IMI shares fall as it posts drop in organic revenue; warns on full year

7th May 2015 08:10

Shares in British engineering company IMI fell sharply on Thursday after it reported a 4% drop in first-quarter organic revenue, partly as a result of sterling strength against the euro.It said that market conditions have continued to be challenging and based on the performance year to date, organic group revenues and margins in the first half will be lower than in the same period last year.The company expects to see an improved performance in the second half, although both organic revenue and margins for the full year are likely to be slightly below last year, it said."Markets are proving more challenging than expected and order intake in the first quarter has been slower with some projects being delayed into the second quarter," said the company. Numis Securities said that group chief executive Mark Selway has made some major changes internally with manufacturing restructuring, investment in IT and new product development."The question is when and how this will translate to the bottom line. Until we see some greater evidence of this happening, particularly in the key Precision Engineering division, we retain a degree of caution over the stock on the current multiple," said Numis, which rates the stock at 'hold'.