Invensys sees better 2011 on strong orders

City A.M. Reporter
ENGINEER Invensys yesterday said it would perform better this year as its markets in industrial systems, railways and appliances recovered, after currency movements helped full-year operating profit rise 2 per cent.

“We have emerged stronger and with increased confidence in our growth prospects,” chief executive Ulf Henriksson said. “"Our order book increased by 11 percent to £2.3bn -- it is at the highest level since we began our turnround five years ago.”

He said the group expected to deliver an improvement in full-year profit for the year to end-March 2011.

The company, which makes controls for washing machines, signalling for railways and automated systems for nuclear power stations, posted adjusted operating profit of £248m on revenue 2 per cent lower at £2.24bn for the year to end-March.

At constant exchange rates, operating profit was down 4 per cent and revenue fell 8 per cent, the company said, during what it termed the worst economic climate for decades. Its basic earnings per share rose 6 percent to 18.5p.

Emerging markets were increasingly important for Invensys, Henriksson said, particularly in operations management, where there had not been an early recovery in North America and Europe.

But the group won contracts on the Jubail Export Refinery Project in Saudi Arabia, due to be completed in 2013, and on India's first 4,000 megawatt power plant, he said.

Profit at the controls business, up 96 per cent at constant exchange rates, was boosted by cost cuts, and although revenue was down, US consumers had begun spending again on appliances in the second half, he said.

The group supplies Whirlpool, Electrolux and Bosch.

Analyst Harry Philips at Evolution Securities said the group had delivered a “really solid” set of results. Nevertheless, shares in the group, which have increased 25 per cent in the last 12 months, closed 2.2 per cent lower at 279p last night.