Join our community of smart investors

IMI braces for tricky first half

The engineering group is lowering expectations amidst macroeconomic uncertainty
March 1, 2019

IMI (IMI) has warned that the first half of 2019 will bring lower organic revenues than last year’s comparable period, owing to the phasing of its critical engineering order book and slowing market demand in industrial automation for its precision engineering outfit.

IC TIP: Hold at 955p

Outgoing chief executive Mark Selway said that revenues would be split across the year by a ratio of around 45:55. In addition to the automation slowdown, the precision engineering division, which has around £100m in trade with Europe, is also threatened by the potential impact of a ‘no-deal’ Brexit, according to Mr Selway. Overall, IMI has built up additional inventories that would last the group for around six weeks. The lead time for the group’s critical engineering group is around 12 months, so any impact will be felt less felt here.

Broker JPMorgan Cazenove forecasts full-year 2019 earnings per share of 63p, against 62.4p in the prior year.

IMI (IMI)    
ORD PRICE:955pMARKET VALUE:£ 2.6bn
TOUCH:954-956p12-MONTH HIGH:1,268pLOW: 868p
DIVIDEND YIELD:4.3%PE RATIO:15
NET ASSET VALUE:245p*NET DEBT:61%
Year to 31 DecTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20141.6924669.237.6
20151.5716344.738.4
20161.6616548.338.7
20171.7518159.839.4
20181.9121362.540.6
% change+9+18+5+3
Ex-div:04 Apr   
Payment:17 May   
*Includes intangible assets of £607m, or 223p per share