Q1 2012/13 performance and outlook
Overall the Group made a satisfactory start to the financial year and, subject to significant changes to the global macro-economic environment, we continue to look forward to a year of improving performance.
Invensys Operations Management
The division's good revenue performance last year has continued into the current year in each of its lines of business supported by the conversion of its large order book in systems as well as strong software and equipment sales. Work on the nuclear projects in China continues in accordance with the revised project plan put in place in January 2012.
Invensys Rail
As expected, Invensys Rail has experienced a slow start to the year in terms of revenue following the delays in the awards of the large contracts last year which has deferred mobilisation on these contracts further into the current year. Its performance has also been affected by delays in the letting of contracts under the four new Network Rail framework agreements. We expect this situation to improve substantially in the second half resulting in a performance for the year as a whole in line with our expectations.
Invensys Controls
Invensys Controls has made a more confident start to this year with the global appliance market showing much greater stability in demand compared to last year. The commercial line of business experienced some temporary order delays which are expected to reverse in the second half while wholesale continued to be affected by the weak economic conditions in its core North American and European markets.
Financial position
At 30 June 2012, the Group had net cash of £153 million. The £109 million outflow in the period was due mainly to the normal seasonal working capital outflow and a number of non-operating items including £25 million of deficit reduction payments into the UK and US pension schemes and the payment of £12 million for the acquisition of PHW Inc.
