IMI, which supplies flow-control systems such as valves for power, nuclear, oil and gas and petrochemical plants, makes more than a third of its revenue from western Europe. In February, it had guided towards modest full-year organic revenue growth.

The adverse impact of exchange rate movements, however, contributed to a 4 percent decline in first-quarter reported revenue, IMI said on Thursday.

The pound gained 6.87 percent against the euro in 2014 and rose a further 7.24 percent in the first three months of this year.

IMI's reported revenue in 2014 was 1.69 million pounds. The company did not give a precise forecast for 2015.

Analysts on average had been expecting revenue of 1.74 million pounds for the year ending Dec. 31. At least five brokerages said on Thursday that they expected the consensus estimate to fall.

Liberum analysts said in a note that the consensus estimate for 3 percent growth in 2015 revenue was now too high, even though management expects an improved performance in the second half of the year.

IMI said that markets were proving more challenging than expected in its critical engineering division and that order intake in the first quarter was slower, with some projects being delayed into the second quarter.

First-quarter revenue fell 5 percent in the critical engineering division, which makes valves and actuators that can withstand extreme temperature and pressure. The unit accounted for 40 percent of IMI's total 2014 revenue.

IMI shares fell more than 4 percent in early trading, but recouped some losses to trade down 2.9 percent at 1204 pence at 0837 GMT. The stock was among the top losers on the FTSE-250 Midcap Index <.FTMC> on Thursday.

(Reporting by Roshni Menon in Bengaluru; Editing by Gopakumar Warrier and Robin Paxton)