Strong performance from Invensys Rail helps drive Group results
27 May 2009
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? Orders rise by 109% at constant exchange rates (CER) as rail industry continues to demonstrate strong fundamentals
? Operating profit soars 32% at CER to ?134 million
? Operating margin improves to 21.1%
An impressive performance from railway control and communication solutions provider Invensys Rail helped Invensys plc report a robust performance in the financial year ended 31 March 2009 despite the economic downturn. Overall Invensys plc made operating profits of ?244 million on revenue of ?2,284 million, with underlying earnings per share1 of 14.1p.
Invensys Rail ? which also owns the Westinghouse Rail Systems and Dimetronic brands ? saw operating profit soar by 32% to ?134 million, while orders rose from ?429 million in 2007/08 to ?968 million ? a 109% rise at CER.
During the year Invensys Rail won major contracts both within and outside of its core markets. In the UK, it won an important contract from Network Rail to undertake signalling enabling works at Reading Station, which represents the first state of the ?425 million Reading Redevelopment Project. It has also recently won a contract from Crossrail Ltd to evaluate signalling and control solutions for the Crossrail project.
Outside the UK, Invensys Rail?s Spanish operation Dimetronic continued to build on its success, winning ?155 million of contracts for the signalling of the Madrid-Valencia high-speed line, and receiving a letter of award for a ?44 million contract on the Barcelona-Figueras high-speed line.
Singapore?s Land Transit Authority awarded Invensys Rail a ?123 million contract for the country?s new Downtown Line, while, in New Zealand, Westinghouse Rail Systems Australia is to install European Rail Traffic Management System (ERTMS) signalling in Auckland ? the first project of its type in Australasia. Another major ERTMS contract is for the installation of the pan-European signalling system on the Ankara?Konya high-speed line in Turkey. In North America, Invensys Rail?s recently-acquired operation, Quantum Engineering, is set to benefit from investment in Positive Train Control signalling systems.
Despite the recession, Invensys Rail believes the global rail market remains strong, helped by growing recognition of rail?s environmental and economic benefits over other modes of transport for both passengers and freight, and also by government stimulus packages investing in rail.
Invensys Rail Chief Executive, James Drummond, said: ?We are extremely pleased with Invensys Rail?s performance in all of our markets. The fundamentals of the rail market are strong, and we believe our range of advanced and scalable signalling and communication solutions positions us well to benefit from initiatives to enhance capacity and safety on mainline and mass transit networks all around the world.?
Table: Invensys Rail financial performance
Year ended 31 March 2009 2008 % change at CER2 % total change
Orders (?m) 968 429 109% 126%
Revenue (?m) 636 539 9% 18%
Operating profit3 (?m) 134 93 32% 44%
Operating margin3 (%) 21.1% 17.3%
Operating cash flow (?m) 128 93 26% 38%
Operating cash conversion (%) 96% 100%
1 Calculated by reference to earnings before exceptional finance costs and income, and foreign exchange losses on financial items. Prior year earnings per share also exclude the PPP settlement credit.
2 % change is measured as the change at CER as a percentage of the 2008 adjusted base and is calculated based on underlying amounts in ??000s.
3 All references to operating profit and operating margin are arrived at before exceptional items, unless otherwise stated