(Alliance News) - Engineering company IMI PLC on Thursday said coronavirus impact has been "modest" in the first three months of 2020, but had a profound effect on April trading performance.
The valve and actuator manufacturer said: "Business disruption, so far, has been reasonably modest, as a result of our great operational teams around the globe. Across the group, we have over 90% plant availability, India being the only territory where plants are closed, in line with government instruction".
For the three months to March-end, IMI recorded a 5% year-on-year drop in organic revenue. On an adjusted basis, revenues were 5% lower, reflecting an exchange rate headwind partially offset by the benefit of the PBM acquisition.
Profits, margins, and operating cash flow for the first quarter were all higher than the same period in the prior year. Overall orders in the quarter were higher versus 2019, supported by a temporary surge in orders within Life Sciences as well as new construction orders in IMI Critical division.
Performance in April, however, saw a more marked impact from coronavirus, with a 9% drop in organic sales due to a steep decline in IMI Precision unit's commercial vehicle segment and temporary construction site restrictions affecting IMI Hydronic divisions.
IMI said it is continuing to accelerate its cost reduction programme and expects GBP28 million in restructuring benefits and a further GBP30 million savings from other cost containment initiatives.
The company "refrained" from providing guidance, but intends to provide an update on performance if it sees more clarity on the virus impact.
As at the end of April, the company had immediately available liquidity of GBP381 million and net debt of GBP470 million.
IMI is scheduled to release its results for the six months to June 30 on July 24.
Shares in IMI were up 4.6% at 814.00 pence each in London on Thursday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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IMI (IMI)