24th Jul 2020 10:47
(Alliance News) - IMI PLC on Friday reported an increased first half profit as the company's operating margin improved, allowing it to reinstate its 2019 final and interim shareholder payouts.
Shares in the Birmingham-headquartered engineering firm were 8.9% higher in London on Friday morning at 1,095.00 pence each.
In the six months to June 30, IMI recorded pretax profit of GBP94 million, up slightly from GBP93 million the year before.
Revenue, however, slipped 5% year-on-year to GBP867 million from GBP910 million.
"Having experienced weakness in a number of markets in the second quarter, IMI benefited from cost actions enacted early which supported the delivery of higher margins versus the first half of 2019. The IMI team also scaled up production of one of its most technically advanced products to respond to a temporary surge in ventilator demand," IMI explained.
IMI's interim operating margin improved to 14.0% from 13.0% the year before.
"Our results confirm the resilience and quality of IMI's business model in what have been exceptional and demanding circumstances. Whilst we continue to protect our employees and operations, we have also been helping our customers, broadening our reputation for delivering industry solutions, and readying ourselves for when markets improve," Chief Executive Roy Twite said.
He continued: "As a result of the robust profit and cashflow performance in the first half, we are revisiting two decisions taken earlier in the year. Firstly, our decision to suspend the 2019 final dividend payment has now been reversed, and we will make that payment in full. We will also reset our dividend for 2020 to a level that enables IMI to more effectively deliver on its long-term growth ambitions. Finally, IMI is reinitiating guidance with this announcement, albeit on a qualified basis given the continued uncertainty regarding any future impacts from the coronavirus."
The company has declared an interim dividend of 7.5 pence, halved from 14.9p the year before. Despite the dramatic drop, IMI noted its rebased shareholder distribution still offers baseline earnings cover of 3 times. Previously, IMI had cancelled its 26.2p final dividend for 2019.
And going forward, IMI is guiding for full year adjusted earnings per share between 65p to 70p. In 2019, adjusted EPS came in at 73.2p.
By Paul McGowan; [email protected]
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