30th Jun 2005 07:01
IMI PLC30 June 2005 30 June 2005 IMI plc Trading Update In accordance with its normal practice, IMI plc is today issuing a tradingupdate in advance of its interim results announcement for the six months ending30 June 2005, due to be published on 5 September 2005. Underlying trading has continued much as outlined in our Annual General Meetingstatement with the US and Asia still reasonably robust but the UK and, inparticular, mainland Europe markets offering little encouragement. In Severe Service, energy related markets continue to demonstrate positivemomentum with both power and oil & gas again delivering good order growth.Overall order intake is up by around 15% in the first half, with the Asianregion, particularly the Chinese fossil power sector, leading the way. Our sharein the growing LNG market remains healthy. The strongest growth in Fluid Power continues to be in our targeted sectors,where the global truck sector in particular remains buoyant. Overall ourtargeted sectors again recorded double-digit order growth. Elsewhere, the endmarkets for our general pneumatics business remain patchy, with the US and Asiacontinuing to show growth but the UK and, more significantly, mainland Europe,remaining soft with little sign of any improvement. Syron, acquired in February2005, and FAS have performed well. Indoor Climate sales overall are expected to be flat. Modest growth in balancingvalves and markets outside the core European heartland is being offset by adeteriorating construction market in Germany. TRV sales, which in the first halfof last year benefited from the pull-forward by some distributors ahead of priceincreases, are likely to be around 4% lower. In Beverage Dispense, the US again performed strongly with both the food servicesector and brand-owner business carrying forward the growth seen in 2004. Wecontinue to make good progress in sales of non-carbonated beverage equipment. Asexpected, the UK beer dispense market weakened further. In mainland Europe boththe soft drinks and beer businesses are lower on the back of generally weakconsumer spending. Focus on improving operational and purchasing efficienciescontinues to drive the cost base lower. In Merchandising Systems, cosmetics, beverage and grocery are all performingwell and are ahead of last year. Automotive is expected to return to its morenormal seasonal pattern in 2005 with first half sales around 40% of annualsales. Underlying automotive sales are on track for another good performance,although the £8m included in the first half of 2004 from the Toyota Scionproject will not be repeated. In Building Products, although the underlying market for the main Polypipe pipesbusinesses is fairly flat, the pricing environment has improved, the impact ofwhich should begin to show in margin recovery in the second half. A number ofthe smaller businesses continue to face market pressures and further costreduction measures have been necessary. As previously reported we are engaged in discussions with parties interested inacquiring Polypipe. An update will be given in due course. Since the year end we have, at an aggregate cost of around £80m, paid theEuropean Union fine, acquired Syron and purchased shares by way of the on-marketshare buy-back programme. We also expect to see the normal seasonal outflow ofworking capital in the first half of the year. As a result, borrowings at theend of June are likely to be around £25m higher than at the same time last year. We expect first half profit before tax, goodwill amortisation and exceptionalitems, to be around £80m compared with £74.4m last year, before applying thechanges resulting from the adoption of the International Financial ReportingStandards (IFRS). As stated previously, we do not expect IFRS to have a materialimpact on the Group's reported profit before amortisation of goodwill. - Ends - IMI plcGraham Truscott, Communications Director Tel: 0121 717 3712 Weber Shandwick Square MileNick Oborne/Susanne Walker/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 andRetail Dispense. 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£1.45bn. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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