IMI revenues rise 6%, severe service orders 2%

Global engineering group IMI has this morning provided a trading update for the first ten months of the year. In its own words, "current trading remains broadly unchanged from that set out in the interim results announcement in August."

Furthermore, and even while the company admits that, "the macroeconomic environment continues to be uncertain," it also believes that the company is well placed to capitalise on the favourable trends in clean fuel, energy efficiency, environmental control and healthcare expenditure.

In adjusted terms, and on an organic basis, revenues in the first ten months of the year were up by 6% and by 10% on an 'as reported' basis.

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The company has also confirmed market expectations for its full year EPS on the basis of current trading patterns. As well, it calls attention to its strong cash generating ability and says that it expects to finish the year with a "significant reduction" in its levels of net debt as compared to its position at the half-year (allowing for the acquisition of THJ).

By business lines, and in organic terms, revenues grew 4% in beverage dispensing, 1% in merchandising, 12% in fluid power (apparently in line with the growth rate which some analysts have penciled in for the year), 2% in indoor climate and another 1% in severe services.

In its fluid power segment the firm expects to see a slowdown in its European commercial vehicle business, as has already been reported by some key customers, but adds that activity levels in North America remain strong, highlighting its innovative solutions for helping clients meet emissions standards.

In severe services meantime, IMI reports an adverse impact from the disaster at Fukushima on clients' orders in the nuclear segment, as they cancel or defer upgrade and maintenance programmes. Also of interest, margins are expected to decline slightly in the second half due to higher than expected operational costs at its new facility in Brno.

Orders, which according to analysts is what matters most in this division, were up 2% for the ten months to October and the order book at the end of October was 16% higher than at the same point last year.

As of 8:34AM shares of IMI are falling 4% to 762.5p in London trading.

AB