IMI to close Birmingham factory

A fall in nuclear orders has led to plans to shut the company's Witton base

Engineering group IMI has announced plans to shut its Birmingham factory following a significant drop in orders in its nuclear division, and expects to be hit by up to £10 million in restructuring costs as a result.

FTSE-listed IMI is headquartered in Birmingham and specialises in the control and movement of fluid in applications such as clean energy, energy efficiency, healthcare and increasing automation.

In its half-year results IMI said: “Order intake in nuclear was disappointing, down 37% compared to the first half of last year when we secured a number of orders for safety related projects and because of a material drop in demand levels at IMI Components, which supplies non-valve components into the nuclear fuel enrichment market.

“This has resulted in an exceptional impairment charge of £1 million being taken in the first half results and the proposed closure of the IMI Components manufacturing site in Birmingham,” IMI added.

The news comes as IMI reported a 5% fall in pre-tax profit to £127 million for the six months to 30 June.

The company, which generates more than 90% of its revenue outside Britain, reported a 3% drop in revenue to £809 million, which included the effects of the strong pound.

Adjusted operating profit fell to £137 million for the six months, from £146 million pounds a year earlier.

The company said it has developed a five year plan to “harness its full potential to deliver sustainable accelerated growth and shareholder value”.

Mark Selway, chief executive of IMI, said: “The opportunities are significant and that is reflected in our ambition to double the group's 2014 operating profits over the next five years, while retaining our financial discipline.”