26th Jul 2024 13:37
(Alliance News) - Analysts welcomed "robust" results from IMI PLC on Friday, while the departure of its chief financial officer wasn't a great surprise after a long stint with the company.
The Birmingham, England-based engineering firm said half-year pretax profit was GBP162.5 million, up 17% from GBP138.5 million a year before, as revenue inched up 1.3% to GBP1.10 billion from GBP1.08 billion.
Revenue from the Automation division was up 5%, while revenue from Life Technology was down 5%. On an organic basis, total revenue was up 5%, including a 9% rise for Automation and 1% decline for Life Technology.
Adjusted operating profit was GBP196 million, up 1.6% from GBP193 million a year before, and up 6% organically. The adjusted operating profit margin improved to 17.9% from 17.8%.
IMI said this was in line with expectations.
At the half-year stage, basic earnings per share was 48.2 pence, up 14% from 42.2p, and adjusted basic EPS was 54.7 pence, up 1.3% from 54.0p. IMI said it still expects 120p to 126p in adjusted basic EPS for all of 2024. This would be up at least 2.7% from 116.8p in 2023.
IMI declared a 10.0 pence interim dividend, up 10% from 9.1p a year before. It also announced at GBP100 million share buyback, without providing further details.
IMI also said Chief Financial Officer Daniel Shook will leave next year, though no earlier than May, after nine years with the company. And it named a new chief operating officer.
Peel Hunt described the results as "robust" noting the higher dividend, "good" free cash flow and the share buyback.
"Organic revenue growth is 5% compared to the 4% at the [first quarter] stage, making IMI one of the few companies in our sector that has seen an acceleration, the broker pointed out.
"The standouts are Industrial Automation being 4% after being down 5% in [the first quarter], despite tough [second quarter] comparators from last year. Climate is 1% after being down 4%, showing its resilience again. The process order intake is up 9%, which is better than we expected and is important as it provides an underpin into 2025," Peel Hunt said.
Davy Research said the share buyback, is a positive catalyst and, given the improving cash generation, should still leave around GBP200 million of M&A firepower.
"The announcement that CFO Dan Shook will leave in mid-2025 isn't a great surprise to us after nine years in the role. We see several strong internal candidates, but an external search is also underway," the broker added.
Shares in IMI rose 2.6% to 1,849.00p in London on Friday.
By Jeremy Cutler, Alliance News reporter
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