IMI PLC
12 May 2006
12 May 2006
IMI plc Annual General Meeting
CHAIRMAN'S STATEMENT
IMI plc, the major international engineering group, is holding its 2006 Annual
General Meeting at 12 noon today. At the meeting Norman Askew, Chairman, will
comment:
'2005 has seen IMI continue to build on the foundations laid over the last few
years. With the sale of Polypipe in September, all the businesses previously
identified as non-core have now been sold. This leaves us firmly focused on our
five continuing businesses in Fluid Controls and Retail Dispense, our chosen
platforms for profitable growth.
The continued progress we have made in these businesses is demonstrated by
another year of improved performance with organic sales growth of around 5%,
operating profit increased by 16%, operating margins increased to nearly 12% and
continued strong operational cash generation.
The Board continues to recognise the importance of dividend income to
shareholders 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, an
increase of 6.1% over the 16.5p paid in respect of 2004.
Corporate activity during the year also saw expenditure of £64m on acquisitions
and £73m on the on-market share buy-back programme. On 26 April 2006, we
completed the £113m acquisition of Truflo, first announced on 6 March, which is
a welcome addition to our Fluid Controls business.
We plan to invest around £20m per year for each of the next three years both in
upgrading our people talent and transferring more of our manufacturing capacity
to already established low cost facilities, raising the percentage of total
production 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 150
to 200 basis points.
In addition to this accelerating internal investment and the continued, flexible
use of share buy-backs, we are confident of spending at least £80-100m per annum
on bolt-on acquisitions. The acquisition of Truflo gets us off to a strong
start to 2006. This combination of internal investment, bolt-on acquisitions,
and share buy-backs is expected to introduce overall debt of around £400-500m
over the next three years, a level which we believe to be wholly consistent with
optimising our balance sheet and enhancing shareholder returns.
In the current year to date, the momentum in our Severe Service business is
continuing, with orders received well ahead of last year. Order intake in both
Fluid Power and Indoor Climate has strengthened, benefiting from some
improvement in European demand. Beverage Dispense is currently running behind
last year but is expected to pick up in the balance of the year. In
Merchandising Systems orders received are ahead of last year although, as
expected, the resulting sales growth will not occur until the second half of the
year.'
In accordance with our usual practice, it is our intention to issue a trading
update on 30 June 2006, which will comment in more detail on current trading.
For further information contact:
IMI plc
Graham Truscott, Communications Director Tel: 0121 717 3712
Weber Shandwick Square Mile
Nick 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 innovative
solutions and services for a wide range of industrial and retail customers. Its
future growth is being built on the two business areas of Fluid Controls (Severe
Service, Fluid Power, Indoor Climate) and Retail Dispense (Beverage Dispense,
Merchandising Systems).
IMI's operations in these two business areas share the following core
characteristics: strong market positions in growing markets; the ability to be
clearly differentiated from their competitors through technological innovation
or after-sales service; and the provision of 'added value' through bespoke
solutions 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 Exchange
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