Engineering giant IMI PLC (LON:IMI) has kept its full-year outlook in place, but warned investors that first-half revenues will be lower than last year due to “slowing market demand” in its precision engineering division.
Shares were down almost 5% to 965p on Thursday morning.
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The FTSE 250 group, which makes valves for drinks dispensers and generating equipment, said organic revenue for the three months to the end of March fell 2% versus the same period of 2018.
“In the first half of 2019 we still expect organic revenues to be lower than the same period in 2018 due to the phasing of Critical Engineering's order book and slowing market demand in the Industrial Automation sector in Precision Engineering,” read Thursday’s statement.
“Margins are expected to be broadly sIMIlar supported by our operational initiatives and an improved performance from Hydronic Engineering.”
Bosses aren’t expecting the Precision Engineering business to pick up any time soon, and now predict organic revenue and margins in that division, for both the half- and full-year, will be down year-on-year.
City broker Liberum said it was “unusual” for Precision forecasts to be trimmed so early into the year.
That guidance cut will offset a slight lift in forecasts for the Hydronic Engineering unit, which is expected to show top- and bottom-line growth in the first half “based on current market conditions”.
“Results for the first quarter of 2019 reflect a continuation of the mixed trading conditions experienced in the final quarter of 2018,” said IMI.
“Nonetheless, results for the full year are expected to be in line with current market expectations.”