Engineering group IMI posted an excellent set of full-year numbers on Friday, as its strategy of focusing on "sweet spot" products with high margins bears fruit. The majority of the company's business is comprised of fluid control systems – such as valves for liquefied natural gas (LNG) plants and power stations, as well as air conditioning units. Just over half of IMI's operations are now positioned within the "sweet spot", which is characterised by higher growth, higher margins and greater resilience. Over time, management expects to increase this proportion significantly. This focus has resulted in margins hitting a record high of 17.5%, up from 16.7%, which is just shy of the company's target of 18%. In the year to December, revenues rose by 12% to £2.13bn and, when one-off items are stripped out, profits rose 19% to £363m. The total dividend for the year rose by 15% to 30p. Consensus forecasts are likely to edge higher following the numbers. Growth is now expected – albeit at a slower rate than seen last year. The shares were last tipped as a buy in The Sunday Telegraph at 758p on October 9th last year and they are up 31% since then, compared with a FTSE 100 up 12%. Trading on a December 2012 earnings multiple of 12.3, falling to 11.3 next year, the shares are now rated as a hold.

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