30 June 2006
30 June 2006
In accordance with its normal practice, IMI plc is today issuing a trading
update in advance of its interim results announcement for the six months ending
30 June 2006, due to be published on 4 September 2006.
Trading to date in our Fluid Controls businesses continues to demonstrate good
underlying momentum. Our Retail Dispense businesses, as already indicated, will
be behind last year for the first half but we expect a stronger second half.
In Severe Service order intake for new valves remains buoyant both in the power
segment and oil and gas. Customer Service orders also remain healthy. Overall
shipments in the first half are expected to be around 10% ahead of last year.
Truflo, acquired with effect from 26 April, has traded well in the first few
weeks of ownership, with continuing good demand.
Within Fluid Power the improvement in European demand seen at the start of the
year has continued although the UK market is somewhat subdued. The US and Asia
remain positive and our sector growth continues to be encouraging. In global
truck, demand is expected to remain strong for the whole of 2006 and we are
pleased with the contribution being made by GT Development, acquired at the end
of last year.
Indoor Climate is on course to produce a good first half performance and is
expected to show organic growth of around 3% with both TRV and balancing valves
showing positive momentum. High metal prices however, remain challenging.
In Beverage Dispense, fewer major account conversions by brand owners and some
delays in shipment call-offs have resulted in the normal seasonal momentum in
the second quarter in the US being lower than in previous years. In Europe the
outlook has improved and in the UK and Asia the underlying momentum remains
positive. As stated at our Annual General Meeting, sales will be lower in the
first half but are expected to pick up in the second half. Northern Parts, the
recent acquisition in our parts management business, has made a good start.
In Merchandising Systems, dealer activity in the US automotive sector remains
slow but the normal second half seasonal impetus is expected. Our beverage,
grocery, and consumer electronics sectors continue to deliver good growth and we
see a number of key programme opportunities in the second half for our front-end
merchandiser business. In the US, we have increased our investment in both
category management and the development of a cosmetic sector.
We are pressing ahead with our restructuring programme announced in March and
have already started to implement a significant relocation of some of our US
Fluid Power operation. Restructuring costs in the first half are expected to be
around £7m compared to £2.2m in 2005.
We expect the first half profit before restructuring costs and intangible
amortisation to be £84-87m. In arriving at this guidance we are not anticipating
any significant impact from the change in fair value of financial instruments
(IAS39). The equivalent number in 2005 for continuing businesses was £69.6m
(after a charge of £2.9m under IAS39).
- Ends -
Graham Truscott, Communications Director Tel: 0121 717 3712
Weber Shandwick Square Mile
Nick Oborne/Stephanie Badjonat Tel: 020 7067 0700
Notes to editors
IMI is a dynamic, worldwide company delivering innovative engineering solutions
to leading global customers in clearly defined niche markets. Its five
businesses share a common goal - to convert their industry knowledge and market
insight into customised, design-engineered solutions which create customer
advantage and value. These include severe service valves, motion and fluid
control systems, indoor climate controls, beverage dispense systems, and
merchandising display systems for retail operations.
Close customer relationships, strong positions in growing markets and clear
differentiation through technological innovation or service are the defining
characteristics of all IMI businesses.
IMI is quoted on the London Stock Exchange. Information about IMI plc can be
found on the website: www.imiplc.com
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The company news service from the London Stock Exchange