Chief executive Mark Selway is a man on a mission to enhance IMI's (IMI) efficiency and long-term growth potential. Unfortunately, this costly process has been hampered somewhat by a lacklustre trading environment.
Strip out one-off expenses, including the £27.1m poured into the latest batch of restructuring measures, and operating profit fell by a fifth to £239m. Lower volumes in the group's core units were blamed mainly on the economic slowdowns in China and Brazil, which have weighed on global capital spending.
IMI's critical engineering business, which specialises in flow control solutions designed to help energy and process industries operate safely and more efficiently, struggled most. Against a backdrop of weak industrial production, the lower oil price sent petrochemical orders down 42 per cent. To make matters worse, post-Fukushima investment in nuclear power remains depressed, so much so that orders here plummeted 76 per cent in the reported period.
But judging by the share price reaction investors didn't seem fazed by these poor numbers. This is probably due in part to some early signs that management's 'lean' initiatives are starting to have the desired effect, with cash generation up 25 per cent.
Analysts at Numis are forecasting adjusted EPS of 51.4p this year, down from an estimated 62.2p in 2015.
| IMI (IMI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 876p | MARKET VALUE: | £2.4bn | |
| TOUCH: | 876-876.5p | 12-MONTH HIGH: | 1,428p | LOW: 717p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 201p* | NET DEBT: | 40% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 2.13 | 301 | 63.2 | 30.0 |
| 2012 | 1.69 | 230 | 67.9 | 32.5 |
| 2013 | 1.74 | 249 | 71.0 | 35.3 |
| 2014 | 1.69 | 246 | 69.2 | 37.6 |
| 2015 | 1.57 | 163 | 44.7 | 38.4 |
| % change | -7 | -34 | -35 | +2 |
Ex-div: 7 Apr Payment: 20 May *Includes intangible assets of £457m, or 168p a share | ||||
