1st Mar 2019 08:24
LONDON (Alliance News) - FTSE 250-listed engineering firm IMI PLC boosted its 2018 dividend Friday after profit and revenue both rose strongly, despite expecting revenue in early 2019 to struggle.
Meanwhile, Chief Executive Officer Mark Selway will stand down from the firm in May ahead of his retirement, to be replaced by internal candidate and divisional head Roy Twite.
In 2018, pretax profit widened 18% to GBP213 million from GBP181 million the year prior. This was after revenue rose 9.1% to GBP1.91 billion from GBP1.75 billion the year before.
"It is pleasing to report the continuation of the progress achieved in the first half of 2018," CEO Selway said. "Our strategic plan to drive sustainable long-term growth continues to make a real difference across all parts of the group."
"Our new product pipeline is developing well, our manufacturing operations have further improved and the new systems and processes being embedded throughout the business are delivering gains in efficiency and competitiveness", Selway added.
IMI proposed a 26.0 pence per share final dividend, up 3.2% from 25.2p the year prior. For the full year, the dividend rose 3.0% to 40.6p from 39.4p the year before.
"In the first half of 2019 we expect organic revenues to be lower than the same period in 2018 due to the phasing of Critical Engineering's order book and slowing market demand in the Industrial Automation sector in Precision Engineering," Selway added. "Margins are expected to be broadly similar, supported by our operational initiatives and an improved performance from Hydronic Engineering. Results for the full year will also reflect the benefits of restructuring and our normal second-half bias."
In 2018, operating margin stood at 14.0%. This was up from 13.8% the year prior.
In a separate announcement, IMI announced that Selway - CEO since 2014 - will stand down as boss of the FTSE 250-listed firm on May 9 before retiring from the group at the end of July.
"Under Mark's leadership IMI's market position has been significantly enhanced," IMI Chair Robert Smith said. "The group's infrastructure has been modernised, its operational performance radically improved and its customer offering refreshed. As a result, IMI is now a much more robust and sustainable business."
Selway will be replaced by current Divisional Managing Director Twite, first becoming CEO-designate from the start of March. Twite has been on the IMI board since 2007, having joined IMI in 1988.
Smith explained Twite was selected to succeed Selway after a "rigorous selection process" that "included both internal and external candidates".
"He is a strong and experienced successor who has been pivotal to the group's continued success," Smith added. "He has extensive operational experience, deep knowledge of our core markets and outstanding leadership qualities."
Shares in IMI were 4.0% higher at 983.50 pence on Friday.
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