Friday, 27 February 2015

IMI Group - Final Results

IMI Group is a global engineering group focused on the precise control and movement of fluids in critical applications. They work with leading international companies in over 50 countries to deliver innovative engineering solutions to address global trends such as clean energy, energy efficiency, healthcare and increasing automation.

IMI’s products and services are ideally positioned to respond to the key environmental and demographic trends that are shaping the future. Drivers for growth of the business include climate change, population growth and scarcity of natural resources, renovation of existing buildings and infrastructure and finally, healthcare related innovation for an increasingly ageing population.

They are a FTSE 250 company with a market cap currently £3.9bn.

I first acquired this company in my portfolio in 2011 at the price of around 830p and a yield of 3.3%. Early in 2013, I foolishly sold for a 50% profit as the yield had fallen - the shares rejoined my ISA portfolio following last years results as a replacement for Carillion.

Results

IMI have today issued results for the year to 31st December 2014 (link via Investegate). As with many other companies, results have been impacted by the strength of sterling for much of 2014. As a result, adjusted profits are down 7% at £278m. However, basic earnings are up 7% at 78p (2013 72.6p) - this increase is mainly as a result of the 7 for 8 share consolidation, which occurred last February.

The full year dividend will be increased by 6.5% to 37.6p. Dividend cover based on adjusted earnings for the continuing businesses remains at 2.1x earnings.

Mark Selway, CEO commented: "Despite challenging economic and market conditions in a number of our key sectors, we delivered results in line with expectations while at the same time making significant investment which will drive future growth.  Our new strategic plan is now being executed across the Group and I am pleased to report that we are already starting to see early signs of tangible benefits.

"In 2015, based on current market conditions and excluding the impact of exchange rate movements, we expect the Group to deliver modest organic revenue growth weighted towards the second half with margins slightly lower than in 2014 reflecting the impact of the disposal of Eley and acquisition of Bopp & Reuther by the Critical Engineering division and the ongoing investments we are making in all our businesses as we ready them for accelerated long-term growth."

It seems to me the results are pretty much in line with expectations. At the time of posting, the share price is down around 3% at £13.80 giving a yield of 2.7%.

As ever please DYOR.

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