* Profit up 44 pct to 304.4 mln stg (consensus 295 mln stg)
* Revenus up 7 pct to 1.91 bln stg , in line with consensus
* Targets 20 pct margins in core fluid controls businesses
* Raises final dividend 29 percent to 17p
* Shares up 5.2 percent
(Adds executive, analyst comments; updates shares)
By Adveith Nair
LONDON, March 3 British engineering firm IMI
(IMI.L) raised its long-term margin outlook at its key fluid
controls business, where the company plans to shift more
manufacturing to low-cost economies.
The maker of power generation equipment and drink dispensers
set a margin target of 20 percent for its fluid controls unit,
compared with an earlier target of 15 percent.
"A combination of new products with higher margins, and
continued investments in a lower cost supply chain, will enable
us to deliver against those higher margin targets," Chief
Executive Martin Lamb said in an interview, after the company
reported a 44 percent increase in full-year profit.
"Forty percent of our manufacturing today is done in
low-cost economies," Lamb said. "That is going to grow to about
55 percent or more over the next three or four years, up from
less than five percent a few years ago."
The fluid control businesses include manufacturing of indoor
climate control systems, motion and fluid control systems, and
also control valves for power generation plants and oil and gas
Analysts at Investec said in a note the new targets, if
achieved, "should propel IMI into the 'quality' league of
Arbuthnot analysts said the target was "well within the
Shares in Birmingham-based IMI rose 5.2 percent to 931 pence
at 0930 GMT on Thursday on the London Stock Exchange, and were
among the top percentage gainers on the FTSE 100 .FTSE.
IMI said 2010 operating margins at its fluid controls
businesses were 18.3 percent.
This business, which accounted for more than a third of
total group revenue, posted a 31 percent rise in sales helped by
improving market conditions.
IMI, which was promoted to Britain's blue-chip FTSE 100
index in December, reported a pretax profit of 304.4 million
pounds ($497.1 million), on sales 7 percent higher at 1.91
The strong results also prompted IMI to raise its final
dividend 29 percent to 17 pence, making a total of 26 pence.
(Reporting by Adveith Nair; editing by Paul Hoskins)