Engineering group IMI has branded 2018 as a year when the business continued to make important progress.
In its full year results statement for 2018, IMI announced a 9% increase in adjusted group revenues to £1,907m (2017: £1,751m). Excluding adverse foreign exchange and the acquisition of Bimba, group revenues on an organic basis were 5% higher when compared to the prior year.
Adjusted segmental operating profit was 11% higher at £266m (2017: £241m). Excluding the impact of adverse foreign exchange and the Bimba deal, segmental operating profits were 9% higher on an organic basis.
Adjusted operating cash flow of £222m (2017: £218m) followed a strong performance last year and reflected higher working capital to support growth in the Precision Engineering division and comparatively higher advanced payments received by Critical Engineering in 2017.
Lord Smith of Kelvin, IMI Chairman, said: "2018 was another year of important progress. We delivered results ahead of market expectations and continued to execute our strategy effectively. In the year we reported increases in revenues, margins and earnings per share and enhanced our competitive capabilities."
Outgoing Chief Executive, Mark Selway said it was pleasing to report the continuation of the progress achieved in the first half of 2018.
“Our strategic plan to drive sustainable long-term growth continues to make a real difference across all parts of the group. Our new product pipeline is developing well, our manufacturing operations have further improved and the new systems and processes being embedded throughout the business are delivering gains in efficiency and competitiveness," he said in the results statement.
Looking ahead, he said that in the first half of 2019 the business expected organic revenues to be lower than the same period in 2018 due to the phasing of Critical Engineering's order book and slowing market demand in the Industrial Automation sector in Precision Engineering.
IMI Precision Engineering, whose Fradley operation is a member of Made in the Midlands, specialises in the design and manufacture of motion and fluid control technologies where precision, speed and reliability are essential to the processes in which they are involved.
Across the division, revenue for 2018 was 16% higher at £916m (2017: £791m), with a 15% increase in operating profit to £153.2m (2017: £133.5m).
The company said strong Industrial Automation sales in the first half of 2018 slowed in the third quarter and declined slightly in the fourth, leaving the full year up 2% when compared to 2017. Commercial Vehicle related sales of £196m reflected stronger than anticipated markets and were 8% higher in the year, despite £8m of contract completions. European Commercial Vehicle revenues were slightly higher whilst North America grew by 15%. Energy sales were 16% higher than 2017 while Life Sciences and Rail were 12% and 14% higher, respectively.
Looking ahead, the company said the industrial outlook had become more volatile with leading indicators pointing to continued but slower growth in the Industrial Automation and the Commercial Vehicle markets in 2019.
Based on current market conditions, it said it expected first half organic revenues to be slightly higher, with broadly flat margins, when compared to the first half of 2018. The benefits of new product launches and operational improvements are expected to support improved results for the full year.