IMI predicts full year progress despite Q1 revenue fall

IMI, the Birmingham-based global engineering group, has predicted progress over the full year despite revenue falling 1% – and 3% on an organic basis – during the first four months of the year.

Overall, the group said that trading since the start of the year had been in line with management expectations.

“Based on current market conditions, we remain confident that the group will deliver progress over the full year in 2013,” it said.  

Revenues in its Severe Service division were flat on a reported basis and down 2% on an organic basis in the first four months of the year.  Nevertheless, the group said this reflected a positive performance given the very strong start it had in 2012, when shipments included a catch up in backlog that existed at the end of 2011.
 
Order intake has been encouraging, up around 20% in the period to the end of April.  There has been continued good momentum in the Oil & Gas sector, where it has secured a large order in the Middle East.

Margins are expected to improve in the first half benefitting from productivity gains in the group’s Brno manufacturing facility.

Revenues in Fluid Power were down 4% on a reported basis and 5% on an organic basis in the four-month period. It said it had seen a slow start to the year in the Commercial Vehicle sector against a strong first quarter last year. Commercial Vehicle revenues are down 11% year to date with European and North American markets weak as customers adjusted stock levels down in the first quarter.

However, it said it expected the situation would improve.

“We are seeing an improvement in industry demand data in the US market and have recently received notification of an impending uplift in production schedules from a number of major truck manufacturers in Europe,” it said.

Indoor Climate revenues were up 1% on a reported basis and down 1% on an organic basis in the first four months with European markets continuing to be mixed with good growth in the Nordic region, France and Switzerland offset by a weaker performance in the Benelux area.  

Revenues in Beverage Dispense were down 4% on a reported basis and 5% on an organic basis in the period.

Merchandising was said to have had a strong start to the year.  Revenues were up 14% on a reported basis and 13% on an organic basis with growth in its European cosmetics business and good activity levels in US automotive, where dealers are investing in the group’s merchandising solutions for their showrooms.
 
The group said it retained a strong balance sheet with good cash generation in the year to date.

It will announce its interims for the six months ending June 30, 2013 on August 22.