Why IMI Is Up 12% This Year

IMI (ISE: IMI.L) has advanced over 12% to 903 pence so far during 2012, making the share one of this year's better performers in the FTSE 100 (UKX).

The company, a global engineering group that focuses on the precise control and movement of fluids in critical applications, seems to have impressed investors with a series of encouraging statements.

During March, IMI published its annual results for the year to Dec. 31 2011. Revenue had grown 12%, to £2,131 million, and adjusted pre-tax profit rose 19% to £363.4 million. Adjusted earnings per share had soared 23% to 81.5 pence, and the total dividend for the year was raised by 15% to 30 pence per share.

During April, an interim management statement revealed that IMI had a positive start to 2012. Group revenues for the three months to the end of March were up 8% (reported), and 6% (organic), adjusted for currency exchange and acquisitions. There was good growth in both the "severe service" and merchandising businesses, with the rest of the group trading at similar levels to 2011.

Then in August, IMI's interim results for the six months to July 30, 2012, were published. Revenue had risen 6% to £1,090 million and adjusted pre-tax profit was up 4%, at £177.7 million. Adjusted earnings per share were up 7% to 40.4 pence, and the interim dividend was raised 7% to 11.8 pence per share.

Roberto Quarta, chairman of IMI, commented:

The Group has delivered a good set of results in the first half of the year with organic revenue growth of 5%, underlying earnings growth of 7% and a dividend increase of 7%. While the pace of revenue growth is likely to slow in the second half, given in particular the weakening economic conditions in Europe, we still expect to make further progress in the remainder of the year.

Notwithstanding the macroeconomic uncertainty, we continue to make good progress with the strategic development of the Group, with increased investment in new products and emerging markets, and ongoing utilisation of a strong balance sheet in securing further value-enhancing acquisitions.

IMI's next trading update will be published on Nov. 16, which -- even with the anticipated slower growth -- may still reveal further news that will reassure investors.

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