IMI sees weaker profit as sterling strength hits revenue

1st Aug 2014 08:30

First half profits at engineering group IMI were hit by the impact of the strength of sterling on revenue, as anticipated.Turnover fell 3% from £831m to £809m year-on-year, saying foreign exchange movements reduced revenue by £45m. Organic revenue was 3% higher.The operating margin declined by 60 basis points from 17.6% to 17.0%, while adjusted pre-tax profit came in at £127m, down from £134m a year earlier. On a statutory basis, pre-tax profit slumped 9% from £117m to £106m. Despite this, the group lifted the interim dividend by 6% from 12.8p to 13.6p. Chief executive Mark Selway said the second half was expected to deliver an improved rate of organic revenue growth, but that margins were set to be slightly lower compared to the same period last year as it invests in a number of areas to ready the business for accelerated future growth. "IMI has all the ingredients to become a world class business and the leader in its chosen sectors," he continued. "Our strategic plan will ensure that this potential is harnessed and fully exploited to deliver sustainable accelerated top and bottom line growth. "The opportunities are significant and that is reflected in our ambition to double the group's 2014 operating profits over the next five years, while retaining our financial discipline." After initially falling, shares had rise 0.49% to 1,424p by 08:27.NR