IMI PLC Announces £500m Share Buyback and Sixth Consecutive Year of Growth

IMI PLC 2025 results: steady growth, fatter margins, big buyback

IMI has posted another solid year. For 2025, revenue rose 4% to £2,304m, with organic growth at 5% once you strip out currency moves and M&A noise. Adjusted operating profit increased 6% to £460m and margins nudged up 30bps to 20.0%. Statutory operating profit jumped 19% to £422m as the multi-year restructuring washed through.

Adjusted basic EPS came in at 132.3p, up 8%, continuing a 10% CAGR since IMI launched its growth strategy in 2019. Cash conversion was strong at 96% and free cash flow rose 10% to £290m. Return on invested capital improved to 14.0%.

£500m share buyback and a 10% dividend increase

Two clear signals on shareholder returns. First, IMI is recommending a final dividend of 23.2p, taking the full-year dividend to 34.2p, up 10%. Second, it has announced a £500m share buyback. Net debt to EBITDA sits at 1.0x, the bottom of the 1x-2x target range, giving the headroom to return capital while keeping M&A optionality.

Management guides to a 2026 weighted average share count of 238m following the repurchase. Fewer shares should make future EPS more punchy, all else equal.

Key numbers investors should know

Metric	2025	2024	Change
Revenue	£2,304m	£2,210m	+4% (+5% organic)
Adjusted operating profit	£460m	£436m	+6% (+8% organic)
Adjusted operating margin	20.0%	19.7%	+30bps
Statutory operating profit	£422m	£356m	+19%
Adjusted basic EPS	132.3p	122.5p	+8%
Statutory basic EPS	124.3p	96.0p	+29%
Free cash flow	£290m	£263m	+10%
ROIC	14.0%	13.4%	+60bps
Dividend per share	34.2p	31.1p	+10%
Net debt / EBITDA	1.0x	1.0x	Flat

Where the growth actually came from

Automation platform did the heavy lifting

• Automation revenue rose 6% to £1,504m, up 8% organically. Adjusted operating profit increased 9% to £314m, with margin up 40bps to 20.9%.
• Process Automation stood out: organic revenue +12% and aftermarket orders +11% organically. Total order intake was £1,071m, up 7% organically, leaving a closing order book of £875m.
• Industrial Automation was resilient in softer markets, down 1% organically.

Life Technology held up, mixed by sector

• Life Technology revenue edged up 1% organically to £800m. Adjusted operating profit was flat at £146m, with margin slightly lower at 18.2%.
• Climate Control grew 5% organically on strong demand for energy-saving kit and connected products, including advanced cooling for data centres.
• Life Science & Fluid Control was broadly flat as markets stabilised. Transport fell 6% organically, in line with the global heavy duty truck market.

Aftermarket and innovation are doing the compounding

• About 45% of group revenue now comes from the higher-margin aftermarket, which supports pricing power and recurring cash flows.
• Growth Hub orders hit a record £206m, up 38%. Orders related to data centres more than doubled to £18m, and conventional power orders rose 20% organically as electrification and AI demand push up energy needs.

2026 outlook and guidance

IMI expects a sixth consecutive year of mid-single digit organic revenue growth in 2026 and guides adjusted basic EPS to 136p-142p. Automation should see good organic growth, underpinned by the record Process Automation order book and a flat to modestly higher Industrial Automation outcome. Life Technology is guided to modest organic growth, with Climate Control still healthy and Life Science & Fluid Control stable. Transport is expected to be broadly flat.

Margins are guided to be flat to slightly up. Strong operating leverage is being offset by extra cyber security investment. Assumptions include completion of the Truflo Marine disposal around mid-2026, a £20m net interest charge, a 26.3% tax rate and an average share count of 238m. FX is not expected to have a material impact.

Cash generation and balance sheet: fuel for buybacks and bolt-ons

Adjusted operating cash flow was £440m with 96% conversion. Free cash flow before corporate activity was £289.9m. Net debt closed at £532.8m, down £15m year on year, despite £80.6m of dividends and £201.4m spent on the 2025 buyback. Committed bank facilities of £300m were undrawn at year end. That balance sheet gives IMI flexibility to keep investing, pursue selective bolt-on M&A and fund the newly announced £500m repurchase.

Strategy in motion: focus, execution, and a cleaner portfolio

• IMI’s medium-term targets remain on track: 5% organic revenue CAGR (2021-2025 average), 20%+ adjusted operating margin delivered at 20.0%, cash conversion 96%, ROIC 14.0%.
• Portfolio work continues: sale of Truflo Marine agreed for £225m, expected to complete mid-2026, further aligning the group to Energy, Automation and Healthcare.
• Transport sector review is ongoing; the sector was 7% of 2025 sales and remains under strategic evaluation.

What’s good, and what to watch

Reasons to be positive

• Compounding engine is working: five years of mid-single digit organic revenue growth and steadily rising margins.
• Aftermarket at roughly 45% of sales supports profitability and resilience.
• Record Growth Hub orders and expanding opportunities in data centres and conventional power.
• Big capital return: £500m buyback plus a 10% dividend hike, with leverage still at 1.0x.

Risks and watch-outs

• Industrial cycles still matter: Industrial Automation was slightly down in 2025 and could remain patchy.
• Transport remains soft and is under review; 2026 is guided as flat.
• Cyber security spend is going up after a 2025 incident, which may temper margin expansion near term. Related 2025 costs of £27m were treated as adjusting items.
• Higher tax rate assumed for 2026 at 26.3% and net interest guided at £20m.
• Truflo Marine disposal is subject to approvals; timing and proceeds are assumed but not yet complete.

My take: quality compounding with shareholder-friendly discipline

This is a high-quality print from IMI. The numbers show disciplined execution: organic growth of 5%, margins at 20.0%, cash conversion at 96% and ROIC moving up to 14.0%. The mix is improving, with aftermarket nearing half of sales, and the Growth Hub is clearly translating innovation into orders. The £500m buyback and 10% dividend increase underline confidence and should be accretive given the guided share count reduction.

Near term, the drag from Transport and investment in cyber resilience keep margin progress modest, and the macro picture for general industrial demand is never bulletproof. But the strong Process Automation order book, the data centre tailwind and healthy balance sheet provide good visibility.

Overall, I see IMI as a steady compounder with sensible capital allocation. For investors, the headline is simple: cash-rich operations, a growing high-margin aftermarket, and a sizeable buyback that should support EPS growth into 2026.

Quick jargon buster

• Organic growth: growth excluding the effects of acquisitions, disposals and currency movements.
• Aftermarket: revenue from servicing and replacing parts in the installed base. Typically higher margin and more resilient than original equipment sales.
• bps: basis points. 100bps equals 1 percentage point.