IMI Shares Jump on Strong Earnings and £500m Buyback Announcement

IMI (LON: IMI) shares experienced a jump of over 3% in early trading following the release of its preliminary results for the year ended December 31, 2025.

The fluid and motion control solutions provider reported compounding earnings growth, underpinned by a £500 million share buyback program and guidance for a sixth consecutive year of mid-single-digit organic revenue growth.

The company showcased robust financial performance across key metrics. Revenue reached £2.304 billion, a 4% increase year-over-year. More impressively, operating profit climbed 6% to £460 million, translating to an adjusted operating margin of 20.0%, a 30 basis point improvement.

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Statutory figures revealed even stronger growth, with operating profit up 19% and operating margin expanding by 220 basis points to 18.3%. Profit before tax jumped 6% to £442 million.

Earnings per share (EPS) also saw significant gains, with adjusted basic EPS rising 8% to 132.3p. The company proposed a 10% increase in the final dividend to 34.2p per share, further rewarding shareholders. Free cash flow increased by 10% to £290 million, and return on invested capital improved by 60 basis points to 14.0%.

IMI’s strong cash generation allows for increased shareholder returns. The announced £500 million share buyback program signals management’s confidence in the company’s future prospects and commitment to efficient capital allocation. This move, coupled with the dividend increase, underscores IMI’s focus on enhancing shareholder value.

Key Growth Drivers:

• Automation Platform: Revenue within the Automation platform surged 8% organically, fueled by strong performance in Process Automation and resilient demand in Industrial Automation.
• Aftermarket Strength: Approximately 45% of revenue was generated from the higher-margin aftermarket, providing a stable and profitable revenue stream.
• Growth Hub Success: Record £206 million of Growth Hub orders, up 38%, demonstrate the company’s innovation and ability to capture new market opportunities.

CEO Roy Twite commented, “The execution of our growth strategy is creating significant value for shareholders, and we delivered another strong performance in 2025…we are compounding earnings growth.”

IMI’s outlook for 2026 remains positive, with the company anticipating another year of mid-single-digit organic revenue growth and adjusted basic EPS between 136p and 142p. This forecast is supported by expected growth in the Automation platform and continued demand in Climate Control.

While the adjusted operating margin is expected to be flat to slightly up due to cybersecurity investments, the overall outlook suggests continued financial strength.