TIDMIMI
RNS Number : 2680R
IMI PLC
04 November 2021
4 November 2021
Good Q3 progress prompts increase in full year EPS guidance to
88p to 92p
Growth and profitability initiatives continue to build
momentum
IMI, the specialist engineering company, issues the following
Interim Management Statement, which covers results for the third
quarter from 1 July to 30 September 2021.
Roy Twite, Chief Executive, commented:
"Trading in the third quarter has been somewhat ahead of our
previous expectations and, while markets and supply chains continue
to be volatile, demand into the first few weeks of the final
quarter remains good. We therefore now increase our guidance for
full year EPS to 88p to 92p (from 85p to 90p), subject to no
material change in trading conditions. Our programmes to reduce
complexity, improve customer service, and deliver [ Breakthrough
Engineering for a better world] through accelerated market-led
innovation are progressing at pace. We remain confident in our
ability to deliver over time sustainable, profitable growth,
including the growth and margin ambitions described in our recent
Capital Markets Events."
Current trading
Given the exceptional circumstances of 2020, we continue to
include 2019 detail in this statement. References to organic
changes are on a constant currency basis and exclude disposals and
acquisitions. References to adjusted figures reflect figures as
reported to management which exclude the impact of adjusting
items.
IMI Group Q3 2021 Q3 2021 Q3 2021
vs Q3 2020 vs Q3 2019
Revenue & organic change GBP453m +6% +5%
--------- ------------ ------------
The third quarter of 2021 has delivered another good performance
with Group sales and operating profits both higher organically than
the same period in the prior year and 2019, despite Q3 2020 being
the peak period for ventilator surge sales last year. IMI organic
revenues in the three months to the end of September were 6% higher
than the same period in 2020 and 1% higher on an adjusted
basis.
Our various initiatives to put the customer at the centre of our
organisation, to reduce complexity and to drive growth through
market-led innovation are progressing at pace. We continue to
strengthen our customer relationships and reputation for close
support, especially on those occasions when customers have faced
particular pressures, including in the supply chain.
We constantly monitor rising input costs and remain confident
that our own efficiency improvements and pricing actions will allow
us to absorb any impact, enabling IMI to achieve the further margin
expansion we target - despite the increased levels of investment
for growth.
Outlook
Based on current market conditions we now expect 2021 full year
adjusted EPS to be in the range of 88p to 92p. This guidance
reflects our expected average share position in 2021 of
approximately 267 million shares, resulting from the ongoing share
buyback. IMI remains on track to complete the planned GBP200
million buyback by the end of 2021.
IMI Precision Engineering
IMI Precision Q3 2021 Q3 2021 Q3 2021
vs Q3 2020 vs Q3 2019
Revenue & organic change GBP229m +3% +6%
--------- ------------ ------------
IMI Precision organic revenues in the three months to the end of
September were 3% higher than the same period in 2020 and 2% lower
on an adjusted basis.
Sales in both Industrial Automation and Commercial Vehicle
continued to be strong in the period, which more than offset the
reduction within Life Science as a result of the
Coronavirus-related surge in ventilator components sales in the
prior period. We still expect that this surge will represent a
headwind to full year 2021 results of approximately GBP75m to
GBP80m.
Based on current market conditions, IMI Precision Engineering
2021 organic revenues and margins are still expected to be higher
than in 2020.
IMI Critical Engineering
IMI Critical Q3 2021 Q3 2021 Q3 2021
vs Q3 2020 vs Q3 2019
Order intake & organic change GBP136m +14% -15%
--------- ------------ ------------
Revenue & organic change GBP137m +4% 0%
--------- ------------ ------------
IMI Critical order intake in the three months to the end of
September totalled GBP136m, or 14% above the prior year, but 15%
below the same period in 2019. Year to date, divisional orders
remain 6% higher than prior year, supported by strong Aftermarket
activity across a number of segments.
IMI Critical organic revenues in the three months to the end of
September of GBP137m were 4% higher, and on an adjusted basis were
1% lower, than the third quarter of 2020. The drive to maximise the
Aftermarket opportunity whilst positioning for growth in new,
adjacent segments, is progressing well.
Regarding the 20% to 30% of IMI Critical Engineering that has
been 'under review', after careful consideration the Board has
taken the decision to retain and develop this business. Its
performance has improved significantly over the last 18 months,
supported by the development of upgrade Aftermarket opportunities
within the installed base of products. In addition, the business
has secured early orders in the attractive growth market of liquid
Hydrogen processing, based upon expertise IMI previously developed
and successfully deployed into space propulsion systems. Over time,
there is now a clear path to the achievement of divisional target
returns and long-term growth potential.
Based on the division's order book and current market
conditions, we continue to expect IMI Critical Engineering 2021
organic revenues and margins to be higher when compared to
2020.
IMI Hydronic Engineering
IMI Hydronic Q3 2021 Q3 2021 Q3 2021
vs Q3 2020 vs Q3 2019
Revenue & organic change GBP87m +14% +10%
--------- ------------ ------------
IMI Hydronic revenues in the three months to the end of
September were 14% higher on an organic and 11% higher on an
adjusted basis, when compared to last year. While installer and
distributor catch-up persist as supporting influences on volumes,
underlying demand remains good and the contribution from sales of
new products continues to be positive.
Given current market conditions, IMI Hydronic Engineering's 2021
organic revenues are still expected to be strongly ahead, with
margins also higher, when compared to 2020 .
Coronavirus update
Although in some economies Coronavirus-related pressures are
easing, IMI continues to be vigilant across its operations. The
protection of our employees, our operations and our broader
communities, wherever in the world they may be, remains an absolute
priority. The Coronavirus response team continues to support
employee welfare and help mitigate disruption in our supply chains.
We continue to keep particularly close to our customers, to support
them as they face all such challenges.
Share buyback progress
The programme to buy back IMI shares to an approximate value of
GBP200m has made good progress. As at the end of October, we had
successfully purchased 9.7 million shares, at a cost of
GBP165m.
Exchange rates
The 2021 full year financial results are expected to be impacted
by exchange rates. Should the rates in early November continue for
the remainder of the year, results for both revenue and profits in
the full year would be adversely impacted by 4%-5%.
Preliminary 2021 results
IMI will issue its preliminary results announcement for the year
ending 31 December 2021 on 25 February 2022.
Enquiries to:
John Dean IMI Tel: +44 (0)121 717 3712
Stephen Malthouse Headland PR Tel: +44 (0)7734 956
201
A conference call for analysts and investors will be held at
08:00 GMT today to discuss this statement. To access the call,
please register using the link:
https://www.incommglobalevents.com/registration/client/9139/imi%E2%80%99s-interim-management-statement/
Notes to editors
IMI plc, the specialist engineering company, designs,
manufactures and services highly engineered products that control
the precise movement of fluids. Its innovative technologies, built
around valves and actuators, enable vital processes to operate
safely, sustainably, cleanly, efficiently and cost effectively. IMI
employs around 10,000 people, has manufacturing facilities in 18
countries and operates a global service network. The Company is
listed on the London Stock Exchange. Further information is
available at www.imiplc.com .
IMI plc is registered in England No. 714275. Its legal entity
identifier ('LEI') number is 2138002W9Q21PF751R30.
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