IMI's Q1 revenue falters amid 'mixed' trading conditions

IMI reported a drop in first-quarter revenue on Thursday as the company said it suffered a continuation of the mixed trading conditions experienced in the final quarter of 2018.

Excluding the impact of acquisitions and exchange rate movements, the specialist engineering company's organic revenues for the first three months of the year were 2% lower when compared to the same period last year, though revenues were 1% higher on an adjusted basis due to a modest exchange rate tailwind and the benefit of the Bimba acquisition.

Consequently, first-half organic revenue is expected to be lower than last year due to the phasing of the Critical Engineering division's order book and slowing market demand in the Industrial Automation sector in Precision Engineering, with its revenue having dropped 3%.

The company now expects Precision Engineering's organic revenues and margins in both the first half and full year to be slightly lower than the comparable periods in 2018.

However, IMI said it still expects Critical Engineering's full-year results to reflect the benefits of ongoing restructuring and comparably stronger Aftermarket sales, with "strong" first-quarter order intake having included an 11% increase in Aftermarket bookings.

Organic revenue in the Hydronic Engineering division is also expected to grow in the first half and the full year as they reflect the benefits of business improvement initiatives and a regular second-half bias, with first-quarter revenues already 8% higher on an organic basis and 7% higher on an adjusted basis.

IMI's shares were down 2.94% at 984.20p at 0833 BST.