Interim Results
08 9월 2003 - 4:03PM
UK Regulatory
RNS Number:4827P
IMI PLC
08 September 2003
8 September 2003
IMI plc presents its First Half Results
IMI plc, the major international engineering group, today announced its interim
results for the six months ended 30 June 2003.
2003 2002
Sales #780m #826m
Results before rationalisation & restructuring *
Profit before tax #68.3m #66.0m
Adjusted earnings per share 12.9p 12.5p
Rationalisation & restructuring #2.4m #14.1m
Profit before tax #56.4m #47.0m
Earnings per share 9.7p 8.5p
Net borrowings #199.1m #329.4m
Gearing 37% 65%
Interest cover before rationalisation & restructuring* 13x 8x
* Before goodwill amortisation and exceptional items
* Repositioning progressing well
* Market positions strengthened
* Strong balance sheet
CHAIRMAN'S STATEMENT
We continue to make good progress with the repositioning of our business,
increasingly benefiting from the last two years of restructuring. We have
reinvested much of the savings in customer development and innovation activities
designed to improve market positions and drive long term growth. In spite of an
economic climate that remains challenging, and little improved from that
reported six months ago, we are able to announce an increase in half year profit
(before tax, rationalisation and restructuring costs, goodwill amortisation and
exceptional items) to #68.3m from #66.0m. With the bulk of restructuring
completed at the end of last year, profit after rationalisation and
restructuring increased to #65.9m from #51.9m.
The Board has decided to again maintain the interim dividend at 6.0p.
Overall, on a like for like basis, sales have remained steady at similar levels
to last year. It is pleasing that we have increased volumes in Fluid Power by
around 4% and have significantly increased the forward order books of Severe
Service and Merchandising Systems, with good momentum for the second half of the
year and beyond. Beverage Dispense had another challenging six months and Indoor
Climate is still coping with the German construction market decline. Polypipe
continued its solid performance.
Our recent acquisitions all made encouraging contributions. DCI Marketing
(Merchandising Systems) and STI (Severe Service), acquired last year, are on
schedule to deliver significant growth, much of it new product related. Fluid
Kinetics (Severe Service) and Commtech (Indoor Climate), acquired earlier this
year, have now been fully assimilated and have expanded the options for their
respective businesses in technology and service.
Our principal low cost manufacturing facilities in Mexico, The Czech Republic
and China all continued to improve their efficiency levels and expand their
output. With over 1200 people now employed in these countries, we are well on
our way to meeting our goal of achieving 30% of manufacturing output from these
locations. Increasing focus on sourcing materials locally, together with our
other purchasing initiatives, has enabled us to offset inflation pressures
elsewhere.
The IMI Academy, with its long term aim of building first class customer
relationships, is making excellent progress and the investment in innovation
through IMI Vision is stimulating further new product developments.
Results summary
Sales of continuing businesses increased to #780m from #738m including #39m from
acquisitions. The impact of exchange rates on translation was negligible.
Reported sales of #826m for the same period last year included #88m in respect
of businesses subsequently sold.
Reported operating profit (before rationalisation and restructuring costs and
goodwill amortisation) was #74.0m (2002: #75.5m). 2002 included #2.5m for
businesses subsequently sold and a #2.5m SSAP24 pension credit which, as
expected, is no longer applicable. After adjusting for these items, the increase
in operating profit of continuing businesses was #3.5m including #2.6m from
acquisitions.
Interest costs were reduced to #5.7m (2002: #9.5m). Profit before tax, before
rationalisation and restructuring costs, goodwill amortisation and exceptional
items, increased by 3.5% to #68.3m (2002: #66.0m).
Rationalisation costs for the period were #2.4m (2002: #14.1m) leaving profit
before tax, goodwill amortisation and exceptional items of #65.9m (2002:
#51.9m). After goodwill amortisation and exceptional items, profit before tax
was #56.4m (2002: #47.0m), an increase of 20%.
The effective rate of tax for the year on profit before goodwill and exceptional
items is expected to be 33% (2002: 32%).
Adjusted earnings per share at 12.9p (2002: 12.5p) increased by 3.2% and
earnings per share at 9.7p (2002: 8.5p) increased by 14.1%.
Operating cash flow after rationalisation spend was #49m (2002: #61m) and free
cash flow before dividend was #31m (2002: #50m). Acquisitions absorbed #15m
(2002: #3m net of disposals).
Borrowings at the end of June were #199.1m (June 2002: #329.4m) compared with
#173.5m at the end of December 2002. Gearing was 37% (June 2002: 65%; December
2002: 33%). Interest cover for the period was 13.0 times (2002: 7.9 times)
before rationalisation and restructuring costs and 12.6 times (2002: 6.5 times)
after rationalisation and restructuring costs.
The interim dividend of 6.0p (2002: 6.0p) costing #21.2m (2002: #21.1m) will be
paid on 20 October 2003.
OPERATIONS REVIEW
The following is a review of our business areas for the six months to June 2003.
Comparisons with the previous year relate to continuing operations and operating
profit is stated before rationalisation and restructuring costs, goodwill
amortisation and exceptional items.
FLUID CONTROLS
Sales: #362m (2002: #322m)
Operating Profit: #36.6m (2002: #29.6m)
Severe Service
Our Severe Service valves business continues to reap the rewards of the
considerable investment in specialist sales engineers with overall order intake
growing a further 8% over last year. The much publicised weakness in the US
Power market continued but was more than offset by a number of major new
contracts in China, and excellent progress in all geographic territories in a
buoyant gas market. Our strategy to bolster growth through upgrades to existing
plants continues to meet the demands of the market.
Sales in the first half were 14% ahead of last year with a high proportion of
new valve projects delivered; operating profits improved to #8.1m (2002: #7.4m).
Fluid Power
The performance of our Fluid Power business was encouraging. Helped by new
products, a 12% increase in sales to our key target sectors, and good growth in
Asia Pacific, overall volumes were 4% ahead of last year despite an otherwise
flat underlying market.
The transfer of production to both the Mexican and Czech Republic facilities
accelerated during the period and efficiency levels are on track to achieve year
end targets. The significant infrastructure changes being made to the European
market-facing activities are progressing well, with a number of locations now
consolidated.
The benefits from the restructuring programme are continuing to mature and have
contributed to margin enhancement and an increase in operating profit to #17.4m
(2002: #12.2m).
Indoor Climate
Our Indoor Climate business faced generally subdued market conditions. Balancing
valves and commissioning service showed some modest growth but thermostatic
radiator valve sales in Germany were again lower, although the decline seems to
be slowing. Sales to Eastern Europe have recovered some momentum and an office
has been opened to exploit opportunities in China.
Attention to cost control enabled margins to be maintained and, excluding
acquisitions, operating profit increased to #10.6m (2002: #10.0m). In addition,
Commtech, acquired in February to add to our commissioning services business,
contributed #9m sales and #0.5m operating profit.
RETAIL DISPENSE
Sales: #222m (2002: #223m)
Operating Profit: #19.2m (2002: #22.4m)
Beverage Dispense
Stripping out the impact of a one-off #21m contract for frozen carbonated
equipment enjoyed in the first half of last year, underlying volumes grew by
around 3%. In an otherwise difficult market, with the food-service sector in the
US particularly weak and soft volumes generally in Europe, this was an
encouraging performance. New products, once again, provided the uplift and our
UK business, in particular, performed strongly, supporting an active beer market
with a number of innovative products.
The relocation of production, both within the US and to Mexico, is now complete.
Whilst operational efficiency levels are improving, we are still short of our
internal targets. This, coupled with higher than normal rework costs in the
first quarter, has impacted first half margins.
Although not yet at break-even, our newly established US on-line parts
distribution business, BEVCORe, continues to make progress. An improvement in
underlying market conditions, particularly in food-service, should enable this
business to achieve its considerable potential.
Operating profit for the period was #12.9m (2002: #17.5m) on sales of #149m
(2002: #174m).
Merchandising Systems
Excluding DCI, acquired in August 2002, sales volume in our Merchandising
Systems business was at the same level as last year, however activity is
considerably stronger. Enquiries and quotations are being converted into firm
orders or commitments as the added value of merchandising investment is again
being recognised. Previously postponed programmes are now being rescheduled and
the underlying trend is positive. Order intake in the six months to June 2003
was significantly higher than in 2002.
DCI has continued its excellent start with results well ahead of the equivalent
period last year before it became part of the Group. In what is traditionally
its quieter period it has contributed #28m sales and #1.8m operating profit. In
addition, it has achieved strong growth in automotive orders and already has an
order book stretching into 2004 and beyond.
Merchandising Systems overall had an operating profit of #6.3m (2002: #4.9m) on
sales of #73m (2002: #49m) .
BUILDING PRODUCTS
Sales: #196m (2002: #193m)
Operating Profit: #18.2m (2002: #18.5m)
In Building Products, the Polypipe core pipes business continues to demonstrate
its ability to generate satisfactory returns on the back of a solid UK base.
Volumes have held up well and strong emphasis on cost reduction helped mitigate
the pressure on margins from raw material prices, which increased during the
period before easing off. Other Polypipe businesses are finding some softness in
their markets and are taking further steps to reduce the impact on margins.
Copper Tube and Fittings
As reported in our press release of 2 September, in respect of copper plumbing
tube we have now received a Statement of Objections from the European Commission
setting out complaints of alleged anti-competitive practices among a number of
parties including IMI. The investigation in respect of copper plumbing fittings
is continuing but no Statement of Objections has yet been received. We continue
to co-operate with the Commission in respect of both investigations. IMI
disposed of its copper plumbing tube and fittings businesses during 2002 but
retains responsibility for these investigations.
OUTLOOK
The repositioning is on track and the considerable investments we have made, in
customer development and product innovation, are beginning to bear fruit. Whilst
the macro-economic environment is difficult, and in our view likely to remain so
for some time, our strengthened market positions and reduced cost base should
allow us to report progress for the year as a whole. Confidence in our
businesses' ability to establish long term profitable growth continues to build.
GROUP PROFIT AND LOSS
--------------------------------------------------------------------------------
6 months to 30 June 2003
Restructuring,
Before goodwill
restructuring, amortisation
goodwill and & exceptional
exceptionals items Total
Notes #m #m #m
---------------------------------------
Turnover 1
Total continuing
operations 780 780
Discontinued operations - -
---------------------------------------
Total turnover 780 780
---------------------------------------
Operating profit 1
Continuing operations
before rationalisation
and restructuring 74.0 74.0
Rationalisation/
restructuring (2.4) (2.4)
Goodwill amortisation (9.5) (9.5)
---------------------------------------
Total continuing operations 74.0 (11.9) 62.1
Discontinued operations - - -
---------------------------------------
Operating profit 74.0 (11.9) 62.1
Exceptional items
Profit on disposal of discontinued
operations - -
Provision for loss on closure of a
business - -
Profit on disposal of property - -
---------------------------------------
Profit before interest 74.0 (11.9) 62.1
Net interest payable (5.7) (5.7)
---------------------------------------
Profit on ordinary activities
before taxation 68.3 (11.9) 56.4
Tax on profit 2 (22.5) 0.8 (21.7)
---------------------------------------
Profit on ordinary activities
after taxation 45.8 (11.1) 34.7
Equity minority
interests (0.5) - (0.5)
---------------------------------------
Profit for the financial year 45.3 (11.1) 34.2
------------------------------
Dividends paid and proposed 3 (21.2)
---------
Transfer to reserves 13.0
---------
Adjusted earnings per share 4 12.9p
Earnings per share 4 9.7p
Diluted earnings per share 4 9.7p
6 months to 30 June 2002 Year to 31 December 2002
Before Before
restructuring, restructuring,
goodwill and goodwill and
exceptionals Total exceptionals Total
#m #m #m #m
------------------- ------------------
Turnover
Total continuing
operations 738 738 1463 1463
Discontinued operations 88 88 149 149
------------------- ------------------
Total turnover 826 826 1612 1612
------------------- ------------------
Operating profit
Continuing operations
before rationalisation
and restructuring 73.0 73.0 146.0 146.0
Rationalisation/
restructuring (13.4) (31.3)
Goodwill amortisation (8.4) (18.0)
------------------- ------------------
Total continuing operations 73.0 51.2 146.0 96.7
Discontinued operations 2.5 1.8 2.2 1.3
------------------- ------------------
Operating profit 75.5 53.0 148.2 98.0
Exceptional items
Profit on disposal of
discontinued operations 1.0 4.0
Provision for loss on
closure of a business - (30.7)
Profit on disposal of
property 2.5 19.7
------------------- ------------------
Profit before interest 75.5 56.5 148.2 91.0
Net interest payable (9.5) (9.5) (16.7) (16.7)
------------------- ------------------
Profit on ordinary
activities before taxation 66.0 47.0 131.5 74.3
Tax on profit (21.1) (16.0) (42.1) (17.6)
------------------- ------------------
Profit on ordinary
activities after taxation 44.9 31.0 89.4 56.7
Equity minority interests (0.9) (0.9) (1.3) (1.3)
------------------- ------------------
Profit for the financial year 44.0 30.1 88.1 55.4
----------- ----------
Dividends paid and proposed (21.1) (54.6)
-------- -------
Transfer to reserves 9.0 0.8
-------- -------
Adjusted earnings per share 12.5p 25.0p
Earnings per share 8.5p 15.7p
Diluted earnings per share 8.5p 15.7p
GROUP BALANCE SHEET
--------------------------------------------------------------------------------
30 June 30 June 31 December
2003 2002 2002
#m #m #m
------------------------------------
Fixed assets
Intangible assets 304.8 291.1 302.5
Tangible assets 309.9 361.7 313.4
------------------------------------
614.7 652.8 615.9
------------------------------------
Current assets
Stocks 263.3 313.5 262.0
Debtors 334.2 342.0 305.5
Investments 8.2 8.0 8.2
Cash and deposits 70.7 67.9 74.3
------------------------------------
676.4 731.4 650.0
Creditors:
amounts falling due within one year
Borrowings and finance leases (78.9) (149.3) (65.1)
Other creditors (381.3) (348.0) (380.2)
------------------------------------
Net current assets 216.2 234.1 204.7
------------------------------------
Total assets less current liabilities 830.9 886.9 820.6
Creditors:
amounts falling due after more than one
year
Borrowings and finance leases (190.9) (248.0) (182.7)
Other creditors (27.8) (22.9) (25.9)
Provisions for liabilities and charges (72.3) (109.7) (81.0)
------------------------------------
Net assets 539.9 506.3 531.0
------------------------------------
Capital and reserves
Called up share capital 88.2 87.9 88.1
Share premium account 135.2 133.0 134.1
Revaluation reserve 1.0 1.0 1.0
Other reserves 1.6 1.6 1.6
Profit and loss account 310.6 279.7 303.1
------------------------------------
Equity shareholders' funds 536.6 503.2 527.9
------------------------------------
Minority interests 3.3 3.1 3.1
------------------------------------
539.9 506.3 531.0
------------------------------------
GROUP CASH FLOW STATEMENT
--------------------------------------------------------------------------------
6 months to 6 months to Year to
30 June 30 June 31 December
2003 2002 2002
#m #m #m
---------------------------------
Reconciliation of operating profit to net cash
inflow from operating activities
Operating profit 62.1 53.0 98.0
Depreciation/amortisation 41.5 44.0 89.3
Stocks decrease 1.2 0.9 16.8
Debtors increase (35.4) (35.4) (0.6)
Creditors and provisions 3.2 17.7 26.8
increase
---------------------------------
Net cash inflow from operating activities 72.6 80.2 230.3
---------------------------------
CASH FLOW STATEMENT
Net cash inflow from operating
activities 72.6 80.2 230.3
Return on investments and servicing of
finance (6.1) (11.4) (16.7)
Taxation (12.2) (0.2) (13.8)
Capital expenditure and financial
investment (23.5) (19.1) (11.3)
Acquisitions and disposals (14.9) (2.5) 26.3
Equity dividends paid (33.5) (33.4) (54.5)
---------------------------------
Cash flow before use of liquid
resources and financing (17.6) 13.6 160.3
Management of liquid resources (9.4) (15.8) (3.3)
Financing
Issue of ordinary shares 1.2 0.7 1.8
Increase/(decrease) in borrowings 21.8 2.4 (141.5)
---------------------------------
23.0 3.1 (139.7)
---------------------------------
(Decrease)/increase in cash in the period (4.0) 0.9 17.3
---------------------------------
Reconciliation of net cash to movement
in net borrowings
(Decrease)/increase in cash in
the period (4.0) 0.9 17.3
Cash (inflow)/outflow from
borrowings (21.8) (2.4) 141.5
Cash outflow from movement in
liquid resources 9.4 15.8 3.3
---------------------------------
Change in borrowings resulting (16.4) 14.3 162.1
from cash flows
Cash assumed with acquisitions - 0.6 -
Currency translation
differences (9.2) 1.0 9.7
---------------------------------
Movement in net borrowings in the
period (25.6) 15.9 171.8
Net borrowings at start of period (173.5) (345.3) (345.3)
---------------------------------
Net borrowings at end of period (199.1) (329.4) (173.5)
---------------------------------
STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES
6 months 6 months Year to
to 30 June to 30 June 31 December
2003 2002 2002
#m #m #m
---------------------------------
Profit for the period 34.2 30.1 55.4
Currency translation differences (5.4) 2.9 1.3
---------------------------------
Total recognised gains and losses for the
period 28.8 33.0 56.7
---------------------------------
GROUP HISTORICAL COST PROFITS AND LOSSES
There is no material difference between the profit before taxation and the
retained profit for each period as shown in the Group profit and loss account
and their historical cost equivalent
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
6 months 6 months Year to
to 30 June to 30 June 31 December
2003 2002 2002
#m #m #m
-------------------------------
Profit for the period 34.2 30.1 55.4
Dividends (21.2) (21.1) (54.6)
-------------------------------
13.0 9.0 0.8
Previously written off goodwill taken through
profit & loss account in arriving at the profit
for the period - - 33.3
Other recognised gains and losses relating to
the period (5.4) 2.9 1.2
New ordinary share capital issued 1.1 0.6 1.9
-------------------------------
Net increase in shareholders' funds for the
period 8.7 12.5 37.2
Shareholders' funds at start of period 527.9 490.7 490.7
-------------------------------
Shareholders' funds at end of period 536.6 503.2 527.9
-------------------------------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Segmental Analysis
Turnover Operating Profit
----------------------------- -----------------------------
6 mths 6 mths Year 6 mths 6 mths Year
to to to to to to
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2003 2002 2002 2003 2002 2002
#m #m #m #m #m #m
----------------------------- -----------------------------
(i) by activity:
before goodwill amortisation and rationalisation/restructuring
Fluid Controls 362 322 661 36.6 29.6 65.2
-------------------------------------------------------------------------------------
Severe Service 80 69 148 8.1 7.4 17.3
Fluid Power 205 190 379 17.4 12.2 25.3
Indoor Climate 77 63 134 11.1 10.0 22.6
-------------------------------------------------------------------------------------
Retail Dispense 222 223 437 19.2 22.4 42.3
-------------------------------------------------------------------------------------
Beverage Dispense 149 174 312 12.9 17.5 28.6
Merchandising
Systems 73 49 125 6.3 4.9 13.7
-------------------------------------------------------------------------------------
Building Products 196 193 365 18.2 18.5 33.5
----------------------------------------------------------------
780 738 1463 74.0 70.5 141.0
SSAP24 pension
credit - 2.5 5.0
-------------------------------------------------------------------------------------
Total continuing
operations 780 738 1463 74.0 73.0 146.0
-------------------------------------------------------------------------------------
after goodwill amortisation and rationalisation/restructuring
Fluid Controls 33.3 23.7 46.7
-------------------------------------------------------------------------------------
Severe Service 7.3 7.2 16.8
Fluid Power 15.5 7.6 9.8
Indoor Climate 10.5 8.9 20.1
-------------------------------------------------------------------------------------
Retail Dispense 17.6 14.5 26.5
-------------------------------------------------------------------------------------
Beverage Dispense 12.4 10.2 14.4
Merchandising
Systems 5.2 4.3 12.1
-------------------------------------------------------------------------------------
Building Products 11.2 10.5 18.5
---------------------------
62.1 48.7 91.7
SSAP24 pension credit - 2.5 5.0
---------------------------
Total continuing
operations 62.1 51.2 96.7
---------------------------
Operating Assets
--------------------------------------
6 mths 6 mths Year
to to to
30 June 30 June 31 Dec
2003 2002 2002
#m #m #m
--------------------------------------
by activity:
Fluid Controls 237 265 221
--------------------------------------------------------------------------------
Severe Service 29 32 48
Fluid Power 171 194 154
Indoor Climate 37 39 19
--------------------------------------------------------------------------------
Retail Dispense 123 130 109
--------------------------------------------------------------------------------
Beverage Dispense 95 109 82
Merchandising Systems 28 21 27
--------------------------------------------------------------------------------
Building Products 144 160 143
------------------------------------
504 555 473
SSAP24 pension credit
--------------------------------------------------------------------------------
Total continuing operations 504 555 473
--------------------------------------------------------------------------------
Turnover Operating Profit
------------------------------ -----------------------------
6 mths 6 mths Year 6 mths 6 mths Year
to to to to to to
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2003 2002 2002 2003 2002 2002
#m #m #m #m #m #m
------------------------------ -----------------------------
(ii) by
geographical
origin:
after goodwill amortisation and rationalisation/restructuring
UK 239 221 436 15.6 13.7 20.8
Rest of Europe 258 236 470 29.7 20.4 40.8
The
Americas 254 252 501 14.6 12.5 24.5
Asia/
Pacific 29 29 56 2.2 2.1 5.6
SSAP24 - 2.5 5.0
pension
credit
------------------------------ -----------------------------
Total
continuing
operations 780 738 1463 62.1 51.2 96.7
------------------------------ -----------------------------
Operating Assets
-----------------------------------
6 mths 6 mths Year
to to to
30 June 30 June 31 Dec
2003 2002 2002
#m #m #m
-----------------------------------
by geographical origin:
UK 150 183 159
Rest of Europe 199 208 171
The Americas 138 150 129
Asia/Pacific 17 14 14
SSAP24 pension credit
-----------------------------------
Total continuing operations 504 555 473
-----------------------------------
(iii) turnover by geographical destination:
6 mths 6 mths Year
to to to
30 June 30 June 31 Dec
2003 2002 2002
#m #m #m
-----------------------------------
UK 219 203 393
Germany 90 82 163
Rest of Europe 172 155 311
USA 222 224 438
Asia 41 44 80
Rest of World 36 30 78
-----------------------------------
Total continuing operations 780 738 1463
-----------------------------------
1. Segmental Analysis (continued)
Acquisitions
Acquisitions in the period were not sufficiently material that they warrant
separate disclosure on the face of the Profit and Loss account. Of the reported
increase in turnover and operating profit of continuing operations, #39m and
#2.6m respectively result from the 2003 acquisitions of Commtech Group (Indoor
Climate) and Fluid Kinetics (Severe Service) together with the extra months from
the 2002 acquisitions of DCI Marketing (Merchandising Systems) and STI (Severe
Service).
Discontinued
The amounts shown for discontinued operations in 2002 comprise the turnover and
operating profits of the businesses sold (Eley, Copper Fittings and Copper Tube,
all previously reported within Building Products and UK and Rest of Europe)
and closed (ISI Systems, previously reported within Fluid Power and Americas
and Rest of Europe).
Rationalisation/restructuring
Rationalisation/restructuring is analysed as follows:
6 months to 6 months to Year to
30 Jun 30 Jun 31 Dec
2003 2002 2002
#m #m #m
----------------------------------
Shown as rationalisation/restructuring of
continuing operations 2.4 13.4 31.3
Included within discontinued operations - 0.7 0.9
----------------------------------
Total rationalisation/restructuring charge 2.4 14.1 32.2
----------------------------------
2. Taxation
The effective tax rate for the year on profit before goodwill amortisation and
exceptional items is expected to be around 33% (year 2002: 32%).
3. Dividends
The Directors have declared an interim dividend for the current year
of 6.0p per share (2002: 6.0p) which will be paid on 20 October 2003 to
shareholders on the register on 19 September 2003.
4. Earnings per share
The weighted average number of shares in issue during the period was 352.4m,
353.2m diluted for the effect of outstanding share options (six months to 30
June 2002: 351.6m, 352.9m diluted). Earnings per share have been calculated on
earnings of #34.2m, (2002: #30.1m). The Directors consider that adjusted
earnings per share figures, using earnings as calculated below, give a more
meaningful indication of the underlying performance.
6 months to 6 months to Year to
30 Jun 30 Jun 31 Dec
2003 2002 2002
#m #m #m
---------------------------------------
Profit for the period 34.2 30.1 55.4
Goodwill amortisation 9.5 8.4 18.0
Exceptional items (after tax) - (4.1) (7.2)
Rationalisation/restructuring (after tax) 1.6 9.6 21.9
---------------------------------------
Earnings for adjusted EPS 45.3 44.0 88.1
---------------------------------------
5. Exchange rates
The profit and loss accounts of overseas subsidiaries are translated
into sterling at average rates of exchange for the period, balance sheets are
translated at period end rates. The main currencies are:
Average period rates Balance sheet rates
---------------------------------- -------------------------------------
6 months to 30 June Year 30 June 30 June 31 Dec
2003 2002 2002 2003 2002 2002
---------------------------------- -------------------------------------
Euro 1.46 1.61 1.59 1.44 1.54 1.53
US Dollar 1.61 1.45 1.51 1.65 1.52 1.61
6. Financial information
This interim statement has been reviewed by the Group's auditors having regard
to the bulletin Review of Interim Financial Information, issued by the Auditing
Practices Board. A copy of their unqualified review opinion is attached.
The comparative figures for the year ended 31 December 2002 are not the
Company's statutory accounts for that financial year. Those accounts have been
reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under Section 237(2) or (3) of the Companies Act 1985.
The Interim Report will be posted to shareholders on 12 September 2003 and will
be available from the same date at the Company's registered office, Lakeside,
Solihull Parkway, Birmingham Business Park, Birmingham, B37 7XZ.
NEXT TRADING ANNOUNCEMENT
Our next trading update will be issued on 19 December 2003.
ENQUIRIES
Enquiries to:
Graham Truscott Communications Director Tel: 0121 717 3712
Press release available on the internet at www.imiplc.com
Issued by:
Nick Oborne Weber Shandwick Square Mile Tel: 0207 067 0700
Independent review report by KPMG Audit Plc to IMI plc
Introduction
We have been engaged by the company to review the financial information set out
on pages 7 to 13 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
KPMG Audit Plc
Chartered Accountants
Birmingham
8 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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