IMI posts 1pc rise in profits and anticipates 'good progress' in 2013 - UPDATE

22nd Aug 2013 07:22

A boost to Severe Service orders helped engineering giant IMI deliver a modest rise in half year profits, figures out Thursday revealed. The group posted a one per cent rise in adjusted pre-tax profit at £170.1m (2012 H1: £168.3m) on broadly flat revenues of £1.09bn, as had been widely expected. On an organic basis, after adjusting for the acquisitions in February 2012 and for exchange rate movements, revenues were down 3%.Reported operating profit was up 5% at £162.2m (2012: £155.1m), while basic earnings per share rose four per cent on an adjusted basis, from 38.2p to 39.6p, and eight per cen on a reported basis, from 32.3p to 34.9p. In welcome news to shareholders, the company said it continued to "anticipate better trading conditions in the remainder of the year" and reported "good progress" with its growth agenda. The dividend was given an eight per cent boost from 11.8p to 12.8p, based in part on its expectations for the second half. Roberto Quarta, the Chairman of IMI, said: "The group has delivered another set of positive results with growth in profit and underlying earnings per share. In particular, Severe Service delivered a strong performance with orders up and margins showing a healthy improvement year-on-year. "We also made good progress with our growth agenda launching several new products and continuing to improve our operational efficiency which will help drive future margin momentum. "We continue to anticipate better trading conditions in the remainder of the year. In addition, we expect the group to benefit from an improving sales mix and an increasing contribution from the recently launched new products. "Overall, we remain confident that the group will deliver good progress in 2013. Reflecting this confidence the board has increased the interim dividend by 8%." Divisionally, bookings momentum in Severe Service was "particularly encouraging" in both the Oil & Gas and Petrochemical markets, which the group said "bodes well for future prospects". In line with expectations, margins improved in the first half to 15.2% compared to 14.0% in the first half of 2012. As had been anticipated, the Fluid Power division was affected by a weaker market for commercial vehicles, while the Indoor Climate business continued to rely on its more resilient refurbishment activity given the ongoing depressed market for new commercial construction in Europe. Beverage Dispense markets were weaker than expected as major customers delayed some capital expenditure, while the Merchandising business continued to exhibit strong momentum across most of its end markets. Looking ahead, IMI believes it is "well positioned to accelerate organic revenue growth supported by strong bookings momentum in Severe Service, ongoing new product introductions and continued execution of our strategy to focus more of our business in those end markets which are benefiting most from long-term structural growth trends". NR