But the company said it performed better in the six months ending June 1992 than during the second half of 1991. In the full year, 1991 pre-tax profits fell 36 per cent to pounds 73.3m and sales dropped below pounds 1bn.
IMI said economic recovery was proving 'elusive in the UK and fragile in the US'. Gary Allen, chief executive, said: 'As far as the UK is concerned order levels are flat. In the US there are signs of recovery, although there are doubts about the election.
'When you talk to the guys running the operations, that American confidence that normally shows through isn't quite there.'
Overseas trading profits were ahead by 14.8 per cent as Germany and the US proved solid markets for drink-dispensing. Replumbing programmes in the former East Germany pushed up demand for copper tubing, although that division traded at a loss.
Sales in the fluid power division, which manufactures pneumatic equipment, edged forward pounds 3m to pounds 104m but profits were down, also by pounds 3m.
Mr Allen said IMI took advantage of the slack domestic market to spend pounds 3m on reducing stock and rationalising factories. 'If we hadn't rationalised, profits would have been the same,' he said.
IMI Titanium made a loss. Margins came under pressure because of the low price paid for the metal by aircraft manufacturers. Mr Allen described the figures as a blow but expects to break even at the year- end. 'We have reduced costs, we are getting better prices from raw material suppliers and Rolls-Royce seem to have ended destocking.'
IMI's gearing stands at 31 per cent. It spent pounds 14m on acquisitions and pounds 24m on capital expenditure. 'It is important to maintain cost and production levels,' Mr Allen said. 'The UK is going through a difficult time, but that is not a good reason to cut back on it.'
Rationalisation accounted for pounds 2.5m and 600 jobs were cut, half in the UK and half overseas. There will be further rationalisation in the second half, but fewer jobs are expected to be lost.
Ewan Fraser, an analyst at James Capel who has trimmed his year-end profits forecast by pounds 2m to pounds 78m to take in the fluid power rationalisation, said the figures were very satisfactory.
'This is the most efficient company in the sector,' he said. 'Its two big overseas markets are both ahead, even though the US is still in recession.'
Earnings fell 9 per cent to 7.3p but the interim dividend is unchanged at 4.2p. The shares fell 18p to 229p.Reuse content