Rail boost for Invensys ahead of strong year

ENGINEERING group Invensys yesterday forecast an improved performance this year, as it was boosted by solid trading in its rail business.

The FTSE 250-listed firm, which makes control systems for nuclear power stations, industry, railways and domestic appliances, said overall performance in the three months from 20 September had continued in line with the first half.

“Subject to any significant changes to the global macroeconomic environment, we continue to believe that we will improve our performance for the year as a whole,” it said in a trading update.

Revenue improved at the Invensys Rail business – which the firm agreed to sell to Siemens in a £1.7bn deal in November – during the quarter, thanks to the start of several large contracts won last year. Operating profit in this division was ahead of the same quarter in 2011, the company said.

The engineer reiterated yesterday that the completion of its rail disposal to Germany’s Siemens will take place in the second quarter of this year. Following the green-light from shareholders, banks and the UK Pension Regulator, it is still waiting for approval from anti-trust regulators.

“The disposal of the rail business is a very good deal for shareholders, crystallising value and de-risking the remaining business with the pension agreement,” analysts at N+1 Singer said yesterday.