Final Results
IMI PLC
05 March 2007
5 March 2007
IMI plc Preliminary Results
IMI plc, the major international engineering group, today announced its
preliminary results for the year ended 31 December 2006.
2006 2005 % change
Continuing businesses:
Revenue £1,505m £1,341m +12
Operating profit * £191.8m £163.7m +17
Profit before tax* £194.9m £160.9m +21
Restructuring costs £19.7m £4.2m
Profit before tax £158.2m £151.1m +5
Adjusted earnings per share ** 38.3p 30.6p +25
Discontinued operations (loss net of tax) £(33.5)m £(86.5)m
Basic earnings per share 21.4p 3.9p
Total dividend for year 18.7p 17.5p +7
* before restructuring costs and intangible amortisation.
** before restructuring costs, change in fair value of financial instruments
and intangible amortisation.
Norman Askew, Chairman of IMI, commented:
'The Group has continued to make good progress with strong advances over last
year in revenue, operating profit, operating margins and earnings per share. We
are confident of delivering another year of good progress in 2007.'
CHAIRMAN'S STATEMENT
In 2006 the Group continued to make good progress with strong advances over last
year in revenue, operating profit, operating margins and earnings per share.
The Fluid Controls businesses performed particularly strongly with an 8% organic
growth in revenue. The Retail Dispense businesses were affected by lower
investment levels within the beverage and retail markets which resulted in an
organic decline in revenue of 3%. The fundamentals in these businesses however
remain strong and we remain confident in the outlook longer term. Overall, we
delivered an organic sales growth of just over 4%.
Operating profit, before restructuring costs and intangible amortisation,
increased by 17%. We have moved closer towards our long term margin objectives
and saw our operating return on sales advance from 12.2% to 12.7%. The three
year restructuring programme that we announced last year is on track and nearly
£20m was invested to move more of our manufacturing facilities to our already
established lower cost centres in Mexico, The Czech Republic and China.
The acquisition for £113m of the Truflo businesses was completed in April 2006
and has made a strong contribution of £11.2m operating profit to our Fluid
Controls businesses.
£35m was invested in our share buy back programme during the year. This will
continue to be used alongside the restructuring and acquisition programmes to
manage the balance sheet and our intention remains to build net debt levels to
between £400m and £500m over the next few years.
The Board is recommending that the final dividend be increased by 8% to 11.7p.
This makes the total dividend for the year 18.7p, an increase of 7% over last
year's 17.5p.
Outlook
The underlying momentum in our business remains healthy. End markets are
generally supportive, and the level of activity within our business around new
product and customer development is encouraging.
The order book at the year end was around 8% higher than the prior year,
reflecting both increased momentum and a lengthening delivery profile. Despite
some short term issues relating to the US truck sector and the beverage dispense
market, we are confident of delivering another year of good progress in 2007.
CHIEF EXECUTIVE'S REVIEW
2006 was another encouraging year for our business, with results buoyed by a
strong performance in our Fluid Controls businesses, and an impressive
contribution from our recent acquisitions. Another year of strong cash
performance highlights the cash-generative qualities of our businesses, leaving
year end net debt at £80m.
We made good progress against our well defined operational strategies in each of
our businesses, building on strong market positions through accelerated
investment in new products and key account management. New product introductions
included the launch of new control valve and strainer products within Severe
Service for the rapidly growing liquefied natural gas and nuclear markets; a new
technology product within Indoor Climate for protecting against legionella in
water-borne cooling systems; and in-store merchandising for the launch of
Microsoft's highly successful Zune digital music and video player. Creative and
bespoke product solutions that deliver engineering advantage for global blue
chip customers in well defined niche markets remains the common theme within
IMI, and is our chosen pathway to sustainable long term growth and margin
improvement.
Our Fluid Controls businesses (69% of revenue, 77% of profits) are clearly
faring better than our Retail Dispense businesses (31% of revenue, 23% of
profits) at present, benefiting from strong end markets and a significant
exposure to the faster growing emerging markets of Asia and Eastern Europe. The
medium term prospects for our Fluid Controls businesses continue to look
positive and, notwithstanding the short term impact of the much anticipated fall
in US truck volumes this year, we expect further top line growth and margin
improvement. Our Retail Dispense businesses had a more challenging year, with
consumer-led sectors generally less favourable, and market-specific issues
resulting in a postponement of capital expenditure and a downward pressure on
margins. Nonetheless, the long term drivers for these businesses remain
encouraging, and the scope for volume and margin recovery, through product
innovation in particular, remains considerable.
We accelerated our programme of upgrading management, through both external
recruitment and increased investment in the development of our existing team.
This programme is progressing well. We are encouraged by the calibre of our new
recruits, and confident that we are assembling the right skills and experience
to fully capitalise on future business opportunities. The recent strengthening
of the Board, with the appointment of Roy Twite as Executive Director for the
Retail Dispense businesses, is another very positive development in this regard.
Our balance sheet is in excellent shape and we are well placed to fund further
acquisitions. We were particularly pleased with the performance of the Truflo
acquisition which we concluded in April. A number of other acquisitions were
considered in the year but did not proceed for a variety of reasons. Our
investments in restructuring to accelerate further the transition of
manufacturing to lower cost economies continued to plan in the year, and we have
additional investments of around £20m programmed for each of the next two years.
We are already starting to see the benefits of the actions we took during 2006
and with a continued focus on margin improvement we look forward to achieving
further progress.
FINANCIAL AND OPERATIONS REVIEW
Results summary
Revenue increased 12% to £1,505m (2005: £1,341m) including acquisitions which
contributed £120m or 9%.
Operating profit before intangible amortisation and restructuring charges was
£191.8m (2005: £163.7m), an increase of 17%. Acquisitions contributed £18m at
this level. Operating profit after restructuring costs and intangible
amortisation was £155.1m (2005: £153.9m).
Interest costs on net borrowings were £7.5m (2005: £8.2m). Including the impact
of pension fund financing (IAS 19) and financial instruments and derivatives
(IAS 39), the total net financial income was £3.1m (2005: expense of £2.8m).
Profit before tax was £158.2m (2005: £151.1m), an increase of 5%. The effective
tax rate for the year was 31%, compared to 32% in 2005.
Adjusted earnings per share on continuing businesses (excluding the change in
fair value of financial instruments, intangible amortisation and restructuring
costs) was 38.3p (2005: 30.6p), an increase of 25%. The basic earnings per
share, after the charge in respect of discontinued operations, was 21.4p (2005:
3.9p).
Exchange rates
If average exchange rates had remained at 2005 levels our reported 2006 revenue
and profit growth would each have been 1% higher. The US$ weakened significantly
late in the year. If current exchange rates of US$ 1.96 and €1.49 had been
applied to our 2006 results it is estimated that revenue would have been £49m
lower and operating profit £7m lower.
Discontinued operations
The copper plumbing fittings business of IMI was sold in 2002 but we retained
some responsibility for previous anti-competitive activity involving several
other European manufacturers. In October 2006, following a lengthy investigation
into the European fittings industry, the European Commission imposed a fine of
€48.3m on the Company. The Company has lodged an appeal against the fine. This
fine, together with certain legal expenses, is shown as a loss, after tax, of
£33.5m from discontinued operations.
Cash flow
Operating cash flow was £147m, 86% of operating profit before intangible
amortisation. Corporate activity, comprising acquisitions, share issues, share
buy backs and the redemption of a vendor loan note accounted for an outflow of
£118m. After interest, tax, the additional pension scheme contribution and
paying dividends of £61m, the net cash outflow was £98m.
Balance sheet
The pension fund deficit under IAS19 at 31 December 2006 was £121m, £52m lower
than the prior year, primarily due to an increase in the value of the UK pension
fund assets and additional contributions made in the year of £16m. Closing net
debt was £80m.
In the following analysis, operating profit and margin are stated before
restructuring costs and intangible amortisation. Organic growth rates exclude
the impact of foreign exchange movements and acquisitions.
Severe Service
Revenue £300m (2005: £213m)
Operating profit £45.1m (2005: £28.3m)
Operating margin 15.0% (2005: 13.3%)
The Severe Service revenues grew 41% to £300m. Of this growth, acquisitions
contributed £67m and organic growth was 11%.
The growth in new construction project orders remains healthy at around 25%, led
by the strength of the oil and gas sector.
We have experienced good growth in power markets and renewed interest in the
nuclear sector, which is an area of particular expertise for our Severe Service
business. Our order book momentum continues to out pace our shipment growth with
a consequent lengthening of the order book.
The US and Middle East markets were particularly positive and we continued to
see good progress in the Far East.
Truflo was acquired in April 2006. Those Truflo businesses integrated into
Severe Service are benefiting from their exposure to the liquefied natural gas
market which is demonstrating substantial momentum.
The operating profit margin rose from 13.3% to 15%. We continue to invest in
both capacity expansion and sales and engineering resource to support the strong
growth potential in this business.
Fluid Power
Revenue £557m (2005: £492m)
Operating profit £72.4m (2005: £60.0m)
Operating margin 13.0% (2005: 12.2%)
Fluid Power revenues were £557m representing an increase of 13%. Excluding
acquisitions and currency movements, underlying sales growth for Fluid Power was
6%.
Our sector businesses, which account for nearly 30% of Fluid Power revenues,
performed well with solid progress in commercial vehicles and strong results in
print and medical, the latter being helped by our expansion in China. Recent
acquisitions, including GT Developments and the relevant parts of the Truflo
business, provided 2006 revenues of £38m.
The industrial pneumatics business made steady progress with strong growth in
Asia Pacific, firmer markets in Europe, and stable markets in the USA.
Operating margins continued to make steady progress and increased from 12.2% to
13%. The restructuring programme to transfer manufacturing capacity to lower
cost operating environments is progressing well, with the project to relocate
capacity from the US to Mexico on track. Further programmes to transfer UK and
German capacity have been announced in early 2007.
Indoor Climate
Revenue £186m (2005: £172m)
Operating profit £29.5m (2005: £25.6m)
Operating margin 15.9% (2005: 14.9%)
Indoor Climate revenues were £186m, with organic growth of 8% in the year.
The balancing valves business, which focuses on larger commercial properties,
showed good growth in mainland Europe, and made excellent progress in the Middle
East, Asia and the US on the back of significant investments in sales and
engineering resource over the last two years.
Our thermostatic radiator valve business, where the valves are primarily
installed in residential properties, benefited from a stronger Continental
European market, particularly Germany, although there was some pull forward into
2006 due to VAT changes introduced in January 2007. Growth in Eastern Europe was
very strong, including Russia, where we have recently commenced local assembly.
Metal price increases were significant in the year but were recovered through
selling prices.
Beverage Dispense
Revenue £282m (2005: £278m)
Operating profit £25.4m (2005: £28.4m)
Operating margin 9.0% (2005: 10.2%)
The 3% decline in organic revenues for the year reflects some of the short term
challenges facing beverage dispense, with Quick Service Restaurants (QSR)
continuing to give priority to their hot side investments and with margin
pressure on some of our older equipment lines. We are confident that both these
pressures will abate in time. Investment levels in the QSR sector are expected
to return to normal levels later in the year and significant cost reduction
programmes are now underway, most notably the further relocation of
manufacturing capacity to China and Mexico. These will help to reverse downward
margin trends, albeit volumes and margins for at least the first half of 2007
are unlikely to show much improvement on 2006.
Our aftermarket business continued to perform strongly and the Northern Parts
business acquired in November 2005 made a solid contribution. We see
opportunities to expand this business further and continue to invest in sales
and systems infrastructure accordingly.
The longer term prospects for Beverage Dispense continue to look promising, with
many customers now enjoying some volume growth as they navigate their way
through the swing in consumer preferences to healthier drinks.
Merchandising Systems
Revenue £180m (2005: £186m)
Operating profit £19.4m (2005: £21.4m)
Operating margin 10.8% (2005: 11.5%)
Although organic revenues were marginally down in the year, momentum in the
majority of our sectors is positive, with the consumer products segment, which
includes merchandising equipment for electronic games, mobile phones and MP3
players, particularly buoyant.
Sales to the grocery sector were also strong but automotive, dairy and newspaper
equipment sales declined in difficult markets with older product lines coming
under pricing pressure.
The acceleration of our low cost sourcing programme from China and India should
start to generate margin improvement as the year progresses.
Prospects for 2007 are encouraging, particularly the second half for which we
have recently secured orders for a number of important projects in the cosmetics
and consumer electronics sectors.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2006
Notes 2006 2005
1 (restated)
£m £m
----------------------------
Revenue 2,3,4 1,505 1,341
----------------------------
Operating profit before restructuring costs
and intangible amortisation 191.8 163.7
Restructuring costs (19.7) (4.2)
Intangible amortisation (17.0) (5.6)
----------------------------
Operating profit 2,3,4 155.1 153.9
Financial income 5 73.8 67.0
Financial expense 5 (70.7) (69.8)
----------------------------
Net financial income/(expense) 5 3.1 (2.8)
----------------------------
Profit before tax
------------------------------------------------------------------------------------
Before restructuring costs and intangible
amortisation 194.9 160.9
Restructuring costs (19.7) (4.2)
Intangible amortisation (17.0) (5.6)
------------------------------------------------------------------------------------
Total 158.2 151.1
Taxation 6
UK taxation (6.5) (2.5)
Overseas taxation (42.5) (45.9)
----------------------------
Total (49.0) (48.4)
Profit of continuing businesses after tax 109.2 102.7
Loss from discontinued operations (net of tax) (33.5) (86.5)
----------------------------
Total profit for the year 75.7 16.2
============================
Attributable to:
Equity shareholders of the Company 72.7 13.5
Minority interest 3.0 2.7
----------------------------
Total profit for the year 75.7 16.2
============================
Earnings per share 7
Basic earnings per share 21.4p 3.9p
Diluted earnings per share 21.3p 3.8p
Basic earnings per share (continuing
businesses) 31.3p 28.6p
Diluted earnings per share (continuing
businesses) 31.1p 28.4p
CONSOLIDATED BALANCE SHEET
at 31 December 2006
2006 2005
£m £m
----------------------------------------
Assets
Intangible assets 286.8 185.8
Property, plant and equipment 190.3 192.1
Deferred tax assets 55.8 75.5
----------------------------------------
Total non-current assets 532.9 453.4
----------------------------------------
Inventories 217.4 205.6
Trade and other receivables 295.2 301.8
Current tax 8.7 18.6
Investments 15.0 13.0
Cash and cash equivalents 107.2 188.9
----------------------------------------
Total current assets 643.5 727.9
----------------------------------------
Total assets 1,176.4 1,181.3
----------------------------------------
Liabilities
Bank overdraft (3.6) (6.9)
Interest-bearing loans and borrowings (43.3) (44.4)
Provisions (6.2) (1.1)
Current tax (18.2) (27.1)
European Commission fine (33.5) -
Trade and other payables (322.0) (301.9)
----------------------------------------
Total current liabilities (426.8) (381.4)
----------------------------------------
Interest-bearing loans and borrowings (140.7) (148.2)
Employee benefits (120.6) (172.8)
Provisions (34.3) (33.0)
Deferred tax liabilities (15.5) (4.4)
Other payables (21.9) (20.4)
----------------------------------------
Total non-current liabilities (333.0) (378.8)
----------------------------------------
Total liabilities (759.8) (760.2)
----------------------------------------
Net assets 416.6 421.1
----------------------------------------
Equity
Share capital 90.3 89.6
Share premium 155.2 149.4
Other reserves (0.4) 7.3
Retained earnings 167.6 171.3
========================================
Total equity attributable to equity
shareholders of the Company 412.7 417.6
Minority interest 3.9 3.5
----------------------------------------
Total equity 416.6 421.1
========================================
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2006
2006 2005
Cash flows from operating activities (restated)
£m £m
-------------------------
Profit for the period 75.7 16.2
Adjustments for:
Depreciation 38.7 38.4
Amortisation 17.0 5.6
Loss from discontinued operations (net of tax) 33.5 86.5
Gain on sale of property, plant and equipment (2.0) -
Financial income (73.8) (67.0)
Financial expense 70.7 69.8
Equity-settled share-based payment expenses 2.9 2.0
Income tax expense 49.0 48.4
Increase in trade and other receivables (30.9) (8.9)
(Increase)/decrease in inventories (14.8) 5.7
Increase in trade and other payables 19.0 24.6
Increase/(decrease) in provisions and employee
benefits 1.3 (12.0)
-------------------------
Cash generated from the operations 186.3 209.3
Income taxes paid (40.0) (54.2)
-------------------------
146.3 155.1
Additional pension scheme funding (15.6) (15.6)
EC fine - (31.3)
-------------------------
Net cash from operating activities 130.7 108.2
-------------------------
Cash flows from investing activities
Interest received 8.4 10.0
Proceeds from sale of property, plant and equipment 7.7 5.6
Sale of investments 0.1 -
Purchase of investments (2.6) (1.1)
Acquisition of subsidiaries, net of cash acquired (118.4) (63.6)
Disposal of subsidiary/discontinued operations (net
of cash disposed) - 206.4
Redemption of vendor loan note re Polypipe 35.9 -
Acquisition of property, plant and equipment (39.7) (41.9)
Capitalised development expenditure (4.4) (5.2)
-------------------------
Net cash from investing activities (113.0) 110.2
-------------------------
Cash flows from financing activities
Interest paid (17.1) (18.2)
Purchase of own shares (42.4) (72.6)
Proceeds from the issue of share capital for
employee share schemes 6.6 10.4
Drawdown/(repayment) of borrowings 7.4 (14.0)
Dividends paid to minority interest (2.1) (1.6)
Dividends paid (60.7) (59.4)
-------------------------
Net cash from financing activities (108.3) (155.4)
-------------------------
Net (decrease)/increase in cash and cash equivalents (90.6) 63.0
Cash and cash equivalents at
start of year 182.0 115.4
Effect of exchange rate fluctuations
on cash held 12.2 3.6
-------------------------
Cash and cash equivalents at
end of year 103.6 182.0
-------------------------
Notes to the cash flow appear in note 9
CONSOLIDATED STATEMENT
OF RECOGNISED INCOME AND EXPENSE
2006 2005
£m £m
-----------------------------
Foreign exchange translation differences (9.6) 5.6
Actuarial gains/(losses) on defined benefit
plans (net of tax) 23.3 (36.4)
Effective portion of change in fair value of net
investment hedges (net of tax) 1.9 2.3
-----------------------------
Income and expense recognised directly in equity 15.6 (28.5)
Profit for the year 75.7 16.2
-----------------------------
Total recognised income and expense for the year 91.3 (12.3)
-----------------------------
Attributable to:
Equity holders of the Company 88.3 (15.0)
Minority interest 3.0 2.7
-----------------------------
Total recognised income and expense for the year 91.3 (12.3)
--------------------------------------------------------------------------------
RECONCILIATION OF CHANGES IN SHAREHOLDERS' EQUITY
2006 2005
£m £m
-----------------------------
Shareholders' equity at start of year 417.6 550.8
Total recognised income and expense for the year 88.3 (15.0)
Dividends paid (60.7) (59.4)
Share based payments (net of tax) 3.4 3.4
Issue of ordinary shares net of costs 6.5 10.4
Purchase of own shares (42.4) (72.6)
-----------------------------
(93.2) (118.2)
-----------------------------
Shareholders' equity at end of year 412.7 417.6
-----------------------------
NOTES RELATING TO THE FINANCIAL STATEMENTS
1. Restatement
2005 comparative figures have been restated where appropriate to exclude and
separately identify restructuring costs, to show financial income and expense
related to defined benefit pension schemes gross and to show loss from
discontinued operations (net of tax) and the equivalent in the cash flow as
single line items.
2. Segmental analysis
Segment information is presented in the consolidated financial statements in
respect of the Group's continuing business segments, which are the primary basis
of segment reporting. The business segment reporting format reflects the Group's
management and internal reporting structure.
Operating profit
before restructuring costs
Revenue & intangible amortisation Operating profit
2006 2005 2006 2005 2006 2005
BY ACTIVITY £m £m £m £m £m £m
---------------- --------------------- ----------------
Fluid Controls 1,043 877 147.0 113.9 116.6 107.6
--------------------------------------------------------------------------------------------
Severe Service 300 213 45.1 28.3 33.4 27.3
Fluid Power 557 492 72.4 60.0 55.9 55.4
Indoor Climate 186 172 29.5 25.6 27.3 24.9
--------------------------------------------------------------------------------------------
Retail Dispense 462 464 44.8 49.8 38.5 46.3
--------------------------------------------------------------------------------------------
Beverage Dispense 282 278 25.4 28.4 22.0 26.3
Merchandising Systems 180 186 19.4 21.4 16.5 20.0
--------------------------------------------------------------------------------------------
Total continuing operations 1,505 1,341 191.8 163.7 155.1 153.9
-------------------------------------------
Net financial income/(expense) 3.1 (2.8)
Taxation (49.0) (48.4)
----------------
Profit of continuing businesses after tax 109.2 102.7
-----------------------------------------------------------------------------------------------
REVENUE BY GEOGRAPHICAL DESTINATION
2006 2005
£m £m
----------------
UK 173 164
Germany 194 179
Rest of Europe 376 324
USA 490 466
Asia/Pacific 183 141
Rest of World 89 67
----------------
Total continuing operations 1,505 1,341
----------------
3. Acquisitions
The only material acquisition completed in the period was of the whole share
capital of Truflo, a leading specialist in valves and related flow control
products, acquired in April 2006 and reported within Severe Service and Fluid
Power.
Of the reported increase in revenue and operating profit of continuing
businesses (before restructuring costs, intangible amortisation and exceptional
items), £62m and £11.2m respectively result from the Truflo acquisition. The
extra months of the prior year acquisitions of Syron Engineering & Manufacturing
and GT Development Corporation (Fluid Power), the ABB KK Control Valve business
(Severe Service) and Northern Parts & Service (Beverage Dispense) contributed
£58m and £6.5m revenue and operating profit respectively.
Assuming the Truflo acquisition had been completed on 1 January 2006, the Group
revenue and operating profit would have been higher by £19m and £3m
respectively.
4. Discontinued businesses
There were no businesses discontinued in 2006.
In September 2006, the European Commission announced the imposition of a fine of
€48.3m on IMI in relation to its former copper fittings business, which was sold
in 2002. Pending the outcome of an appeal, the full amount of the fine together
with associated costs has been provided and is reported in the income statement
as a loss on discontinued operations (net of tax). The fine was paid in January
2007.
The loss on discontinued operations (net of tax) in 2005 comprises the after tax
trading result of the Polypipe Group together with the loss on its disposal,
which was completed on 2 September 2005, plus closure costs of its Door and
Windows business which was closed prior to sale.
5. Net financial income & expense
2006 2005
Interest Other Total Interest Other Total
£m £m £m £m £m £m
----------------------------------------------------------
Interest income 5.5 5.5 6.9 6.9
Others
Gain on remeasurement
of financial instruments
and derivatives 5.3 5.3 3.3 3.3
Expected return on
defined benefit
pension plan assets* 63.0 63.0 56.8 56.8
----------------------------------------------------------
Financial income 5.5 68.3 73.8 6.9 60.1 67.0
----------------------------------------------------------
Interest expense (13.0) (13.0) (15.1) (15.1)
Loss on remeasurement
of financial instruments
and derivatives (3.0) (3.0) (3.9) (3.9)
Financial cost of
defined benefit
pension scheme liabilities* (54.7) (54.7) (50.8) (50.8)
----------------------------------------------------------
Financial expense (13.0) (57.7) (70.7) (15.1) (54.7) (69.8)
----------------------------------------------------------
Net financial income/(expense) (7.5) 10.6 3.1 (8.2) 5.4 (2.8)
----------------------------------------------------------
* In line with best practice, the components of financial income and expense
related to defined benefit pension schemes have been separated into their
respective categories. The comparatives have been restated accordingly. Net
financial income/expense is unaffected.
6. Taxation
The effective tax rate on profit before tax is 31% (2005: 32%).
7. Earnings per ordinary share
The weighted average number of shares in issue during the period, net of shares
purchased by the company and held as treasury shares or to satisfy share option
vesting, was 339.3m, 341.3m diluted for the effect of outstanding share options
(2005: 349.7m, 352.4m diluted). Basic earnings per share have been calculated on
earnings of £72.7m, (2005: £13.5m) and the equivalent ratios for continuing
businesses have been calculated on earnings of £106.2m (2005: £100.0m), before
losses on discontinued operations (net of tax).
The directors consider that adjusted earnings per share figures, using earnings
as calculated below, give a more meaningful indication of the underlying
performance.
From continuing operations 2006 2005
(restated)
£m £m
---------------------
Profit for the year 109.2 102.7
Minority interest (3.0) (2.7)
Charges/(credits) included in profit for the year:
Change in fair value of financial instruments (2.3) 0.6
Intangible amortisation 17.0 5.6
Restructuring costs 19.7 4.2
Taxation on charges/(credits) included in
profit before tax (10.7) (3.5)
---------------------
Earnings for adjusted EPS 129.9 106.9
---------------------
Weighted average number of shares 339.3m 349.7m
---------------------
Adjusted EPS 38.3p 30.6p
---------------------
8. Dividend
The directors recommend a final dividend of 11.7p per share (2005: 10.85p)
payable on 25 May 2007 to shareholders on the register at close of business on
13 April 2007, which will absorb £39.5m (2005: £37.1m). Together with the
interim dividend of 7.0p per share paid on 20 October 2006, this makes a total
distribution of 18.7p per share (2005: 17.5p per share). In accordance with
IAS10: 'Events after the Balance Sheet date', this final proposed dividend has
not been reflected in the 31 December 2006 balance sheet.
9. Cash flow reconciliations
Reconciliation of cash generated from the operations
2006 2005
Reconciliation of operating cash flow £m £m
--------------------
Cash generated from the operations 186.3 209.3
Sale of property, plant and equipment 7.7 5.6
Net purchase of investments (2.5) (1.1)
Acquisition of property, plant and equipment (39.7) (41.9)
Capitalised development expenditure (4.4) (5.2)
--------------------
Operating cash flow 147.4 166.7
--------------------
Reconciliation of net cash to movement in net borrowings
Net (decrease)/increase in cash and
cash equivalents (90.6) 63.0
(Drawdown)/repayment of borrowings (7.4) 14.0
--------------------
Cash (outflow)/inflow (98.0) 77.0
Currency translation differences 28.2 (11.9)
--------------------
Movement in net borrowings in the year (69.8) 65.1
Net borrowings at the start of the year (10.6) (75.7)
--------------------
Net borrowings at the end of year (80.4) (10.6)
--------------------
10. Exchange rates
The income statements of overseas operations are translated into sterling at
average rates of exchange for the year, balance sheets are translated at year
end rates. The most significant currencies are the US Dollar and the Euro - the
relevant rates of exchange were:
Average Rates Balance Sheet Rates
2006 2005 2006 2005
------------------ -------------------
Euro 1.47 1.46 1.48 1.46
US Dollar 1.85 1.82 1.96 1.72
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2006 or 2005 but is derived
from the 2006 accounts. Statutory accounts for 2005 have been delivered to the
registrar of companies and those for 2006 will be delivered in due course. The
auditor has reported on those accounts; its reports were (i) unqualified, (ii)
did not include references to any matters to which the auditor drew attention by
way of emphasis without qualifying its reports and (iii) did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
The Company's 2006 Annual Report and notice of the forthcoming Annual General
Meeting will be posted to shareholders on 4 April 2007.
- ends -
Enquiries to:
Graham Truscott - Corporate Communications - Tel: 0121 717 3712
Press release available on the internet at www.imiplc.com
Issued by:
Nick Oborne - Weber Shandwick Financial - Tel: 020 7067 0700
This information is provided by RNS
The company news service from the London Stock Exchange
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