Preliminary results, year ended 31 December 2019

 

Adjusted1

Statutory

Continuing operations:

20195

2018

Change

Organic6

2019

2018

Change

Revenue

£1,873m

£1,907m

-2%

-3%

£1,873m

£1,907m

-2%

Operating profit2

£266m

£266m

0%

-3%

£204m

£232m

-12%

Operating margin2

14.2%

14.0%

+20bps

 

 

 

 

Profit before tax

£251m

£251m

0%

 

£189m

£213m

-11%

Basic EPS3

73.2p

73.2p

0%

 

57.6p

62.5p

-8%

Operating cash flow4

£299m

£222m

+35%

 

 

 

 

Dividend per share

41.1p

40.6p

+1%

 

 

 

 

Net debt

£438m

£405m

 

 

 

 

 

1 Excluding the effect of adjusting items as reported in the income statement.
2 Operating profit and margin in 2018 excludes £0.8m non-adjusting restructuring costs.
3 Statutory amounts for Basic EPS include both continuing and discontinued operations.
4 Operating cash flow, as described in note 9.
5 Including IFRS 16 and notional rent accounting changes, see note 1 for further details.
6 Change shown after adjusting for exchange rates and excluding the impact of acquisitions and disposals and lease accounting changes (see note 1).

Key points

  • Results ahead of market expectations.
  • Profit improvement initiatives help 60bps second half margin improvement.
  • Operating cash flow 35% higher than 2018.
  • £27m rationalisation savings for 2019, ahead of expectations.
  • Final dividend increased 1%, making a 1% increase for the full year.
  • Structural re-organisation plans progressing well.
  • Rationalisation charges for 2020 expected to be c.£45m; savings c.£25m.
  • Commercial cultural shift driven by Growth Accelerator gaining traction.
  • New customer-focused organisational structures bedding-down well.

Lord Smith of Kelvin, Chairman, commented:

“2019 was a year of significant change and progress at IMI. We delivered results ahead of market expectations whilst simultaneously formulating and launching a new strategy for the Group led by our new Chief Executive, Roy Twite. Those plans are both ambitious and achievable and will ultimately deliver improved and sustainable value for our shareholders and wider stakeholders. We are already seeing the benefits from our early actions impacting our results. Finally, we continue to have a strong balance sheet and inherently cash generative operations which provide the resources to invest in organic development and appropriate acquisition opportunities as they arise.”

Roy Twite, Chief Executive, added:

“I’m delighted to report good results for 2019, given the anticipated market headwinds. The businesses have made immediate progress with their profit improvement initiatives, resulting in margins for the Group improving in the second half and full year. We have also made a solid start in the pursuit of a new purpose: Breakthrough Engineering for a better world. Each division has taken decisive steps in their long-term, strategic plans to create tremendous value by solving key industry problems and working with the best.”

“It is difficult to predict the ultimate impact the coronavirus will have on global supply chains and demand. Based on no worsening of the current situation, we expect first half organic revenues to be lower than the first half of 2019, given the end market weakness in the Factory Automation and Commercial Vehicle sectors. Our continuing business improvement initiatives are expected to enable us to maintain our margins in the first half of the year.”

Enquiries to:

John Dean

IMI

Tel: +44 (0)121 717 3712

Suzanne Bartch / Gayden Metcalfe

Teneo

Tel: +44 (0)20 7420 3189

A live webcast of the analyst meeting taking place today at 08:30am (GMT) 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 7 May 2020.

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