S&P ups Invensys outlook to stable

Standard & Poor's said it revised its outlook on Invensys plc to stable from negative, reflecting an improvement in the group's near-term prospects, although significant credit risks remain.

S&P also affirmed the group's ratings, including the long-term B+ corporate credit rating.

After a number of years, Invensys is now nearing completion of a long disposal program, the agency said. Legacy-related issues and restructuring costs are beginning to wind down, cash burn has been reversed and Invensys is now generating positive free cash flow (excluding legacy-related issues).

S&P said the ratings on Invensys are constrained by the inherent competitive disadvantage the group suffers, both from a cost and managerial perspective, due to its acute debt burden. Net interest on financial debt alone accounts for 4.5% of sales.

Tempering these risks to some extent is Invensys' good market positions, particularly in its controls, process systems and rail businesses, the agency said.

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