In a recent trading update to its shareholders West Midlands-based global engineering group IMI was cautiously upbeat over its prospects for 2004 after several years of intensive restructuring.
The company said there were signs of a modest improvement in some of its major markets including the US and Germany.
IMI has spent the past three years sharpening its focus on a limited number of core areas in which it believes it can achieve market-leading positions through heavy investment in technology R&D. These sectors include fluid controls, pneumatics and severe service valves, along with drinks dispensing systems and other products aimed at the retail merchandising sector.
The group has sold off its businesses outside these sectors, shedding operations in areas such as building products and copper tubing. It has also either moved its manufacturing operations to low-cost locations such as eastern Europe, Mexico and China, or outsourced them entirely to third parties.
IMI is investing the money raised by these disposals and cost savings in its core operations and hopes that 2004 will be the year it begins to reap the rewards.The company told its shareholders that sales and operating profits are expected to end the year ahead of 2002 and its balance sheet is strong.
‘If the recent improvement in general economic conditions gathers momentum this should provide added opportunity to make further progress,’ the trading update added.
However, IMI’s past is likely to come back to haunt it in the form of a fine by the European Commission.
The EC has been investigating alleged anti-competitive practices in the copper and fitting industry by a number of parties, including IMI.
Although the company sold off its copper operations last year, it retains responsibility for any EC sanctions and said it expects to be hit by a fine in the first half of the year.