TIDMIMI
RNS Number : 9837V
IMI PLC
09 November 2017
9 November 2017
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 2017. Unless otherwise indicated, comparatives
reflect results on an organic constant currency basis.
Current trading and outlook
Progress with the Group's strategic initiatives continues and
expectations for the year are slightly ahead of market
estimates.
During the third quarter economic and market conditions have
continued to be mixed. Organic revenues were 3% higher in the third
quarter than the same period last year and, reflecting the benefit
from foreign exchange movements, were 11% higher.
As previously indicated, organic revenues and margins in the
second half are expected to improve when compared with the first
half of 2017. Adjusted constant currency earnings per share for the
full year are likely to be slightly ahead of the expectations
outlined at the Group's 2017 interim results.
Strategic progress
Despite mixed market conditions, our various initiatives to
harness the Group's potential continue to progress 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.
The business continues to successfully implement cost-reduction
activities on time and on budget that support the near term
financial results, whilst also supporting our long-term strategic
agenda.
IMI Critical Engineering
In the nine months to September, Critical Engineering order
intake was 4% higher than the previous year. In the third quarter,
the expected 13% decline in orders included New Construction and
Aftermarket which were 20% and 6% lower respectively, when compared
with the same period last year. Parts orders were 1% higher in the
period.
The value of the division's order book at the end of September
2017, at GBP544m, was 2% below the same point last year and
includes GBP100m of orders won through Value Engineering, with
margins now comparable to the prior year also reflecting an
improved Aftermarket order book.
As expected, organic revenues were 4% lower year to date and in
the three months to the end of September were 6% lower compared
with the same period last year. On a reported basis revenues were
2% higher in the quarter.
As detailed in the Group's 2017 interim results, in the second
half of the year, organic revenue is still expected to be weaker
than the second half of last year. Full year margins are expected
to show a modest improvement on 2016 - and a significant
improvement on the first half of this year - due to the benefits of
the division's reorganisation activities and phasing of the order
backlog.
IMI Precision Engineering
Precision Engineering organic revenues in the three months to
the end of September were 9% higher compared to the same period
last year and on a reported basis were 18% higher.
Sales in Industrial Automation were 11% higher when compared to
the third quarter of 2016, with growth across all three regions.
Contrary to previous market expectations of continuing decline,
Commercial Vehicle sales have been stronger in both Europe and
North America. 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, on a constant currency basis, organic
revenues and margins are expected to improve when compared with the
second half of last year reflecting the benefits of ongoing cost
reduction and improved market conditions.
IMI Hydronic Engineering
Hydronic Engineering organic revenues in the three months to the
end of September were 3% higher compared to the same period last
year and 12% higher on a reported basis.
Underlying conditions across our key European markets remain
mixed and 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, on a constant currency basis, we expect
revenue growth to show some improvement when compared to the first
half of the year. Margins will be slightly lower than the second
half of last year due to increased costs associated with our
investments for growth.
Exchange rates
As detailed in the Group's 2017 interim results, IMI's financial
results are being favourably impacted by the effects of exchange
rate movements compared to 2016, 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 6% on both revenues and profits.
Preliminary results
IMI will issue its preliminary results announcement in respect
of the year ending 31 December 2017 on 2 March 2018.
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: 2386128.
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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