British engineering firm IMI plc has initiated a substantial £500 million share buyback program, marking a significant return of capital to shareholders. The company launched the first £250 million tranche on Monday, March 9, 2026, appointing J.P. Morgan Securities to manage the repurchase. All shares acquired under the program are slated for cancellation, with the initiative authorized to run until December 31, 2026.
Strong Financial Performance in 2025
This capital return strategy follows the release of IMI's full-year 2025 results, which demonstrated resilient financial health. The company reported revenue of £2.304 billion, representing a 4% increase year-over-year, or 5% on an organic basis. Adjusted operating profit rose 6% to £460 million, driving the adjusted operating margin to a robust 20.0%. Adjusted pretax profit reached £442 million. Reflecting this performance, the board approved a 10% increase in the full-year dividend to 34.2 pence per share.
Segment Performance and Strategic Focus
A breakdown of segment performance reveals a tale of two divisions. The Process Automation unit was a standout, delivering a 12% organic revenue increase. This growth was fueled by strong aftermarket orders, which climbed 11%, supported by demand from power, nuclear, and data-center projects. In contrast, the Industrial Automation segment experienced a slight 1% organic decline, attributed to softening global factory activity.
CEO Roy Twite emphasized the company's strategic positioning, stating IMI is "well placed" to capitalize on structural demand in energy, automation, and healthcare markets. He linked the buyback directly to the firm's disciplined capital allocation and strong cash generation. Notably, approximately 45% of IMI's revenue now stems from higher-margin aftermarket services and spare parts, providing a stable earnings base.
Guidance and Market Context
Looking ahead, the Birmingham-based engineer projected a sixth consecutive year of mid-single-digit organic revenue growth for 2026. Adjusted earnings per share are forecasted to be in the range of 136p to 142p. The company also starts the year with a larger Process Automation order book compared to the prior year.
However, the outlook is not without headwinds. IMI cautioned that 2026 margin expansion will be partially offset by increased investments in cyber security. Furthermore, its financial forecasts are contingent upon the successful completion of the £225 million sale of its Truflo Marine business, expected around mid-2026 pending regulatory approvals.
The buyback announcement coincided with a broader market downturn. London's FTSE 100 index closed at a five-week low on Monday. Despite IMI's solid fundamentals and net debt sitting at a conservative 1.0 times EBITDA, its shares fell 3.1% on the day. This move places IMI alongside UK peer Smiths Group, which announced a £1 billion buyback in November 2025.
IMI is scheduled to provide its next trading update on May 12, 2026. The company's commitment to shareholder returns, coupled with its focus on high-margin aftermarket growth and key end markets, outlines a clear strategic path forward despite near-term market volatility and specific operational challenges.