Growth was undeniably modest at IMI (IMI) last year and the first half of 2013 will also be subdued, says management. However, a £175m share buy-back programme and the decision to hive off most of its merchandising division sent the valve maker's share price up 4 per cent to a record high.
Having shifted the beverage displays business into the drinks machine division, chief executive Martin Lamb has fattened up what's left of the merchandising operation for sale. It made an operating profit of £19.4m in 2012 on revenue of £147m and the business, which makes bespoke displays for shops, mainly in the US, could fetch up to £170m, according to City estimates. Given past interest, Mr Lamb expects a deal by the year-end.
Even after buying back shares IMI will have money for acquisitions. Recent purchases - Remosa and Zimmermann & Jansen - helped ramped up sales in the Far East by 25 per cent to £398m last year, and IMI also wants to increase revenue from its so-called sweet spot in fluid technology from 58 per cent of revenue to three-quarters within five years.
Broker Numis Securities expects underlying pre-tax profit of £381m in 2013, giving underlying EPS of 88.1p (up from £366.3m and £84.3p last year).
IMI (IMI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,311p | MARKET VALUE: | £4.22bn | |
| TOUCH: | 1,310-1,312p | 12-MONTH HIGH: | 1,370p | LOW: 764p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 18 | |
| NET ASSET VALUE | 198p* | NET DEBT: | 21% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.90 | 176 | 35.4 | 20.7 |
| 2009 | 1.79 | 186 | 40.8 | 21.2 |
| 2010 | 1.91 | 306 | 66.4 | 26.0 |
| 2011 | 2.13 | 301 | 63.2 | 30.0 |
| 2012 | 2.19 | 317 | 72.6 | 32.5 |
| % change | +3 | +5 | +15 | +8 |
Ex-div: 10 Apr Payment: 20 May *Includes intangible assets of £545m, or 169p a share | ||||
