IMI plc: Another year of high quality revenue and profit growth

IMI plc is a global engineering company listed on the London Stock Exchange and is a constituent of the FTSE100, the FTSE4Good Index and has a market capitalisation of £6.9bn.

Full year results to 31 December 2025 were published on 6 March and we were delighted to welcome Edward Hann, Head of Investor Relations, to present the results and outline the prospects for 2026. A recording of the webinar is available here.

The company delivered another strong year, marking the fifth consecutive year of mid‑single‑digit organic revenue growth and continued earnings expansion. Organic revenue grew by 5%, organic adjusted operating profit increased by 8%, and the group achieved a 20% operating margin for the first time. Adjusted basic earnings per share rose 8% year‑on‑year, supported by strong operating leverage and continued strategic execution. IMI also generated strong cash flow and remains committed to deploying capital into organic investment, bolt‑on acquisitions and shareholder returns. Alongside the results, the company announced a £500 million share buyback and proposed a 10% increase to the final dividend.

Organic revenue increased by 5%, with adjusted operating profit reaching £460 million, representing 8% organic growth. The operating margin improved to 20%, a key milestone and an increase of 580 basis points since 2019. Adjusted basic earnings per share increased to 132.3 pence, also up 8% year‑on‑year.The company continues to generate strong cash flow, with cash conversion of approximately 96%. Net debt to EBITDA stood at around 1x at the year end, which is at the bottom of IMI’s target leverage range of 1–2x. Net interest charges were £17.7 million and the effective tax rate increased to 25.4%, broadly in line with previous guidance.IMI’s restructuring programme, which concluded in 2024, streamlined the company’s global footprint and laid the foundation for future growth. Management emphasised that the strategic transformation since 2019 has significantly strengthened profitability and operational efficiency while enabling increased investment in growth initiatives.

Performance across IMI’s business platforms was mixed but overall positive. The Automation platform delivered strong growth, with organic revenue increasing by 8%. Process Automation performed particularly well, supported by strong order intake across energy infrastructure markets including conventional power and nuclear power. After adjusting for the planned disposal of TruFlo Marine, orders grew by approximately 5% organically.The high‑margin aftermarket continued to perform strongly, with orders up 11% compared with 2024. This growth reflects IMI’s expanding installed base and the increasing importance of service, maintenance and upgrades in critical energy and industrial infrastructure.

Industrial Automation delivered a resilient performance despite uncertain market conditions, with organic revenue declining slightly by 1%. Meanwhile, the Life Technology platform recorded organic growth of around 1%. Within this platform, Climate Control delivered strong growth of 5%, benefiting from demand for energy‑efficient building technologies and smart connected HVAC solutions.The Life Science and Fluid Control business was broadly flat year‑on‑year as the global life science device market stabilised after previous volatility. Transport revenues declined by 6%, reflecting weaker global heavy‑duty truck markets, although this segment represents a relatively small portion of the overall business.

IMI’s growth strategy, launched in 2019, continues to drive performance improvements across the business. The company has aligned its operations around three long‑term structural growth trends: energy, automation and healthcare. These megatrends provide attractive long‑term opportunities and underpin the company’s strategy of delivering sustainable and profitable growth.A key element of the strategy is the focus on high‑value engineered solutions for fluid and motion control applications. Although IMI’s products often represent only a small proportion of the total system cost, they can have a significant impact on performance, efficiency and safety. This creates strong pricing power and deep customer relationships.The company’s Growth Hub model plays an important role in product innovation. Through this model, teams work in short development cycles to address specific customer challenges and validate new solutions quickly. Products developed through this programme generated £206 million of orders in 2025, representing a 38% increase compared with the previous year.IMI is also investing in digital technologies and artificial intelligence to enhance innovation and operational efficiency. Employee engagement remains high and productivity has increased by 31% since 2019, reflecting the success of the company’s performance culture and operating model.

The nuclear power market also experienced renewed momentum in 2025, driven by plant life extension programmes and increased investment in new capacity. IMI saw particularly strong growth in the nuclear aftermarket, where orders increased by approximately 33% year‑on‑year.Liquefied natural gas infrastructure is another area of opportunity, particularly in North America where new liquefaction capacity is being developed. IMI’s fluid control solutions are used throughout the LNG value chain.The rapid expansion of data centres is also supporting demand for IMI’s climate control technologies. The company’s smart valves and liquid cooling solutions help manage thermal loads in high‑performance computing environments, ensuring efficient and reliable operations. Orders related to data centre cooling more than doubled in 2025.

IMI maintains a disciplined capital allocation framework focused on three priorities: reinvestment in organic growth, bolt‑on acquisitions and shareholder returns. The company has invested heavily in organic growth initiatives, including innovation, digital tools and operational capabilities.Since 2019, IMI has deployed more than £400 million into bolt‑on acquisitions designed to expand its technology capabilities and strengthen its positions in attractive growth markets. The acquisition of TWTG, a sensor solutions provider, for €25 million in 2024 is an example of this strategy. TWTG enhances IMI’s asset monitoring capabilities and supports further growth in aftermarket services.Management emphasised that acquisition discipline remains critical. Target businesses are typically privately owned companies valued between £50 million and £300 million, and must meet strict return criteria aligned with the company’s cost of capital.Looking ahead, IMI expects to deliver its sixth consecutive year of mid‑single‑digit organic revenue growth in 2026. Adjusted EPS is expected to be between 136 pence and 142 pence.  Operating margins are expected to remain flat to slightly higher in 2026 due to additional cybersecurity investments, although IMI expects margins to continue improving over the medium term. Over a three‑year horizon, management believes operating margins could rise to around 22% if revenue growth continues at mid‑single‑digit levels.

The investment case remains compelling: IMI is compounding EPS growth and has done that consistently over many years, there is a strong balance sheet and strong cash generation enables investment in future R&D alongside significant returns to shareholders in the form of buy backs and dividends. Management have guided for 2026 earnings of between 132p and 142p per share which would represent another year of consistent growth. They normally beat their guidance too.

A recording of the webinar is available here. If you would like further information on other webinars organised by Yellowstone Advisory, please contact info@yellowstoneadvisory.com