12th May 2006 07:00
IMI PLC12 May 2006 12 May 2006 IMI plc Annual General Meeting CHAIRMAN'S STATEMENT IMI plc, the major international engineering group, is holding its 2006 AnnualGeneral Meeting at 12 noon today. At the meeting Norman Askew, Chairman, willcomment: "2005 has seen IMI continue to build on the foundations laid over the last fewyears. With the sale of Polypipe in September, all the businesses previouslyidentified as non-core have now been sold. This leaves us firmly focused on ourfive continuing businesses in Fluid Controls and Retail Dispense, our chosenplatforms for profitable growth. The continued progress we have made in these businesses is demonstrated byanother year of improved performance with organic sales growth of around 5%,operating profit increased by 16%, operating margins increased to nearly 12% andcontinued strong operational cash generation. The Board continues to recognise the importance of dividend income toshareholders and we are recommending the final dividend be increased by 6.4%from 10.2p to 10.85p. This makes the total dividend for the year 17.5p, anincrease of 6.1% over the 16.5p paid in respect of 2004. Corporate activity during the year also saw expenditure of £64m on acquisitionsand £73m on the on-market share buy-back programme. On 26 April 2006, wecompleted the £113m acquisition of Truflo, first announced on 6 March, which isa welcome addition to our Fluid Controls business. We plan to invest around £20m per year for each of the next three years both inupgrading our people talent and transferring more of our manufacturing capacityto already established low cost facilities, raising the percentage of totalproduction in these territories from around 25% today to 40% in three years'time. We would, in time, expect to improve operating margins as a result by 150to 200 basis points. In addition to this accelerating internal investment and the continued, flexibleuse of share buy-backs, we are confident of spending at least £80-100m per annumon bolt-on acquisitions. The acquisition of Truflo gets us off to a strongstart to 2006. This combination of internal investment, bolt-on acquisitions,and share buy-backs is expected to introduce overall debt of around £400-500mover the next three years, a level which we believe to be wholly consistent withoptimising our balance sheet and enhancing shareholder returns. In the current year to date, the momentum in our Severe Service business iscontinuing, with orders received well ahead of last year. Order intake in bothFluid Power and Indoor Climate has strengthened, benefiting from someimprovement in European demand. Beverage Dispense is currently running behindlast year but is expected to pick up in the balance of the year. InMerchandising Systems orders received are ahead of last year although, asexpected, the resulting sales growth will not occur until the second half of theyear." In accordance with our usual practice, it is our intention to issue a tradingupdate on 30 June 2006, which will comment in more detail on current trading. For further information contact:IMI plcGraham Truscott, Communications Director Tel: 0121 717 3712 Weber Shandwick Square MileNick Oborne / Stephanie Badjonat Tel: 020 7067 0700 Information about IMI plc can be found on the website: www.imiplc.com Note to editors: IMI plc is an international engineering business specialising in innovativesolutions and services for a wide range of industrial and retail customers. Itsfuture growth is being built on the two business areas of Fluid Controls (SevereService, Fluid Power, Indoor Climate) and Retail Dispense (Beverage Dispense,Merchandising Systems). IMI's operations in these two business areas share the following corecharacteristics: strong market positions in growing markets; the ability to beclearly differentiated from their competitors through technological innovationor after-sales service; and the provision of 'added value' through bespokesolutions rather than a high manufacturing or material content. IMI is quoted on the London Stock Exchange and is capitalised at approximately£1.9bn. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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