A cautious outlook from engineering group IMI PLC (LON:IMI) sent its share price tumbling even though it raised its full-year dividend.
Organic revenues will rise a little in the first half of 2018, said the valves and controls specialist, with margins also modestly higher, helped by cost savings and better market conditions for precision engineering.
Cost-cutting and rationalisation has been the focus in recent years and IMI repeated that will remain the plan in 2018.
Lift from recent acquisition
Precision engineering has undergone a complete re-fit with cost reductions, in-sourcing and simplification of the structure and will get a lift from US automation group Bimba, recently acquired for £148mln, as it is integrated and overhauled.
Conditions were mixed in 2017, IMI added.
Strong growth in precision engineering's end markets towards the end of the year as vehicle markets rallied was offset by softness in the oil and gas sectors and power industry.
European construction markets helped the heating controls business while North America and China markets continued to grow.
Revenues over the year rose to 6% to £1.75bn, while profit before tax climbed 9% to £181mln.
The full-year dividend rises by 2% to 39.4p.