IMI full year profit slumps amid tough trading

FTSE 250 engineering group reported a 34% slump in 2015 pre-tax profit as revenue declined amid tough trading conditions in many of its markets, as clients scaled back orders.

For the year ended 31 December, pre-tax profit fell to £163m from £246m on revenue of £1.56bn, down 8% from £1.69bn. Organic revenue dropped 5%.

Operating profit slid 20% £239m, basic earnings per share were down 20% to 62.2p and the company’s operating margin fell 230 basis points to 15.4%.

IMI said currency impact reduced revenue by £72m and operating profit by £13m.

Still, IMI said it was recommending the final dividend be upped by 2% to 24.5p, bringing the total dividend for the year to 38.4p from 37.6p in 2014.

Chief executive Mark Selway said: “We made steady progress on a number of fronts despite tough trading conditions in many of our markets. Our financial results were broadly in line with market expectations and we made substantial progress across a range of our strategic initiatives which have improved our operational performance and enhanced our market competitiveness.”

The company said that based on current market conditions and on an organic constant currency basis, it expects first half revenues to reflect a similar percentage reduction to that experienced in the full year of 2015.

It expects margins to be around 250 basis points lower than the first half of 2015 due to reduced sales volumes.

However, the group expected to see some improvement to revenues and margins in the second half of 2016 as the benefits of its restructuring activities kick in.