LONDON (ShareCast) - (ShareCast News) - Sales at IMI, the fluid control engineer, declined more than expected in the first six months of the year, as its markets continued to provide a challenging backdrop, with a tentative warning about full year orders.
While the order book remained resilient year-on-year with no significant cancellations, management expressed caution that "some projects which are scheduled to ship this year could still shift into 2016, which may impact full year performance".

First-half sales fell 5% to £765m, down 2% on an 'organic' basis adjusting for forex movements and excluding exceptional issues, short of consensus forecasts of £793m.

Chief executive Mark Selway said organic revenue in the remainder of the year is expected fall by a "comparable percentage" but second half margins will stay roughly as they are, supported by improved results in critical engineering (CE) together with second-half seasonality and new product sales in hydronic.

By division, CE declined 6%, precision engineering fell 1% due to weakness at Brazil and China, while hydronic engineering rose 1%.

Operating profits fell 15% to £116m, down 9% organic and 3% short of consensus, as margins contracted by 180 basis points to 15.2%. Earnings shrank 13% to 30.3p per share.

The group enjoyed strong cash generation of £82m in the half and increased the interim dividend 2% to 13.9p.

CE order intake slipped 6% on a reported basis, with aftermarket orders up 5% organically and oil & gas orders up 8%. Nuclear, power and petrochemical orders all declined more than expected, reflecting the slowdown in China.



Vesuvius reported a decline in interim pre-tax profit due to a decline in global steel output and inventory volumes, which dragged revenue lower in the first half.

The molten metal flow engineering company said its pre-tax profit declined 6.1% year-on-year to £37.9m, while the drop in global steel output brought revenue 3.7% to £702.6m.

However, the FTSE 250 group said the decline in revenue was partly offset by an improvement in its return on sales to 10%, as the company rolled out a series of cost-cutting measures and implement changes aimed at improve productivity.

Vesuvius added it has begun a restructuring programme to address the changes developing in its end markets, indicating the plan will see the company booking a charge of approximately £20m in 2015 and 2016, with savings of £10m expected from 2017 onwards.

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