IMI plc Drops 6% Despite Reporting “Significant Progress”

IMI plc (LON:IMI) hikes its dividend 9% and will return £620m to shareholders.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

IMIIMI (LSE: IMI) — the global engineering group that focuses on the precise control and movement of fluids in critical applications — has taken a 6% tumble this morning, despite reporting “significant progress on a number of fronts” in its preliminary results for the year to 31 December 2013.

The company announced that pre-tax profit rose 8%, to £297.7m, and operating profit increased 7%, £321.6m, on revenue that was up 3%, at £1,744m.  

Adjusted earnings per share increased by 12% to 72.6p and the Board has recommended a final dividend for 2013 of 22.5p per share, up almost 9% over 2012’s final payout. This makes a total dividend of 35.3p per share for 2013, also up almost 9% over 2012.

IMI also reports that its ‘reshaping’, to become a wholly specialist flow control business, has continued, with the disposal of its beverage dispense and merchandising businesses having completed on 1 January 2014. The businesses were sold to The Marmon Group (a Berkshire Hathaway company) for a total value of £690m. 

As a result of the sale, IMI will be returning £620m to shareholders and making an additional cash contribution of £70m  to the IMI UK Pension Fund, in order to  reduce the fund’s volatility risk and as part of a process of towards self-sufficiency funding levels over the next few years.

Commenting on the results, chief executive Mark Selway said:

As IMI moves into the next phase of its development I have initiated a review of all parts of the Group.  While this review work is ongoing, positive early findings are already emerging.  These findings, together with IMI’s inherent strengths, including its robust balance sheet, indicate that the Group is well positioned to exploit a range of growth opportunities over the medium term.  

 “Looking at the year ahead: in 2014, based on current market conditions and excluding the adverse impact of exchange rates, we expect the Group to deliver modest organic revenue growth in the first half with margins slightly lower than in the first half of last year and an improved overall performance in the year.

At 1,452p, IMI’s share price is barely up on the same time last year, during which time the FTSE 100 has gained 5.5%.  But the story over five years will comfort long-term shareholders, with IMI’s share price rising an impressive 464%, versus the FTSE 100’s 92%.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

> Jon doesn't own shares in IMI.

More on Company Comment

Girl and father putting coin into piggy bank, sitting on sofa at home
Investing Articles

Here’s why I’d buy Legal & General shares to bag 7.5% dividends today

Legal & General shares are picking up, as the company reaches the halfway stage in its five-year cash and dividend…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Rolls-Royce shares are trading for pennies. Should I buy them today?

Just because Rolls-Royce shares cost pennies doesn't make them cheap. Its troubles aren't over yet.

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

8.5% and 9.5% dividend yields! 2 FTSE 100 stocks to buy today

The dividend yields at these brilliant blue-chips sit very close to double digits. I think they could be too good…

Read more »

Investing Articles

Tesco vs Royal Mail: which cheap FTSE 100 share should I buy?

The Tesco and Royal Mail share prices both seem to offer great value at recent levels. So which cheap FTSE…

Read more »

Investing Articles

2 FTSE 100 dividend-paying stocks to buy in an ISA

The deadline for new money going into Stocks and Shares ISAs is just around the corner. Here are two FTSE…

Read more »

Business man on stock market crash financial trade indicator background.
Investing Articles

2 dividend paying banking stocks to combat inflation in 2022

With inflation taking off in the US, the Fed may have to raise rates. Stephen Bhasera believes these banking stocks…

Read more »

Various denominations of notes in a pile
Investing Articles

A high-dividend stock I’d buy now

Why this high-dividend stock is potentially more than just a sleepy cash-cow business and growth looks set to kick in…

Read more »

Investing Articles

2 FTSE 100 dividend stocks I’d aim to never sell

I wouldn't try to hold all my investments forever, but these two FTSE 100 dividend stocks both have many qualities…

Read more »