets; the ability to be
clearly differentiated from their competitors through technological innovation
or after-sales service; and the provision of 'added value' through bespoke
solutions rather than a high manufacturing or material content.
IMI is quoted on the London Stock Exchange and is capitalised at approximately
This information is provided by RNS
The company news service from the London Stock Exchange