Record profits set IMI up for £300m spending spree

Birmingham-based IMI Group will shed more jobs this year in a cost-reduction programme, but is looking to spend up to £300m on acquisitions, it said this week. It will cut a further 700 jobs this year, including about 150 in the UK. IMI has already shed labour by cutting overlap with its Norgren distribution networks, […]

Birmingham-based IMI Group will shed more jobs this year in a cost-reduction programme, but is looking to spend up to £300m on acquisitions, it said this week.

It will cut a further 700 jobs this year, including about 150 in the UK. IMI has already shed labour by cutting overlap with its Norgren distribution networks, after buying Stuttgart-based valve maker Herion, now part of IMI’s fluid power division.

The group posted record pre-tax profits for the year to December 31 of £167m. Sales edged up 1.5% to £1.45bn.

Deputy chief executive Nick Paul said IMI will focus on expanding its four divisions of drinks dispense, building products, fluid power and special engineering. The latter is centred on severe service valves for the oil and energy industry.

Acquisition targets are likely to be in the £100m bracket, and are unlikely to be within the UK, where IMI’s dominant market share could lead to competitions problems, Paul said. The UK has also fallen into third place in terms of IMI’s sales by geographical area, trailing behind continental Europe and the US.

In 1996, IMI had 50% of its employees in the UK. Now that figure is 32%.

Orders for the first quarter of 1999 fell on last year, but the situation is stabilising, the company said. The controls business in energy markets in Asia has been picking up.