IMI plc Reports Record Profits and Strong Cash Generation in 2024
Why we think this is good
IMI plc has delivered a robust performance in 2024, with record profits and strong cash generation. The company reported a 6% increase in adjusted operating profit to £436m and a 5% rise in adjusted EPS to 122.5p. Organic revenue growth of 4% demonstrates the company's ability to expand in its markets. The Automation platform performed exceptionally well with 8% organic growth. Margins improved across both platforms, with the adjusted operating margin increasing by 100bps to 19.7%. The company's strong balance sheet, with net debt/EBITDA at 1.0x, and improved cash conversion at 92% provide financial stability. Looking ahead, IMI expects another year of strong financial and strategic progress in 2025, with projected mid-single digit organic revenue growth. However, it's important to note some challenges, including softer market conditions in Life Science & Fluid Control and Transport sectors, as well as the potential impact of a recent cyber incident. Despite these challenges, the overall picture remains positive, supported by the company's strategic execution and strong pricing power.
Key Points
- Record profits with adjusted operating profit up 6% to £436m
- Organic revenue growth of 4%, driven by 8% growth in Automation platform
- Adjusted operating margin improved by 100bps to 19.7%, target raised to 20%+
- Free cash flow before corporate activity increased to £263m
- Strong balance sheet with net debt / EBITDA of 1.0x
- 10% increase in final dividend to 21.1p per share
- Further £200m share buyback announced
- Expect mid-single digit organic revenue growth in 2025
- Full year adjusted basic EPS expected to be between 129p and 136p for 2025
- Softer market conditions in Life Science & Fluid Control and Transport sectors
- Cyber incident in February 2025 with expected impact of £20m-£25m
Summary
IMI plc, a global leader in fluid and motion control, has reported strong results for 2024. Adjusted operating profit increased by 6% to £436m, while organic revenue grew by 4% to £2,210m. The company's adjusted operating margin improved by 100bps to 19.7%, with a new target set at 20%+. Free cash flow before corporate activity rose to £263m, demonstrating strong cash generation. The Automation platform performed exceptionally well with 8% organic growth, although the Life Technology platform saw a 2% organic decline. Looking ahead, IMI expects another year of strong financial and strategic progress in 2025, with projected adjusted basic EPS between 129p and 136p. The company's strong balance sheet, with net debt/EBITDA at 1.0x, supports its growth strategy and shareholder returns, including a 10% increase in the final dividend and a further £200m share buyback announced.