IMI (LON:IMI) has reinstated dividend payments after the group said that its half-year results for the six months ended 30 June 2020 confirm “the resilience and quality” of the business.
The British-based engineering firm reported a pre-tax profit for the period of £116m, up 5% from £110m in H1 of 2019, despite revenues falling by 5% from £910m to £867m in 2020.
Having witnessed several weak markets in its second quarter, IMI said it benefited from early cost actions which supported the delivery of higher margins versus the first half of 2019.
The group said the decline in revenue was partly offset by a temporary surge in orders for ventilator components supplied by the company’s Life Sciences business which was shown to deliver sales growth of 82% in the first half, when compared to the same period in 2019.
After a “robust” first half profit and cash performance IMI has revisited its earlier decision to suspend the 2019 final dividend and will now pay the full 26.2p per share to shareholders.
Shares in IMI were trading 8.65% higher at 1,092.5p on Friday morning.
It is also recommending a 2020 interim dividend of 7.5p per share (2019: 14.9p per share). The interim distribution has been reset to reflect a dividend earnings cover baseline of 3.0x which IMI said will enable it ‘to deliver more effectively on its long-term growth ambitions.’
Outlook
The group said while markets continue to be volatile making future forecasts ‘challenging’, that it does not expect any material changes in the second half of 2020 and now expects full-year 2020 adjusted earnings per share to be between 65p and 70p.
“Our results confirm the resilience and quality of IMI's business model in what have been exceptional and demanding circumstances,” said Roy Twite, CEO of IMI.
He added, “Whilst we continue to protect our employees and operations, we have also been helping our customers, broadening our reputation for delivering industry solutions, and readying ourselves for when markets improve."
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