Flat profit for Invensys sees shares suffer

City A.M. Reporter
BRITISH engineer Invensys said yesterday its operating profit in the last three months was unchanged from a year ago because its industrial automation margins were squeezed and the domestic appliance market weakened.

In the full financial year ended March 2010 the company made an operating profit of £248m, a rise of two per cent on the previous year.

Invensys, which makes industrial process automation systems, signalling and control systems for railways and various control products for domestic appliances and other applications, said its automation systems division saw strong order growth in the three months to the end of December, as global industrial investment recovered but lower margins on some large greenfield projects kept operating profits flat.

Its rail division delivered a good performance in both revenue growth and operating profits, it said. Orders, however, were lower as it awaits the outcome of bids on several large contracts.

Analysts have long viewed Invensys as a candidate for break-up, a view that chief executive Ulf Henriksson appeared to endorse in November when he said China Southern Rail could acquire or take a stake in the business.

Shares in Invensys, which said it still expected “to deliver improved performance” for the full-year, closed 7.8 per cent lower at 329.6p.