IMI (IMI) posted half-year results that were slightly in advance of analyst expectations, but trading conditions across the engineering group’s markets are still posing challenges. The latter point was borne out by flat organic revenues, at fixed currencies, and a 3 per cent decline in underlying operating profit. Statutory revenue was aloft on £85m in favourable currency translations, though any benefits on that score weren’t immediately obvious in operating cash flow, essentially flat on the 2016 comparative, and held in check by increased working capital commitments on the back of improved trading.
The impact of initiatives taken under the five-year strategic plan is becoming ever more apparent. The underlying trading margin has firmed up, if you ignore £4.2m in property sales in the comparative period. Management point to “improved inventory management” and “consistently good debtor management”, though you might assume otherwise given a cursory glance at the balance sheet. However, the snapshot at the end of June is a pointer to seasonal trading, weighted to the second half.
These figures convinced analysts at JPMorgan Cazenove to increase their forecasts for the December year-end to £239m in adjusted profits and EPS of 64.1p, against £224m and 59.8p in 2016.
| IMI (IMI) | ||||
| ORD PRICE: | 1,214p | MARKET VALUE: | £ 3.30bn | |
| TOUCH: | 1,214-1,215p | 12-MONTH HIGH: | 1,325p | LOW: 900p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 213p* | NET DEBT: | 55% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 763 | 70.1 | 19.4 | 14.0 |
| 2017 | 848 | 88.6 | 27.2 | 14.2 |
| % change | +11 | +26 | +40 | +1 |
| Ex-div: | 10 Aug | |||
| Payment: | 15 Sep | |||
| *Includes intangible assets of £516m, or 190p a share | ||||
