15th Dec 2006 07:58
IMI PLC15 December 2006 15 December 2006 IMI plc Trading Update In accordance with its normal practice, IMI plc is today issuing a tradingupdate in advance of its preliminary results announcement for the twelve monthsending 31 December 2006 due to be published on 5 March 2007. Current trading The underlying growth in sales in the second half, excluding acquisitions andthe impact of exchange rates, is expected to be around 5% resulting in estimatedorganic growth for the year of around 4%. Our Severe Service business continues to benefit from strong end markets in powerand particularly in oil and gas. New construction project orders for Europeanand Middle East markets have maintained their first half momentum. The orderbook continues to lengthen as order growth is expected to exceed shipment growthin the full year. In Fluid Power the commercial vehicle market has continued toperform strongly and our other sector businesses are growing at double digitrates. End markets for industrial pneumatics generally are performing well inAsia and much of Continental Europe, and remain positive in North America.Indoor Climate has made good progress in its targeted growth markets of Asia,Eastern Europe and the US, as well as enjoying improved momentum in much ofContinental Europe. The thermostatic radiator valve business has shown pleasinggrowth in its core German market, though possibly benefiting from the impendingJanuary 2007 VAT increase. Beverage Dispense sales have shown some recovery, with second half volumesgenerally in line with last year's levels. However, reinvestment in the US quickservice restaurant sector has been slower to recover than expected. The UK andEuropean beer markets are stable, although margin pressures remain. WithinMerchandising Systems the consumer electronics, cosmetics, beverage and bulkfood display spends remain broadly healthy. Our sales into the US automotivemarket remain some 20% below historic long term levels. The dairy and newspapersectors, faced in the US with higher interest rates and a slowdown in consumerconfidence, have postponed some capital investment programmes, leaving overallvolumes marginally down on the year as a whole. All recent acquisitions, including Truflo, continue to perform well. The translation effect of exchange rates on our results is likely to see thefavourable 2% impact on sales and profit in the first half reverse, resulting ina 1% adverse impact on both sales and profit for the full year. We would expect reported profit before tax on continuing businesses beforeexceptional items, intangible amortisation and restructuring charges to be inthe range of £188-£192m compared to £160.9m last year. In arriving at thisestimate, a profit of between £0-£2m has been assumed to arise from the changein fair value of financial instruments (IAS39). Our restructuring plans are ontarget, resulting in expected costs of around £20m compared to £4.2m last yearwith benefits starting to flow in 2007. Adjusted earnings per share are expectedto show a 20%+ increase over the prior year. European Commission In September the European Commission fined IMI €48.3m in relation to its formercopper fittings business, which was sold in 2002. An appeal is being lodged. Theexpected profit for 2006 discussed above is stated before expensing this fine,which will be accounted for separately as a loss on a previously disposedbusiness. Outlook The overall climate remains broadly positive. Notwithstanding some short termheadwinds resulting from the much anticipated downturn in the US truck marketand continuing softness in the US automotive market, we remain confident inrespect of underlying trends and momentum across the Group. - Ends - IMI plcGraham Truscott, Communications Director Tel: 0121 717 3712 Weber Shandwick Square MileNick Oborne/Stephanie Badjonat Tel: 020 7067 0700 Notes to editors IMI is a dynamic, worldwide company delivering innovative engineering solutionsto leading global customers in clearly defined niche markets. Its fivebusinesses share a common goal - to convert their industry knowledge and marketinsight into customised, design-engineered solutions which create customeradvantage and value. These include severe service valves, motion and fluidcontrol systems, indoor climate controls, beverage dispense systems, andmerchandising display systems for retail operations. Close customer relationships, strong positions in growing markets and cleardifferentiation through technological innovation or service are the definingcharacteristics of all IMI businesses. IMI is quoted on the London Stock Exchange. Information about IMI plc can befound on the website: www.imiplc.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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