IMI enjoys positive momentum
BIRMINGHAM engineering group IMI said the positive momentum it had seen in the first half of the year has continued into the second half with good progress being made across most areas of the business.
In an interim management statement covering the period from July 1 to November 10, 2010, the company said overall revenues in the 10 months to the end of October were up 6% on a constant currency basis. Volumes within Fluid Power, in particular, have continued to strengthen, helping to offset the continuing challenging conditions within the fossil power sector of its Severe Service business.
“This strong revenue performance, together with further positive margin improvement, leads us to expect earnings per share before exceptional items for the full year to be at the middle to upper end of latest analyst expectations, which now range between 62p and 66p,” it said.
It added that while the macro-economic environment continued to be uncertain, the group was well placed to capitalise on long term favourable trends in clean fuel, energy efficiency, environmental control and healthcare expenditure.
Accordingly, it said it was increasing its investment in sales and new product development within these areas, with a particular emphasis on the emerging markets.
The group’s Severe Service business, which operates in later cycle markets, has seen total order intake up 9% in the 10 months to the end of October, compared with the same period last year. It said the strong recovery in its Oil and Gas markets had continued, with year to date order intake up around 80% over the corresponding period in 2009. Activity levels in the Aftermarket and Nuclear businesses also remain healthy.
However, it said the situation in the Fossil Power sector remained very challenging with the improvement in enquiry levels noted earlier in the year only slowly converting to a recovery in order intake. As a result of lower than expected Fossil Power shipments, the group said it expected 2010 full year revenues for Severe Service to be down around 10-15% on last year, with margins, as a consequence, slightly lower.
Elsewhere, the group said it had continued to see good growth in its Fluid Power business, with revenues in the 10 months to the end of October up 33% on 2009.
Strong momentum was maintained in other key global sectors including, Commercial Vehicles, Life Sciences, Rail, Energy and Food & Beverage.
It said good progress continued to be made with the transfer of production lines to lower cost manufacturing facilities in China, Czech Republic and Mexico.
Indoor Climate, its air conditioning business, continued to perform well through September to November after a slow start to the year.
It said in the long term, it believed the business was very attractive as the demand for more energy efficient commercial and residential building solutions, driven by energy costs and environmental legislation, continued to increase.
Volumes in Beverage Dispense have continued to strengthen in the second half with revenues to the end of October up 5% on an organic basis over last year. The good performance helped by positive trends in North America and Asia offsetting more challenging market conditions in Europe.
It said the acquisition of Zimmermann & Jansen was continuing and regulatory clearances were expected by the end of the year.
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