Orders and margins improving at IMI

22nd Apr 2010 07:53

It's been only seven weeks since it announced its preliminary results but since then the outlook for the first half of 2010 has improved substantially for engineer IMI.The company has seen a higher than anticipated level of orders in its Fluid Power division in the first four months of 2010, while most of the group's divisions have seen "strong margin progression" in 2010 compared to a year earlier.Earnings per share (EPS) at the interim stage are expected to be in the region of 27-29p, compared to EPS of 18.5p at the half year stage of 2009.Segmental operating margins are expected to expand to around 15%, up from 10.9% in the first half of 2009."Overall revenues, which are broadly flat in the first quarter on a constant currency basis, are likely to finish the first half 3-4% ahead of last year, with a 25% growth in Fluid Power more than offsetting the expected 11-13% reduction in the later cycle Severe Service business," the company said.Despite the upturn in volumes the group remains cautious over the likelihood of the momentum continuing into the second half of the year, though it is more sure of the permanence of the improved margins, as it is underpinned by "a strong programme of cost reduction initiatives."Net debt at the end of March stood at £168m, almost half the £327m of debt the company had at the end of March 2009 and £4m lower than debt at the end of 2009.