TIDMIMI
RNS Number : 8019O
IMI PLC
10 November 2016
10 November 2016
IMI plc Interim Management Statement
IMI, the specialist engineering company, issues the following
Interim Management Statement, which covers the third quarter from 1
July to 30 September 2016.
Current trading and outlook
Progress with the Group's strategic initiatives continues and
expectations for the year remain consistent with market estimates.
Based on current exchange rates, IMI's full year sales and profits
are likely to reflect a gain from foreign currency translation of
about 12%.
During the third quarter economic and market conditions have
continued to be challenging. Organic revenues were 8% lower than
the same period last year and, reflecting the benefit from foreign
exchange movements, were comparable on a reported basis.
As previously indicated, organic revenues and margins in the
second half are expected to improve when compared with the first
half of 2016 but will be lower than last year. Adjusted constant
currency earnings per share for the full year remain in-line with
the expectations outlined at the Group's 2016 interim results
presentation.
Strategic progress
Despite difficult market conditions, our various initiatives to
harness the Group's potential are progressing well. We remain
committed to investment in new product development to fuel growth,
improving operational performance to enhance our competitiveness
and investing to modernise our IT infrastructure.
To mitigate where practical the impact of current market
weakness, we are reviewing a number of cost-reduction initiatives.
These actions will support the near term financial results of the
Critical Engineering and Precision Engineering divisions, without
compromising our long-term strategic agenda.
IMI Critical Engineering
Critical Engineering third quarter order input was 12% below the
same period last year with on-going project delays impacting the
phasing of new orders in the period. Lower aftermarket order input
in both the Oil & Gas and Power sectors was principally driven
by continuing oil price weakness and reduced outages and spares
activity in Power. Further project slippage in the market may
impact order intake and revenues through the balance of the
year.
While the value of the division's order book at the end of
September 2016, at GBP509m, was 6% below the same point last year
margins are slightly higher, reflecting the benefits of value
engineering and project mix.
Organic revenues in the three months to the end of September
were 15% lower compared with the same period last year and, on a
reported basis, were down 8%. Revenues in the quarter reflected an
11% reduction in aftermarket activity and an 18% reduction in new
construction.
As previously outlined, 2016 organic revenues and profits will
be significantly improved in the second half compared to the first
half and we continue to expect second half margins to reflect a
good improvement over the first half of the year.
IMI Precision Engineering
Precision Engineering organic revenues in the three months to
the end of September were 3% lower compared to the same period last
year and on a reported basis were 4% higher.
Sales in Industrial Automation were 4% lower when compared to
the third quarter of 2015, with growth in the Americas offset by
softer markets in Europe and Asia. While Commercial Vehicle sales
remained comparatively good in Europe, sales in North America and
Brazil continued the significant deterioration that was experienced
in the first half of the year. The Energy sector continued to be
impacted by lower oil prices while both Life Sciences and Rail
delivered growth in the quarter.
In the second half, organic revenues are expected to be slightly
lower than the second half of last year with margins broadly
equivalent to the same period last year.
IMI Hydronic Engineering
Hydronic Engineering organic revenues in the three months to the
end of September were 2% lower compared to the same period last
year and 6% higher on a reported basis.
New construction project delays were evident in China and North
America and the European market has experienced a slow start to the
heating season. Underlying market conditions across Europe remain
mixed. We continue to make good progress with new product
development and operational improvements. Customer and market
reaction to our market-leading new products continues to be
positive.
In the second half, assuming a normal fourth quarter heating
season, we expect organic revenues to be slightly lower with an
associated small decline in margins when compared to the second
half of last year.
Exchange rates
As detailed in the Group's 2016 interim results, IMI's financial
results are being favourably impacted by the effects of exchange
rate movements compared to 2015, and in particular by the weakening
of Sterling against the US Dollar and the Euro. At current rates,
this would translate to an exchange rate tailwind for the full year
of around 12% on both revenues and profits.
Preliminary results
IMI will issue its preliminary results announcement in respect
of the year ending 31 December 2016 on 24 February 2017.
A conference call for analysts and investors will be held at
08:30 GMT today to discuss this statement. To access the call,
please dial: +44 (0)1452 555 566, Toll Free (UK) 0800 694 0257-
Conference call id: 99956484.
Enquiries to:
John Dean IMI Tel: +44 (0)121 717 3712
Suzanne Bartch / Teneo Blue Rubicon Tel: +44 (0)203 757 9239
Gayden Metcalfe
Cautionary Statement:
This Interim Management Statement contains forward-looking
statements which are made in good faith based on the information
available at the time of its approval. It is believed that the
expectations reflected in these statements are reasonable but they
may be affected by a number of risks and uncertainties that are
inherent in any forward-looking statement which could cause actual
results to differ materially from those currently anticipated.
Notes to editors
IMI plc
IMI plc, the specialist engineering company, designs,
manufactures and services highly engineered products that control
the precise movement of fluids. IMI has manufacturing facilities in
more than 20 countries and operates a global service network. The
Company is listed on the London Stock Exchange. Further information
is available at www.imiplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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