Invensys poised to bow out

Despite a slight contraction in sales, Invensys was able to book a 4 per cent rise in adjusted operating profits to £57m primarily on the back of cost savings from the group reorganisation that followed the sale of Invensys Rail to German industrial conglomerate Siemens. It was that sale which buoyed Invensys' bottom line to the tune of £1.4bn, but it also enabled the group to plug a £400m deficit in its pension scheme, while funding a 76.7p a share one-off cash return to shareholders. However, the group is not permitted to declare an interim dividend for 2013 unless the scheme governing the Schneider deal becomes effective on or after 3 February 2014.

The prospective owners can draw encouragement from the continued growth of Invensys' software segment, where revenues were up by 11 per cent on a constant exchange rate. True, a change in the sales mix reduced the software's half-year contribution at the operating level, but the squeeze is expected to reverse during the second half due to an increased proportion of higher-margin licence revenues. A favourable change in the sales mix boosted profits at Invensys' industrial automation segment by 5 per cent, although continued capital demands linked to Chinese nuclear contracts meant that this segment was chiefly responsible for the group's £23m half-year cash outflow.