FTSE 100-listed IMI soared to the top of the index yesterday morning after posting solid first-half results which its chief executive said were boosted by the US shale gas revolution.
The engineering firm, which specialises in fluid control systems such as valves, reported a four per cent rise in pre-tax profits to £150.1m and increased its dividend by eight per cent to 12.8p. The results were broadly in line with analysts’ expectations. Shares rose 5.5 per cent yesterday morning and closed 5.8 per cent higher at £14.91.
The severe service division, which makes valves for the energy industry, saw its order book grow by 19 per cent in the first half. “Our severe service division performed well and that’s thanks to the shale gas boom,” chief executive Martin Lamb told City A.M.
“The US is going to become an exporter of energy over the next few years and they need valves for that. They are converting shale into plastic which they need valves for too.”
Improved trading is expected in the second half of the year, with IMI’s commercial vehicle business benefitting from new European emissions rules.
Lamb added that he saw opportunities in emerging markets, particularly China, where he predicted 20 per cent growth for the next few years due to energy and infrastructure investment.
IMI also said yesterday that it had acquired Canada’s Analytical Flow Products for up to £41m. Lamb said that IMI is targeting £1bn in acquisition spend over the next five years and is in talks with potential targets.