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  Hydronic Controls
  Drinks Dispense
 

Fluid Power
  Energy Controls
Board of Directors
Chairman's Statement
 
 
   
 
  We are currently engaged in a detailed review of our businesses and future plans for the Group. This strategy review is making good progress. We have established clear criteria by which to judge our businesses and their potential for profitable growth both organic and by acquisition. We have a number of businesses which in our view already fit these criteria well. Some have great potential but will require significant restructuring. Some will not meet the requirements.
  Whilst the review is not yet complete, it is already clear we will incur restructuring costs of around £40m this year. The anticipated payback for the majority of programmes is two years.

Up to half of the benefits arising will be reinvested on a continuing basis in product and market development designed to accelerate long term growth.

I would like to express my thanks for the significant contribution of our Chairman, Sir Eric Pountain, who will step down at the Annual General Meeting in May, and of Gary Allen who replaces him as Non-executive Chairman. I look forward to continuing my relationship with Gary in his new role. I inherit an excellent base from which to take IMI forward.

 

Year 2000 Results

For the year 2000 we are able to report sales and profit ahead of the previous year although the second half profit was lower. In the interim results we referred to our businesses having to cope with a number of sector specific challenges.

In Hydronic Controls, operating profit from the Polypipe businesses was £7m lower than the full year 1999 largely as a result of the sharp rise in raw material costs; Drinks Dispense continued to suffer from a depressed beverage market although cost reductions improved profit in the second half; in Fluid Power the improvement in Europe was partially offset by the slowdown in the US automotive sector, particularly in the second half; Energy Controls responded well to increased demand throughout the year. A more detailed review of our four business can be found in the Business Areas of the website.
 

Outlook

Current trading continues to be challenging. A deteriorating position in the US, which represents 25% of our sales, is being offset by continued strength in a number of our European markets. Whilst the position may change, there is no immediate sign of the slowing US economy impacting prospects elsewhere.
   
   
 
 

Martin Lamb Chief Executive
12 March 2001