4
IMI plc
Results overview
After adjusting for the impact of adverse exchange rate movements of £96m and for
acquisitions and disposals, Group revenues on an organic basis increased by 2%.
Group revenues on a reported basis were down 3% to £1,692m (2013: £1,743m).
On a like for like basis, after adjusting for the impact of adverse exchange rate
movements of £18m, segmental operating profit decreased slightly by 1%.
Segmental operating profit on a reported basis was 7% lower at £298m (2013: £322m).
The Group’s operating margin was 17.7% (2013: 18.4%) reflecting our investment in
a range of growth initiatives. Adjusted earnings per share increased by 7% to 78.0p
(2013: 72.6p) principally as a result of the share consolidation in the first quarter of
the year.
Based on these results, and reflecting continued confidence in the Group’s prospects,
the Board is recommending that the final dividend be increased by 7% to 24.0p
(2013: 22.5p). This makes a total dividend for the year of 37.6p, an increase of 7%
over last year’s 35.3p.
Strategic developments
During the first half of 2014 Mark Selway, who became Chief Executive in January
2014, initiated a detailed review of all aspects of the Group’s business. The findings
of this review together with the Group’s new strategic plan was announced in August
at the time of the interim results. Our new strategic plan, details of which are set out
on pages 8 to 23 of this Annual Report, is focused on harnessing IMI’s full potential
to drive accelerated growth and build long-term shareholder value. The opportunities
are significant and that is reflected in our ambition to double the Group’s operating
profits over the next five years, while retaining our financial discipline.
I am pleased to report that the strategic plan is now embedded in all our businesses
and a number of its initiatives are already beginning to deliver real benefits. Mark, in
his Chief Executive’s review on pages 8 and 9, will cover these positive developments
in more detail but by way of example I would like to mention some of the operational
improvements I have seen first-hand. Improving both our competitiveness and our
efficiency are key elements of our plan and, in particular, ensuring that we have in
place the most effective operational processes. In July last year I visited our Hydronic
Engineering’s Füllinsdorf plant in Switzerland and was delighted to see the team
implementing key elements of our new plan including adopting new processes to
accelerate new product development, help reduce working capital and enhance
competitiveness, all of which were delivering positive results.
During the year we further increased our focus on specialist flow control activities.
On 1 January 2014 we completed the sale of the Retail Dispense and Merchandising
divisions to the Marmon Group for an enterprise value of $1,100m (£690m) and
subsequently returned £620m of cash to shareholders. Additionally, in October,
we sold the non-core Eley businesses for £42m and in November 2014 we announced
the acquisition of the power generation valve specialist, Bopp & Reuther, for a cash
2014 was a year of good progress for the Group. In particular, in the first half of the year
we undertook a detailed strategic review of all our activities and developed a robust growth
plan to harness the Group’s full potential and deliver accelerated growth and long-term
shareholder value.
Chairman’s Statement
A year of good progress
Roberto Quarta
Chairman
