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IMI plc Interim Results

29 Jul 2016

Interim results, six months ended 30 June 2016

 

Reported1

 

Statutory

Continuing operations:

2016 H1

2015 H1

Change

Organic4

2016 H1

2015 H1

Change

Revenue

£759m

£765m

-1%

-5%

£763m

£772m

-1%

Operating profit

£96m

£116m

-18%

-23%

£80m

£98m -18%

Operating margin

12.6%

15.2%

-260bps

-290bps

 

 

 

Profit before tax

£86m

£107m

-19%

  £70m £87m -20%

Basic EPS2

24.4p

30.3p

-19%

 

19.4p

28.4p

-32%

Operating cash flow3

£85m

£85m

0%

 

 

 

 

Dividend per share

14.0p

13.9p

+1%

 

 

 

 

Net debt

£334m

£289m

 

 

 

 

 

1Excluding the effect of items reported as exceptional in the income statement
2 Statutory amounts for Basic EPS include both continuing and discontinued operations.
3Operating cash flow, as described in note 10 to the financial statements
4Change shown after adjusting for exchange rates and excluding the impact of acquisitions and disposals.

Key Points

  • Results in line with expectations
  • Good progress against 5-year Strategic Plan
  • Good cash flow and further improvement in working capital
  • Adverse currency impact on net debt of £70m
  • Favourable currency impact on profits expected in the full year
  • Proposed 1% increase in interim dividend

Mark Selway, Chief Executive, commented:

“Despite continuing challenging economic and market conditions in a number of key sectors, we delivered results in line with expectations and continued to make good progress against our strategic plan. In particular, the various initiatives to drive growth including improving operational efficiency, enhancing processes and launching new products are making a difference and our market competitiveness is improving.

Whilst continued volatility is expected, the second half results will benefit from a normal seasonal bias as well as some escalation of benefits accruing from previous reorganisation initiatives. With a broad international manufacturing footprint and less than 6% of sales in the UK, the transactional impact of Brexit is expected to be modest, with the greatest business sensitivities likely to stem from any general shift in business confidence and investment. Our focus remains resolutely on delivering great products and unparalleled support to our customers, notwithstanding any wider uncertainties and distractions.

Based on current market conditions, and on an organic constant currency basis, we expect full year 2016 results will be in line with current market expectations. In the remainder of the year organic revenue is expected to have a comparable percentage reduction to the first half result. Second half margins, supported by improved results in Critical and Precision, together with second half seasonality and new products in Hydronic, are expected to be broadly equivalent to the second half of 2015.

If average exchange rates in the first two weeks of July (US$1.31 and €1.19) remain constant for the balance of the year, both revenue and segmental operating profit would be significantly enhanced in the full year.”

Enquiries to:

John Dean IMI Tel: +44 (0)121 717 3712
Suzanne Bartch / Gayden Metcalfe Teneo Strategy Tel: +44 (0)20 7240 2486

A live webcast of the analyst meeting taking place today at 8:30am (BST) will be available on the investor page of the Group’s website: www.imiplc.com. The Group plans to release its next Interim Management Statement on 10 November 2016.

To read the full press release in Acrobat PDF format please click here.