Invensys rues Chinese nuclear costs but markets see improvement

Rail, power and appliance conglomerate Invensys has seen its order book grow but has taken a hit on cost overruns at its Chinese nuclear projects.

Revenue for the 12 months to the end of March was £2.539bn (2011: £2.486bn), up 2% on the prior year or 3% at constant exchange rates. The main driver was a series of rail and power plant contracts although the Invensys Controls unit, which makes things like thermostats, contracted.

Operating profit for the year was £209m down 20% on 2010, following £60m of additional contract costs. Those extra costs relate to nuclear projects in China, where expenses ran out of control - new management teams have been brought in to prevent this happening again.

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Underlying earnings per share fell 32% to 13.4p, while the final dividend per share (DPS) will be 2.75p (2011: 2.5p); bringing total DPS for the year up to 4.4p per share an increase of 10% on the previous year.

Wayne Edmunds, the Chief Executive said: "it is disappointing that our profitability was reduced by additional costs arising from our nuclear projects in China and a handful of contracts within Invensys Rail."

He added though that he expected "improving performances" in 2012.

The stock was up 3.1% at 10:15 but is still down 31% over the last 12 months.

BS