(Alliance News) - IMI PLC on Friday posted a reduced annual profit due to a drop in revenue from two of its three divisions and said it expects coronavirus to hurt its first half performance in 2020.
Shares in the FTSE 250-listed engineering firm were down 3.9% at 954.00 pence in London in morning trading.
Birmingham-based IMI reported a GBP189.3 million pretax profit for 2019, coming in 11% below 2018's profit of GBP212.9 million as revenue fell 2.1% to GBP1.87 billion from GBP1.91 billion.
Within the GBP1.87 billion revenue figure, IMI Precision Engineering revenue was down 1.0% at GBP907 million from GBP916 million and IMI Critical Engineering revenue fell 4.5% to GBP651 million from GBP682 million.
Only IMI Hydronic Engineering outperformed 2018, with revenue up 1.9% at GBP315 million from GBP309 million.
Operating costs were also higher at GBP609.0 million versus GBP582.3 million the previous year.
IMI increased its final dividend by 0.8% to 26.2p per share, taking the annual total up 1.2% to 41.1p per share from 40.6p per share.
In light of the coronavirus outbreak in China, IMI is expecting its organic revenue in the first half of 2020 to be lower than in 2019.
Chief Executive Roy Twite, who was appointed in May, said: "It is difficult to predict the ultimate impact the coronavirus will have on global supply chains and demand. Based on no worsening of the current situation, we expect first half organic revenues to be lower than the first half of 2019, given the end market weakness in the Factory Automation and Commercial Vehicle sectors. Our continuing business improvement initiatives are expected to enable us to maintain our margins in the first half of the year."
The company has two sites in China, both in Shanghai, with China representing around 8% of its 2019 revenue and around another 8% possibly hurt by supply chain sourcing or customer exports into China.
"IMI continues to actively monitor the situation to ensure we take the necessary steps to protect our employees and work with customers and suppliers to minimise disruption," the company said.
China reported 44 more deaths from the novel coronavirus epidemic on Friday and 327 fresh cases, the lowest daily figure for new infections in more than a month. The death toll now stands at 2,788 in mainland China, according to the National Health Commission.
Outside of China, the virus is spreading at a faster pace. Nigeria on Friday announced the first confirmed case of the novel coronavirus in sub-Saharan Africa - an Italian citizen who works in Nigeria and returned from Milan earlier this week.
By Anna Farley; annafarley@alliancenews.com
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