IMI lifts expectations after decent first half

IMI posted its interim results for the six months to 30 June on Tuesday, with adjusted revenue rising 8% to £915m and adjusted operating profit up 13% to £120m.

The FTSE 250 firm said on an organic basis, revenue was 6% higher.

Its adjusted operating margin improved 60 basis points to 13.1%, while its adjusted profit before tax was ahead 16% at £113m.

Basic earnings per share moved up 16% on an adjusted basis to 32.9p.

The company’s operating cash flow was down 21% year-on-year at £68m, while its net debt widened to £459m from £318m.

Its board declared a dividend per share up 3% at 14.6p.

Looking at its statutory results, revenue was up 8% at £914m and operating profit was up 7% at £101m, while profit before tax was 5% higher at £93m and basic earnings per share rose 1% to 27.4p.

“The recent positive momentum in some of our most important markets continued through the first half of the year,” said chief executive Mark Selway.

“Critical engineering delivered increased revenues, profits and margins through a combination of rationalisation benefits and value engineering.

“Precision engineering generated good sales and margin growth, with strong profit drop through, while hydronic engineering has largely completed the changes necessary to deliver substantially improved margins in the second half of the year.”

Selway said the trading outlook for the group remained “positive”, and in the second half of 2018 the board expected organic revenue and profits to show “good improvement” compared to the same period in 2017.

“The improved results will be supported by market growth in precision engineering, rationalisation benefits in critical engineering and a stronger performance from hydronic engineering.

“Based on current market conditions, we anticipate full year 2018 results will be slightly ahead of current market expectations.”