IMI reaffirms guidance, launches transport division review

(Sharecast News) - IMI reaffirmed its full-year guidance on Thursday after reporting a 3% year-on-year decline in organic revenue for the first quarter of 2025, as solid order growth in process automation offset softness elsewhere, and the group placed its transport business under strategic review. The FTSE 100 engineering company said adjusted revenue fell 5% during the period, with the impact of adverse foreign exchange movements and the disposal of its IMF business in April last year weighing on performance.

Group margins, however, improved year-on-year.

Revenue in IMI's core automation segment, which accounted for 64% of 2024 sales, fell 4% on an organic basis.

Process automation revenue declined by 1% against a tough prior-year comparator but saw a 7% rise in organic orders, including a 19% increase in aftermarket orders, supported by several large nuclear contracts.

Industrial automation revenue was down 7%, affected by a cyber incident earlier in the quarter and subdued industrial demand in Europe and the Americas.

Life technology, comprising 36% of 2024 sales, posted a 2% organic revenue decline.

Within the division, climate control delivered 4% growth thanks to demand for energy-efficient products, while revenue in life science and fluid control was flat.

The transport unit, which accounted for 8% of group sales last year, saw a 16% drop in organic revenue, as expected following strong growth in the same period of 2024.

IMI said it had launched a strategic review of the transport business, which serves both conventional and zero-emission commercial vehicle markets.

The company cited the need to assess the unit's ability to meet the group's financial framework over the medium term, despite strong end-market performance.

It also highlighted the resilience of its global operations and pricing flexibility in mitigating potential tariff impacts.

The company maintained its full-year adjusted earnings guidance of 129p to 136p per share, adding that it was expecting a 2% foreign exchange headwind to be partially offset by a lower share count, now projected at 249 million.

A £200m share buyback was currently in progress, following over £650m in shareholder returns delivered since 2019.

"We are pleased to reconfirm our guidance for the full year," said chief executive officer Roy Twite.

"We continue to expect to deliver another year of mid-single digit organic revenue growth in 2025.

"As expected, organic revenue in the first quarter was modestly lower than last year and group margins were up."

Twite said the company saw strong momentum in the process automation aftermarket, where orders were up 19% organically in the first quarter.

"The overall process automation orderbook is 13% higher than March 2024.

"We are also pleased to report continued good demand for our energy efficient solutions in climate control.

"At IMI we have an extremely disciplined approach to capital allocation and are committed to the delivery of our financial framework."

As such, Roy Twite said the company was announcing a strategic review of its transport sector to assess its ability to deliver on medium-term financial targets.

"The growth strategy launched in 2019 has fundamentally transformed IMI and created significant value for shareholders.

"Although the current external environment is evolving quickly, we are confident in the future and well positioned to support our customers, remaining alert for opportunities to unlock further growth."

At 0806 BST, shares in IMi were up 3.4% at 1,854p.

Reporting by Josh White for Sharecast.com.