Birmingham-based engineering group IMI, boosted by strong demand in the oil and gas industries and investment in new products, has posted an eight per cent rise in profits - slightly above expectations.
Announcing pre-tax profits of £95.5 million for the first half yesterday, the group said it remained confident of its performance during the second half as it expected the majority of its markets to remain buoyant.
Even the prospect of a lengthy investigation involving possible irregular payments by agents at an American subsidiary in its severe services division failed to dent the group's confidence.
The firm revealed last month that it had called in forensic accountants to probe payments by its third-party agents in Asia and the Middle East, which it said "may be in breach of the law".
IMI, one of the UK's oldest engineering firms, said the investigation - likely to cost £5 million - was not expected to have a "material impact" on trading this year and the group had not made provision for possible fines and liabilities from the probe.
Brushing off the investigation, chief executive Martin Lamb said he was confident that the group would maintain its good performance.
"We have invested heavily in recent years and we are seeing the benefits. Energy markets are especially buoyant and we have seen a 17 per cent increase in overall sales.
"In power production we have seen a 24 per cent growth in sales, driven by strong demand in Asia and the Middle East, and this sector is growing all the time so we intend to capitalise on that," he said.
Revenues in the severe service division, which manufactures valves used in extreme pressure or temperature environments such as in nuclear power stations, rose 34 per cent to £171 million and operating profit rose 60 per cent to £26.1 million.
The division's business selling customised power train and chassis and cab controls to North American truck manufacturers was down broadly in line with that market by nearly 40 per cent. Organic growth in the rest of fluid power was between five and six per cent. The European commercial vehicle business, together with other target sectors, is maintaining strong momentum, the group said.
Indoor climate operating profit rose 15 per cent to £14 million on a ten per cent increase in revenues to £97 million.
The group's beverage dispensing operation saw revenues of £147 million and operating profit fell 14 per cent to £11.4 million. Organic revenue growth was seven per cent, reflecting particularly strong shipments in June. There was a strong performance in continental Europe and Asian markets, but the US market was more mixed with some return to previous buying patterns within the quick service restaurant sector offset by a general slowdown in the convenience sector.
The group said in March that it was cutting about 500 jobs and closing five sites in the UK, US and Germany as part of moves to increase its manufacturing in lower cost countries.
IMI said the margin benefits from the restructuring should now come through later this year, although factors such as volatile metal prices remained a consideration.
The company increased its interim dividend by seven per cent to 7.5p per share, while basic earnings per share lifted by six per cent to 15.4p.