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Wednesday 30 June, 2004


Trading Statement

30 June 2004

                                                                    30 June 2004

                                    IMI plc

                                 Trading Update

In accordance with its normal practice, IMI plc is today issuing a trading
update in advance of its interim results announcement.

The steady improvement in general conditions is continuing and we expect to be
able to report overall like for like volumes 5% higher than the first half of
2003. Order intake is running around 7-8% ahead of this time last year.

In Severe Service the growth in order intake has slowed marginally to around 10%
reflecting our decision to focus, for a period, on the consolidation of the
operational infrastructure after three years of very strong growth. Sales in the
first half will be lower than last year as a result of scheduled shipment
timing, although margins will show some improvement. Our Fluid Power business
continues to improve, with good growth in both the US and Asian markets, and an
accelerating contribution from new products in our targeted end market segments.
The improvement in Europe however, is more subdued. In Indoor Climate, German
thermostatic radiator valve sales continue to show a small improvement,
reversing a long downward trend, and balancing valve sales in Eastern Europe,
albeit at lower margins, remain strong. Volumes will be higher than 2003,
although margins are being impacted by raw material costs and exchange rates.

Despite the negative impact of raw material costs on Beverage Dispense and
Merchandising Systems, we have made progress in both our Retail Dispense
businesses. Volumes in Beverage Dispense have steadied with some moderate
improvement in the US and the Far East. Operational efficiencies continue to
improve at our Mexican facility. Merchandising Systems is enjoying another good
period with growth coming from our Cannon business, continued strong performance
at DCI and a pleasing contribution from a full six months at Artform.

UK volumes in the Building Products business of Polypipe remain reasonably
healthy. Raw material price increases however, which show little signs of
abating, continue to put pressure on margins and profit will be lower than last

Rationalisation costs for the first half and for the full year are expected to
be at similar levels to last year at around £2.5m and £6m respectively.

As normal for the first half of the year there will be an increase in working
capital resulting in a small increase in gearing. Cash generation remains

Movements in average exchange rates will reduce reported profits for the half
year by around £3m and the net impact of raw material cost increases is likely
to be around £4m. Despite this, profit for the six months is expected to be
around 10% higher than last year.

We have in a separate release today announced the acquisition of Fluid
Automation Systems, a high technology Swiss company specialising in miniature
solenoid valves which will enhance our Fluid Power capability in medical and
semiconductor market segments.

In respect of the ongoing European Commission enquiries, a decision on the
copper tube case is expected shortly, but a decision on the copper fittings case
is unlikely to be made before the second half of 2005. It is not possible to
give any reliable estimate of the likely level of fines in either case.

The interim results announcement for the six months ending 30 June 2004 will be
published on 6 September 2004.

                                    - Ends -

For further information contact:

IMI plc
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:

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