IMI earnings to be 'materially higher' than forecast

9th Nov 2009 07:55

Engineer IMI expects earnings this year to come in " materially higher" than previously forecast as higher margins have offset a sharp fall in revenues."We expect operating margins for the second half of the year to be better than previously expected and in excess of 14%. We expect earnings per share for the year as a whole, on an adjusted basis, to be in the region of 43p to 45p per share (2008: 54.1p), of which around 2p per share arises from one-off pension curtailment benefits," the statement said.The higher margins have offset a sharp fall in sales. Group revenues for the ten month period to the end of October are around 18% lower than the corresponding period in 2008, on a constant currency basis. Six week moving average order intake is around 12% lower than last year, reflecting some modest improvement in Asia and North America, and a weakening comparable in the last quarter of 2008, IMI added.Low cost sourcing initiatives and value engineering programs have reduced material prices in the year to date by around 5%. Lower average metal prices have also produced margin benefits, particularly within our Indoor Climate business, IMI said.Additional restructuring willincrease its one-off charges this year to £35m from the £30m previously indicated. We expect earnings per share for the year as a whole, on an adjusted basis,2 to be in the region of 43p to 45p per share (2008: 54.1p), of which around 2p per share arises from one-off pension curtailment benefits.