IMI 'resilient' as revenue falls, earnings improve

Engineering firm IMI reported a 3% fall in adjusted revenue in its preliminary results on Friday, to £1.83bn, as it described its organic revenue for 2020 as “resilient”, being 4% lower year-on-year.

The FTSE 250 company said its adjusted operating profit for the year ended 31 December was 7% higher than in 2019 at £285m, as its operating margin improved 140 basis points to 15.6%.

Its adjusted profit before tax came in at £274m, up 9% over the prior year, while adjusted basic earnings per share were also 9% higher, at 79.7p.

Adjusted operating cash flow was £335m for 2020, rising from £299m in 2019, and the company’s net debt narrowed to £316m, from £438m at the end of the previous year.

The board declared a final dividend of 15p per share, making for a total distribution for the year to 22.5p, down from 41.1p and reflecting the previously-announced reset of its earnings cover baseline.

On the operational front, IMI reported improved margins across all three of its divisions, as its structural rationalisation programmes delivered efficiency gains as expected.

The company said its “cultural shift” was progressing well, with increased resources being dedicated to growth, adding that it had retained “strong” customer and employee engagement throughout the Covid-19 pandemic.

“2020 has been an extraordinary year in which IMI has demonstrated resilience, ambition and absolute commitment to supporting our customers and our wider communities,” said the company’s chairman, Lord Smith of Kelvin.

“There is little question that significant drivers of our recent performance have been our unifying and empowering purpose ‘breakthrough engineering for a better world’, as well as a rejuvenated culture.

“It is the way in which these results were delivered that is particularly encouraging and bodes well for continuing improvement. “

Roy Twite, chief executive officer, added that all three of IMI’s divisions advanced their strategic initiatives and delivered “resilient results” in a tough year.

“Margins have improved and our culture change and growth initiatives are gaining traction,” Twite explained.

“IMI has also advanced its environmental, social and governance agenda as we work to build on the positive contribution our solutions make to the wider world.

“We expect further progress during 2021.”

At 0822 GMT, shares in IMI were down 0.97% at 1,323p.