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Monday 08 September, 2003


Interim Results

08 September 2003

8 September 2003

IMI plc presents its First Half Results

IMI plc, the major international engineering group, today announced its interim
results for the six months ended 30 June 2003.

                                                              2003       2002

Sales                                                         £780m      £826m

Results before rationalisation & restructuring *

    Profit before tax                                        £68.3m     £66.0m

    Adjusted earnings per share                               12.9p      12.5p

Rationalisation & restructuring                               £2.4m     £14.1m

Profit before tax                                            £56.4m     £47.0m

Earnings per share                                             9.7p       8.5p

Net borrowings                                              £199.1m    £329.4m

Gearing                                                         37%        65%

Interest cover before rationalisation & restructuring*          13x         8x

* Before goodwill amortisation and exceptional items

           • Repositioning progressing well

           • Market positions strengthened

           • Strong balance sheet


We continue to make good progress with the repositioning of our business,
increasingly benefiting from the last two years of restructuring. We have
reinvested much of the savings in customer development and innovation activities
designed to improve market positions and drive long term growth. In spite of an
economic climate that remains challenging, and little improved from that
reported six months ago, we are able to announce an increase in half year profit
(before tax, rationalisation and restructuring costs, goodwill amortisation and
exceptional items) to £68.3m from £66.0m. With the bulk of restructuring
completed at the end of last year, profit after rationalisation and
restructuring increased to £65.9m from £51.9m.

The Board has decided to again maintain the interim dividend at 6.0p.

Overall, on a like for like basis, sales have remained steady at similar levels
to last year. It is pleasing that we have increased volumes in Fluid Power by
around 4% and have significantly increased the forward order books of Severe
Service and Merchandising Systems, with good momentum for the second half of the
year and beyond. Beverage Dispense had another challenging six months and Indoor
Climate is still coping with the German construction market decline. Polypipe
continued its solid performance.

Our recent acquisitions all made encouraging contributions. DCI Marketing
(Merchandising Systems) and STI (Severe Service), acquired last year, are on
schedule to deliver significant growth, much of it new product related. Fluid
Kinetics (Severe Service) and Commtech (Indoor Climate), acquired earlier this
year, have now been fully assimilated and have expanded the options for their
respective businesses in technology and service.

Our principal low cost manufacturing facilities in Mexico, The Czech Republic
and China all continued to improve their efficiency levels and expand their
output. With over 1200 people now employed in these countries, we are well on
our way to meeting our goal of achieving 30% of manufacturing output from these
locations. Increasing focus on sourcing materials locally, together with our
other purchasing initiatives, has enabled us to offset inflation pressures

The IMI Academy, with its long term aim of building first class customer
relationships, is making excellent progress and the investment in innovation
through IMI Vision is stimulating further new product developments.

Results summary

Sales of continuing businesses increased to £780m from £738m including £39m from
acquisitions. The impact of exchange rates on translation was negligible.
Reported sales of £826m for the same period last year included £88m in respect
of businesses subsequently sold.

Reported operating profit (before rationalisation and restructuring costs and
goodwill amortisation) was £74.0m (2002: £75.5m). 2002 included £2.5m for
businesses subsequently sold and a £2.5m SSAP24 pension credit which, as
expected, is no longer applicable. After adjusting for these items, the increase
in operating profit of continuing businesses was £3.5m including £2.6m from

Interest costs were reduced to £5.7m (2002: £9.5m). Profit before tax, before
rationalisation and restructuring costs, goodwill amortisation and exceptional
items, increased by 3.5% to £68.3m (2002: £66.0m).

Rationalisation costs for the period were £2.4m (2002: £14.1m) leaving profit
before tax, goodwill amortisation and exceptional items of £65.9m (2002:
£51.9m). After goodwill amortisation and exceptional items, profit before tax
was £56.4m (2002: £47.0m), an increase of 20%.

The effective rate of tax for the year on profit before goodwill and exceptional
items is expected to be 33% (2002: 32%).

Adjusted earnings per share at 12.9p (2002: 12.5p) increased by 3.2% and
earnings per share at 9.7p (2002: 8.5p) increased by 14.1%.

Operating cash flow after rationalisation spend was £49m (2002: £61m) and free
cash flow before dividend was £31m (2002: £50m). Acquisitions absorbed £15m
(2002: £3m net of disposals).

Borrowings at the end of June were £199.1m (June 2002: £329.4m) compared with
£173.5m at the end of December 2002. Gearing was 37% (June 2002: 65%; December
2002: 33%). Interest cover for the period was 13.0 times (2002: 7.9 times)
before rationalisation and restructuring costs and 12.6 times (2002: 6.5 times)
after rationalisation and restructuring costs.

The interim dividend of 6.0p (2002: 6.0p) costing £21.2m (2002: £21.1m) will be
paid on 20 October 2003.


The following is a review of our business areas for the six months to June 2003.
Comparisons with the previous year relate to continuing operations and operating
profit is stated before rationalisation and restructuring costs, goodwill
amortisation and exceptional items.


Sales:              £362m (2002: £322m)

Operating Profit:   £36.6m (2002: £29.6m)

Severe Service

Our Severe Service valves business continues to reap the rewards of the
considerable investment in specialist sales engineers with overall order intake
growing a further 8% over last year. The much publicised weakness in the US
Power market continued but was more than offset by a number of major new
contracts in China, and excellent progress in all geographic territories in a
buoyant gas market. Our strategy to bolster growth through upgrades to existing
plants continues to meet the demands of the market.

Sales in the first half were 14% ahead of last year with a high proportion of
new valve projects delivered; operating profits improved to £8.1m (2002: £7.4m).

Fluid Power

The performance of our Fluid Power business was encouraging. Helped by new
products, a 12% increase in sales to our key target sectors, and good growth in
Asia Pacific, overall volumes were 4% ahead of last year despite an otherwise
flat underlying market.

The transfer of production to both the Mexican and Czech Republic facilities
accelerated during the period and efficiency levels are on track to achieve year
end targets. The significant infrastructure changes being made to the European
market-facing activities are progressing well, with a number of locations now

The benefits from the restructuring programme are continuing to mature and have
contributed to margin enhancement and an increase in operating profit to £17.4m
(2002: £12.2m).

Indoor Climate

Our Indoor Climate business faced generally subdued market conditions. Balancing
valves and commissioning service showed some modest growth but thermostatic
radiator valve sales in Germany were again lower, although the decline seems to
be slowing. Sales to Eastern Europe have recovered some momentum and an office
has been opened to exploit opportunities in China.

Attention to cost control enabled margins to be maintained and, excluding
acquisitions, operating profit increased to £10.6m (2002: £10.0m). In addition,
Commtech, acquired in February to add to our commissioning services business,
contributed £9m sales and £0.5m operating profit.


Sales:              £222m (2002: £223m)

Operating Profit:   £19.2m (2002: £22.4m)

Beverage Dispense

Stripping out the impact of a one-off £21m contract for frozen carbonated
equipment enjoyed in the first half of last year, underlying volumes grew by
around 3%. In an otherwise difficult market, with the food-service sector in the
US particularly weak and soft volumes generally in Europe, this was an
encouraging performance. New products, once again, provided the uplift and our
UK business, in particular, performed strongly, supporting an active beer market
with a number of innovative products.

The relocation of production, both within the US and to Mexico, is now complete.
Whilst operational efficiency levels are improving, we are still short of our
internal targets. This, coupled with higher than normal rework costs in the
first quarter, has impacted first half margins.

Although not yet at break-even, our newly established US on-line parts
distribution business, BEVCORe, continues to make progress. An improvement in
underlying market conditions, particularly in food-service, should enable this
business to achieve its considerable potential.

Operating profit for the period was £12.9m (2002: £17.5m) on sales of £149m
(2002: £174m).

Merchandising Systems

Excluding DCI, acquired in August 2002, sales volume in our Merchandising
Systems business was at the same level as last year, however activity is
considerably stronger. Enquiries and quotations are being converted into firm
orders or commitments as the added value of merchandising investment is again
being recognised. Previously postponed programmes are now being rescheduled and
the underlying trend is positive. Order intake in the six months to June 2003
was significantly higher than in 2002.

DCI has continued its excellent start with results well ahead of the equivalent
period last year before it became part of the Group. In what is traditionally
its quieter period it has contributed £28m sales and £1.8m operating profit. In
addition, it has achieved strong growth in automotive orders and already has an
order book stretching into 2004 and beyond.

Merchandising Systems overall had an operating profit of £6.3m (2002: £4.9m) on
sales of £73m (2002: £49m) .


Sales:              £196m (2002: £193m)

Operating Profit:   £18.2m (2002: £18.5m)

In Building Products, the Polypipe core pipes business continues to demonstrate
its ability to generate satisfactory returns on the back of a solid UK base.
Volumes have held up well and strong emphasis on cost reduction helped mitigate
the pressure on margins from raw material prices, which increased during the
period before easing off. Other Polypipe businesses are finding some softness in
their markets and are taking further steps to reduce the impact on margins.

Copper Tube and Fittings

As reported in our press release of 2 September, in respect of copper plumbing
tube we have now received a Statement of Objections from the European Commission
setting out complaints of alleged anti-competitive practices among a number of
parties including IMI. The investigation in respect of copper plumbing fittings
is continuing but no Statement of Objections has yet been received. We continue
to co-operate with the Commission in respect of both investigations. IMI
disposed of its copper plumbing tube and fittings businesses during 2002 but
retains responsibility for these investigations.


The repositioning is on track and the considerable investments we have made, in
customer development and product innovation, are beginning to bear fruit. Whilst
the macro-economic environment is difficult, and in our view likely to remain so
for some time, our strengthened market positions and reduced cost base should
allow us to report progress for the year as a whole. Confidence in our
businesses' ability to establish long term profitable growth continues to build.

                                        6 months to 30 June 2003
                                         Before         goodwill
                                 restructuring,     amortisation
                                   goodwill and    & exceptional
                                   exceptionals            items         Total
                          Notes              £m               £m            £m
Turnover                       1
Total continuing  
operations                                  780                            780
Discontinued operations                       -                              -
Total turnover                              780                            780
Operating profit               1
Continuing operations                      
before rationalisation
and restructuring                          74.0                           74.0
restructuring                                               (2.4)         (2.4)
Goodwill amortisation                                       (9.5)         (9.5)
Total continuing operations                74.0            (11.9)         62.1
Discontinued operations                       -                -             -
Operating profit                           74.0            (11.9)         62.1
Exceptional items
   Profit on disposal of discontinued                                      
   operations                                                  -             -
   Provision for loss on closure of a       
   business                                                    -             -
   Profit on disposal of property                              -             -
Profit before interest                     74.0            (11.9)         62.1
Net interest payable                       (5.7)                          (5.7)
Profit on ordinary activities  
before taxation                            68.3            (11.9)         56.4
Tax on profit                  2          (22.5)             0.8         (21.7)
Profit on ordinary activities 
after taxation                             45.8            (11.1)         34.7
Equity minority                   
interests                                  (0.5)               -          (0.5)
Profit for the financial year              45.3            (11.1)         34.2
Dividends paid and proposed    3                                         (21.2)
Transfer to reserves                                                      13.0
Adjusted earnings per share    4           12.9p
Earnings per share             4                                           9.7p
Diluted earnings per share     4                                           9.7p

                          6 months to 30 June 2002    Year to 31 December 2002
                                  Before                       Before
                          restructuring,               restructuring,
                            goodwill and                 goodwill and
                            exceptionals    Total        exceptionals    Total
                                      £m       £m                  £m       £m
                                -------------------           ------------------
Total continuing     
operations                           738      738                1463     1463
Discontinued operations               88       88                 149      149
                                -------------------           ------------------
Total turnover                       826      826                1612     1612
                                -------------------           ------------------
Operating profit
Continuing operations   
before rationalisation
and restructuring                   73.0     73.0               146.0    146.0
restructuring                               (13.4)                       (31.3)
Goodwill amortisation                        (8.4)                       (18.0)
                                -------------------           ------------------
Total continuing operations         73.0     51.2               146.0     96.7
Discontinued operations              2.5      1.8                 2.2      1.3
                                -------------------           ------------------
Operating profit                    75.5     53.0               148.2     98.0
Exceptional items
   Profit on disposal of     
   discontinued operations                    1.0                          4.0
   Provision for loss on   
   closure of a business                        -                        (30.7)
   Profit on disposal of  
   property                                   2.5                         19.7
                                -------------------           ------------------
Profit before interest              75.5     56.5               148.2     91.0
Net interest payable                (9.5)    (9.5)              (16.7)   (16.7)
                                -------------------           ------------------
Profit on ordinary           
activities before taxation          66.0     47.0               131.5     74.3
Tax on profit                      (21.1)   (16.0)              (42.1)   (17.6)
                                -------------------           ------------------
Profit on ordinary  
activities after taxation           44.9     31.0                89.4     56.7      
Equity minority interests           (0.9)    (0.9)               (1.3)    (1.3)
                                -------------------           ------------------
Profit for the financial year       44.0     30.1                88.1     55.4
                                -----------                   ----------
Dividends paid and proposed                  (21.1)                       (54.6)
                                           --------                      -------
Transfer to reserves                          9.0                          0.8
                                           --------                      -------
Adjusted earnings per share         12.5p                        25.0p
Earnings per share                            8.5p                        15.7p
Diluted earnings per share                    8.5p                        15.7p

                                             30 June     30 June   31 December
                                                2003        2002          2002
                                                  £m          £m            £m
Fixed assets
Intangible assets                              304.8       291.1         302.5
Tangible assets                                309.9       361.7         313.4
                                               614.7       652.8         615.9
Current assets
Stocks                                         263.3       313.5         262.0
Debtors                                        334.2       342.0         305.5
Investments                                      8.2         8.0           8.2
Cash and deposits                               70.7        67.9          74.3
                                               676.4       731.4         650.0
amounts falling due within one year
Borrowings and finance leases                  (78.9)     (149.3)        (65.1)
Other creditors                               (381.3)     (348.0)       (380.2)
Net current assets                             216.2       234.1         204.7
Total assets less current liabilities          830.9       886.9         820.6

amounts falling due after more than one
Borrowings and finance leases                 (190.9)     (248.0)       (182.7)
Other creditors                                (27.8)      (22.9)        (25.9)
Provisions for liabilities and charges         (72.3)     (109.7)        (81.0)
Net assets                                     539.9       506.3         531.0

Capital and reserves
Called up share capital                         88.2        87.9          88.1
Share premium account                          135.2       133.0         134.1
Revaluation reserve                              1.0         1.0           1.0
Other reserves                                   1.6         1.6           1.6
Profit and loss account                        310.6       279.7         303.1
Equity shareholders' funds                     536.6       503.2         527.9

Minority interests                               3.3         3.1           3.1
                                               539.9       506.3         531.0

                                           6 months to 6 months to     Year to
                                               30 June     30 June 31 December
                                                  2003        2002        2002     
                                                    £m          £m          £m
Reconciliation of operating profit to net cash
inflow from operating activities
     Operating profit                             62.1        53.0        98.0
     Depreciation/amortisation                    41.5        44.0        89.3
     Stocks decrease                               1.2         0.9        16.8
     Debtors increase                            (35.4)      (35.4)       (0.6)
     Creditors and provisions                      3.2        17.7        26.8
Net cash inflow from operating activities         72.6        80.2       230.3


Net cash inflow from operating    
activities                                        72.6        80.2       230.3
Return on investments and servicing of 
finance                                           (6.1)      (11.4)      (16.7)
Taxation                                         (12.2)       (0.2)      (13.8)
Capital expenditure and financial    
investment                                       (23.5)      (19.1)      (11.3)
Acquisitions and disposals                       (14.9)       (2.5)       26.3
Equity dividends paid                            (33.5)      (33.4)      (54.5)
Cash flow before use of liquid              
resources and financing                          (17.6)       13.6       160.3
Management of liquid resources                    (9.4)      (15.8)       (3.3)
     Issue of ordinary shares                      1.2         0.7         1.8
     Increase/(decrease) in borrowings            21.8         2.4      (141.5)
                                                  23.0         3.1      (139.7)

(Decrease)/increase in cash in the period         (4.0)        0.9        17.3

Reconciliation of net cash to movement
in net borrowings
     (Decrease)/increase in cash in   
     the period                                   (4.0)        0.9        17.3
     Cash (inflow)/outflow from         
     borrowings                                  (21.8)       (2.4)      141.5
     Cash outflow from movement in           
     liquid resources                              9.4        15.8         3.3
     Change in borrowings resulting              (16.4)       14.3       162.1
     from cash flows
     Cash assumed with acquisitions                  -         0.6           -
     Currency translation                     
     differences                                  (9.2)        1.0         9.7
     Movement in net borrowings in the    
     period                                      (25.6)       15.9       171.8
     Net borrowings at start of period          (173.5)     (345.3)     (345.3)
     Net borrowings at end of period            (199.1)     (329.4)     (173.5)


                                             6 months    6 months      Year to
                                           to 30 June  to 30 June  31 December
                                                 2003        2002         2002
                                                   £m          £m           £m

Profit for the period                            34.2        30.1         55.4
Currency translation differences                 (5.4)        2.9          1.3
Total recognised gains and losses for the    
period                                           28.8        33.0         56.7


There is no material difference between the profit before taxation and the
retained profit for each period as shown in the Group profit and loss account
and their historical cost equivalent


                                               6 months   6 months     Year to
                                             to 30 June to 30 June 31 December 
                                                   2003       2002        2002
                                                     £m         £m          £m

Profit for the period                              34.2       30.1        55.4
Dividends                                         (21.2)     (21.1)      (54.6)
                                                   13.0        9.0         0.8

Previously written off goodwill taken through    
profit & loss account in arriving at the profit
for the period                                        -          -        33.3
Other recognised gains and losses relating to  
the period                                         (5.4)       2.9         1.2
New ordinary share capital issued                   1.1        0.6         1.9
Net increase in shareholders' funds for the    
period                                              8.7       12.5        37.2
Shareholders' funds at start of period            527.9      490.7       490.7
Shareholders' funds at end of period              536.6      503.2       527.9


 1.  Segmental Analysis

                                  Turnover                          Operating Profit
                        -----------------------------        -----------------------------
                        6 mths     6 mths      Year          6 mths     6 mths      Year
                            to         to        to              to         to        to
                       30 June    30 June    31 Dec         30 June    30 June    31 Dec
                          2003       2002      2002            2003       2002      2002
                            £m         £m        £m              £m         £m        £m
                        -----------------------------        -----------------------------
(i)  by activity:

     before goodwill amortisation and rationalisation/restructuring
     Fluid Controls        362        322       661            36.6       29.6      65.2
     Severe Service         80         69       148             8.1        7.4      17.3
     Fluid Power           205        190       379            17.4       12.2      25.3
     Indoor Climate         77         63       134            11.1       10.0      22.6
     Retail Dispense       222        223       437            19.2       22.4      42.3
     Beverage Dispense     149        174       312            12.9       17.5      28.6
     Systems                73         49       125             6.3        4.9      13.7
     Building Products     196        193       365            18.2       18.5      33.5
                           780        738      1463            74.0       70.5     141.0
     SSAP24 pension  
     credit                                                       -        2.5       5.0
     Total continuing     
     operations            780        738      1463            74.0       73.0     146.0

     after goodwill amortisation and rationalisation/restructuring
     Fluid Controls                                            33.3       23.7      46.7
     Severe Service                                             7.3        7.2      16.8
     Fluid Power                                               15.5        7.6       9.8
     Indoor Climate                                            10.5        8.9      20.1
     Retail Dispense                                           17.6       14.5      26.5
     Beverage Dispense                                         12.4       10.2      14.4
     Systems                                                    5.2        4.3      12.1
     Building Products                                         11.2       10.5      18.5
                                                               62.1       48.7      91.7
     SSAP24 pension credit                                        -        2.5       5.0
     Total continuing      
     operations                                                62.1       51.2      96.7

                                                     Operating Assets
                                          6 mths          6 mths          Year
                                              to              to            to
                                         30 June         30 June        31 Dec
                                            2003            2002          2002
                                              £m              £m            £m
by activity:

Fluid Controls                               237             265           221
Severe Service                                29              32            48
Fluid Power                                  171             194           154
Indoor Climate                                37              39            19
Retail Dispense                              123             130           109
Beverage Dispense                             95             109            82
Merchandising Systems                         28              21            27
Building Products                            144             160           143
                                             504             555           473
SSAP24 pension credit
Total continuing operations                  504             555           473

                               Turnover                      Operating Profit
                   ------------------------------     -----------------------------
                    6 mths     6 mths      Year        6 mths     6 mths      Year
                        to         to        to            to         to        to
                   30 June    30 June    31 Dec       30 June    30 June    31 Dec
                      2003       2002      2002          2003       2002      2002
                        £m         £m        £m            £m         £m        £m
                   ------------------------------     -----------------------------
(ii) by

     after goodwill amortisation and rationalisation/restructuring
       UK              239        221       436          15.6       13.7      20.8
       Rest of Europe  258        236       470          29.7       20.4      40.8
       Americas        254        252       501          14.6       12.5      24.5
       Pacific          29         29        56           2.2        2.1       5.6
     SSAP24                                                 -        2.5       5.0
                   ------------------------------     -----------------------------
     operations        780        738      1463          62.1       51.2      96.7
                   ------------------------------     -----------------------------

                                                       Operating Assets
                                            6 mths         6 mths         Year
                                                to             to           to
                                           30 June        30 June       31 Dec
                                              2003           2002         2002
                                                £m             £m           £m
by geographical origin:

  UK                                           150            183          159
  Rest of Europe                               199            208          171
  The Americas                                 138            150          129
  Asia/Pacific                                  17             14           14
  SSAP24 pension credit
Total continuing operations                    504            555          473

(iii)      turnover by geographical destination:

                                              6 mths       6 mths         Year
                                                  to           to           to
                                             30 June      30 June       31 Dec
                                                2003         2002         2002
                                                  £m           £m           £m
           UK                                    219          203          393
           Germany                                90           82          163
           Rest of Europe                        172          155          311
           USA                                   222          224          438
           Asia                                   41           44           80
           Rest of World                          36           30           78
           Total continuing operations           780          738         1463

1. Segmental Analysis (continued)


   Acquisitions in the period were not sufficiently material that they warrant
   separate disclosure on the face of the Profit and Loss account. Of the reported
   increase in turnover and operating profit of continuing operations, £39m and
   £2.6m respectively result from the 2003 acquisitions of Commtech Group (Indoor
   Climate) and Fluid Kinetics (Severe Service) together with the extra months from
   the 2002 acquisitions of DCI Marketing (Merchandising Systems) and STI (Severe


   The amounts shown for discontinued operations in 2002 comprise the turnover and
   operating profits of the businesses sold (Eley, Copper Fittings and Copper Tube,
   all previously reported within Building Products and UK and Rest of Europe)
   and closed (ISI Systems, previously reported within Fluid Power and Americas
   and Rest of Europe).


   Rationalisation/restructuring is analysed as follows:

                                              6 months to  6 months to    Year to
                                                   30 Jun       30 Jun     31 Dec
                                                     2003         2002       2002
                                                       £m           £m         £m
   Shown as rationalisation/restructuring of          
   continuing operations                              2.4         13.4       31.3
   Included within discontinued operations              -          0.7        0.9
   Total rationalisation/restructuring charge         2.4         14.1       32.2

2. Taxation

   The effective tax rate for the year on profit before goodwill amortisation and
   exceptional items is expected to be around 33% (year 2002: 32%).

3. Dividends

   The Directors have declared an interim dividend for the current year
   of 6.0p per share (2002: 6.0p) which will be paid on 20 October 2003 to
   shareholders on the register on 19 September 2003.

4. Earnings per share

   The weighted average number of shares in issue during the period was 352.4m,
   353.2m diluted for the effect of outstanding share options (six months to 30
   June 2002: 351.6m, 352.9m diluted). Earnings per share have been calculated on
   earnings of £34.2m, (2002: £30.1m). The Directors consider that adjusted
   earnings per share figures, using earnings as calculated below, give a more
   meaningful indication of the underlying performance.

                                          6 months to  6 months to      Year to
                                               30 Jun       30 Jun       31 Dec
                                                 2003         2002         2002
                                                   £m           £m           £m
   Profit for the period                         34.2         30.1         55.4
   Goodwill amortisation                          9.5          8.4         18.0
   Exceptional items (after tax)                    -         (4.1)        (7.2)
   Rationalisation/restructuring (after tax)      1.6          9.6         21.9
   Earnings for adjusted EPS                     45.3         44.0         88.1

5. Exchange rates

   The profit and loss accounts of overseas subsidiaries are translated
   into sterling at average rates of exchange for the period, balance sheets are
   translated at period end rates. The main currencies are:

                 Average period rates                  Balance sheet rates
           ----------------------------------   -------------------------------------
            6 months to 30 June        Year         30 June      30 June     31 Dec
               2003        2002        2002            2003         2002       2002
           ----------------------------------   -------------------------------------

   Euro        1.46        1.61        1.59            1.44         1.54       1.53
   US Dollar   1.61        1.45        1.51            1.65         1.52       1.61

6. Financial information

   This interim statement has been reviewed by the Group's auditors having regard
   to the bulletin Review of Interim Financial Information, issued by the Auditing
   Practices Board. A copy of their unqualified review opinion is attached.

   The comparative figures for the year ended 31 December 2002 are not the
   Company's statutory accounts for that financial year. Those accounts have been
   reported on by the Company's auditors and delivered to the Registrar of
   Companies. The report of the auditors was unqualified and did not contain a
   statement under Section 237(2) or (3) of the Companies Act 1985.

   The Interim Report will be posted to shareholders on 12 September 2003 and will
   be available from the same date at the Company's registered office, Lakeside,
   Solihull Parkway, Birmingham Business Park, Birmingham, B37 7XZ.


Our next trading update will be issued on 19 December 2003.


Enquiries to:
Graham Truscott      Communications Director          Tel: 0121 717 3712

Press release available on the internet at

Issued by:
Nick Oborne          Weber Shandwick Square Mile      Tel: 0207 067 0700

Independent review report by KPMG Audit Plc to IMI plc


We have been engaged by the company to review the financial information set out
on pages 7 to 13 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be

Review work performed

We conducted our review in accordance with guidance contained in Bulletin
1999/4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.

KPMG Audit Plc
Chartered Accountants
8 September 2003

                      This information is provided by RNS
            The company news service from the London Stock Exchange
IR NKAKKBBKKPCK                                                                                                                                                                                                                                             

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