At its annual general meeting, Sir Eric Pountain, chairman, conceded that the strength of sterling, particularly against the German mark, could lop pounds 15m off full-year profits - pounds 5m more than the group forecast at its full-year results in March. However he added that despite sterling, "we expect that the first half will be up on 1996."
IMI is heavily exposed to the German market through its building products interests, with around 45 per cent of group sales sold into Continental Europe. However analysts were unruffled by the news and IMI's shares slipped just 3p to 358p.
James Capel's Patrick Marshall said: "They already told us the bad stuff on sterling, so this is not big news. IMI has always been quite prudent. In all likelihood they will do better on profits than this statement suggests".
Zafar Khan, a analyst at SGST, pointed out that there had been some easing of currency pressures in the last few days. "I am not changing my pounds 153m profit forecast for the full year yet. But with some numbers as high as pounds 160m, I think there will be downgrades in the market."
IMI's finance director, Alan Emson, shrugged off suggestions that its statement was a profits warning. "We are simply giving our best estimate of how currency changes will affect us." He denied that the group's acquisition of German-based radiator valve group Heimer had left it over-exposed to the weak mark and European construction sector.Reuse content