IMI Delivers Resilient Results

LONDON -- IMI  (LSE: IMI  ) , the global engineering company that specializes in the precise control and movement of fluids in critical applications, rose 8% on the week following publication of its preliminary results for the full year ended Dec. 31.

The company saw organic revenue growth of 3%, to 2,190 million pounds, with adjusted pre-tax profit edging up 1%, to 366.3 million pounds, on an operating margin of 17%, which was half a point off 2011's 17.5%.

This week's statement said that growth from its new products and in emerging markets more than offset weaker economic conditions in H2, and margins in its fluid power and indoor climate operations both showed "pleasing resilience" in a tough market. It also described the contributions from its new acquisitions, Remosa and InterAtiva, as "encouraging" and said that both provided considerable scope for growth in future years.

Adjusted earnings per share rose 3%, to 84.3 pence, and the board has recommended an increase of 8% in the full-year dividend, bringing it to 32.5 pence per share.

IMI's chairman, Roberto Quarta, commented:

IMI has delivered a resilient set of results in 2012. In light of this performance, and our confidence in the future prospects for the business, we are pleased to propose an increase in the full-year dividend of 8%.

While the global macroeconomic outlook remains mixed, we are confident of delivering further progress in 2013, supported by higher growth in the emerging markets and an improving contribution from recently introduced new products. In the longer term we are committed to a program of accelerating the convergence of the group's activities around our sweet spot, through increased investment in sales and engineering, and a focused program of corporate activity, featuring both acquisitions and disposals.

IMI has certainly had a good run -- up 17% so far in 2013, almost 33% on this time last year, and more than 180% over the past five years, albeit with a couple of tumbles in 2012. The icing on the cake might be IMI's dividend -- less than the FTSE 100 average, at around 2.5%, but a nice bonus on top of the hefty capital appreciation.

At a current P/E of around 14.6, IMI is at a premium to the FTSE 100 average, and the low forecasts of growth in the near term do make the shares seem rather expensive right now.

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