Half Year 2026 Imi PLC Earnings Call Transcript
Key Points
- IMI PLC (IMIUY) delivered 5% organic revenue growth in the first half, with growth across all business segments.
- Organic adjusted operating profit increased 8% year-over-year, with adjusted operating margin expanding 50 basis points to 18.7%.
- Free cash flow improved significantly to GBP171 million, up from GBP30 million in the prior-year period, with cash conversion at 96%.
- Growth Hub orders surged 22% to GBP78 million, and the company won a major GBP48 million Nuclear New Construction order, covering deliveries over a decade.
- The company returned over GBP300 million to shareholders in the first half, including a 10% increase in the interim dividend and progress on its GBP500 million share buyback program.
- Energy order intake grew 56% organically, with conventional power orders doubling and data center orders tripling to GBP18 million.
- The company reaffirmed its full-year guidance for adjusted EPS of 136p-142p, on track for a sixth consecutive year of mid-single-digit organic revenue growth.
- The company faces ongoing cybersecurity investment costs, which partially offset margin expansion and are expected to continue impacting 2026 margins.
- There is a risk of up to GBP30 million in Middle East shipments being pushed out due to geopolitical events, though the risk has reduced.
- Life Science & Fluid Control growth remains modest, with the company only expecting a slight improvement in 2026, not a return to previous high growth levels.
- Industrial Automation faces a tougher comparator in the second half due to cyber-related catch-up in 2025, and the 60-day moving average for orders is only slightly up at 2%.
- The Transport segment remains under strategic review, with uncertainty about its future within the group despite improved performance.
- The M&A environment is competitive, with high multiples making it challenging to find bolt-on acquisitions that meet the company's strict return criteria.
- The company's guidance assumes no material impact from foreign exchange rates, which could be a risk given global currency volatility.
(video playing)
Good morning, everybody, and welcome to IMI's 2026 interim results presentation. I am joined here today by our CFO, Luke Grant. Together, we're going to take you through what was a strong first-half performance, and I'd like to begin by thanking our people.
It is a real privilege to lead such a talented and committed team. And this first-half performance is a direct reflection of their hard work and their dedication. We delivered 5% organic revenue growth in the first half with growth across all of IMI.
Organic adjusted operating profit was 8% higher than the same period last year. Growth Hub continues to deliver, with orders up 22% to GBP78 million despite a strong prior-year comparator. And we saw a significant improvement in free cash flow generation. We are committed to deploying this capital for growth and to enhance shareholder returns. We returned over GBP300 million to shareholders in the first half and are declaring another 10% increase in the interim dividend.
I am pleased to
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