Engineering group IMI has posted a 14 per cent rise in underlying profits to #155.4 million - but warned it was unlikely to see any respite from higher raw material and energy costs and could have to make more use of Far Eastern imports.
The Birmingham-based firm, which makes drinks dispensing equipment and pipes and fittings for the medical and automotive industries, said most of its divisions managed to improve operating profits in the year to December 31.
The results followed the announcement last September, that the European Commission was fining the firm 44.98 million euros in connection with its former copper tube business sold in 2002.
Pending the outcome of the appeal made in January 2005, IMI showed the full amount of the fine as an exceptional item of #33.1 million in its results.
Across the business, current trading presented a mixed picture.
Since the start of the new financial year, the US and Asian economies had remained buoyant although concerns were growing over the outlook in Europe.
It said inflationary pressures around materials and energy costs were "unlikely to subside" - at least in the near term.
As a result of this, IMI would have to continue increasing its own prices and cutting costs through measures such as sourcing more materials from the Far East.
However chief executive Martin Lamb, said this would have little effect on its Midland operation and supply chain.
"We don't think this is going to be significant," he said. "Our jobs in the UK are very solid and we've got some very good skills in engineering. We're focused on growth and development in the Midlands."
The group stressed that while there were still some concerns that mainland Europe remains subdued, the underlying momentum in the businesses was encouraging.
All of its divisions increased operating profits during the year apart from building products.
The group's fluid controls business delivered a particularly strong performance in the commercial vehicles sector, helping operating profits rise to #44.3 million from #31 million.
Its drinks dispensing operation posted a good performance in the US, where there were signs of improving consumer confidence. But strong comparatives during 2002 and 2003 meant there was a "marked decline" in sales volumes in the UK.
The building products arm saw operating profits fall to #28 million from #33 million.
Pretax profits fell to #100.7 million from #117.2 million including the #33 million of exceptional items incurred through the fine.