IMI (IMI) H1 2024 earnings summary

Executive summary

• Achieved 5% organic sales/revenue growth and 6% organic adjusted operating profit growth in H1 2024, with adjusted operating margin up 10bps to 17.9%.

• Announced a £100m share buyback and a 10% increase in interim dividend; interim dividend now 10.0p per share.

• Complexity reduction programme delivered £4m in H1 benefits, on track for £15m full-year benefit.

• Full year adjusted EPS guidance maintained at 120p–126p.

• Management changes: CFO to step down in 2025; Jackie Hu appointed COO.

Financial highlights

• Revenue reached £1,098m, up 5% organically; adjusted operating profit £196m, up 6% organically.

• Adjusted operating margin improved to 17.9% (+10bps); adjusted basic EPS 54.7p (+1%).

• Statutory profit before tax £163m–£162.5m (+17%); statutory profit after tax £125.3m (+15%).

• Operating cash flow £130m; cash conversion at 66% due to working capital investment.

• Net debt reduced to £605.5m–£606m; net debt/EBITDA at 1.2x.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance maintained at 120–126p, with share count reduction offset by higher interest expense.

• FX headwinds expected to be greater than previously guided, with a 3% impact on full-year results.

• Process Automation order book provides strong visibility into 2025; transport expected to be flat to slightly down in H2.

• Interest charge forecast at £17m; tax rate at 24%.

• Weighted average number of shares reducing to 259m.