Delivering results "in line with expectations" is probably all engineering group IMI (IMI) can hope for right now. The company's shares rose by just over 3 per cent on the back of half-year numbers, as group revenues was held fairly flat despite ongoing volatility across the global energy markets.
Chief executive Mark Selway expects the group to meet full-year forecasts: in his words, the impact of the recent EU referendum should only have a "modest" transactional effect, and an overreliance on domestic business isn't a concern as the group only generates 6 per cent of sales in the UK. Annual figures should also benefit from the usual seasonal second-half bias.
To sum up, the precision engineering division is still struggling in North America, although there are signs of improvement in China. The hydronic engineering division, for which European residential and commercial markets are still the most important, is also battling subdued trading conditions - a consistent bugbear for the past few years. Revenues for the latter were flat, with operating profits down from £23.8m to £21.4m. However the outlook is more positive for this segment; revenues and margins should both perform better in the second half against 2015 comparative figures.
Prior to these results, analysts at Numis expected pre-tax profits of £185m for the year ending December 2016, giving EPS of 51.4p, compared with £219m and 62.2p in 2015.
| IMI (IMI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,056p | MARKET VALUE: | £2.87bn | |
| TOUCH: | 1,056-1,057p | 12-MONTH HIGH: | 1,090p | LOW: 717p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 199p* | NET DEBT: | 57% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 772 | 87.1 | 28.4 | 13.9 |
| 2016 | 763 | 70.1 | 19.4 | 14.0 |
| % change | -1 | -20 | -32 | +1 |
Ex-div: 11 Aug Payment: 16 Sep *Includes intangible assets of £512m, or 188p a share | ||||
