A "challenging trading period" for Renishaw has seen first-half profits plummet by more than 83 per cent at the Gloucestershire-based engineering giant.

Revenues for the first half of the financial year, to December 31 2019 were £259.4 million, down from £296.7 million for the same period last year.

Statutory profit before tax was £9.9 million, a reduction of £51.7 million of 83.9 per cent from the same six months last year when profits were £61.6million.

In an interim report for the first six months of the financial year, the group said that profits for the year were in line to be in the range of £50 to £70 million.

Renishaw's full-year profits for the year to June 2019 were £103.9 million.

In a statement to the Stock Exchange, Renishaw said: "It has been a challenging trading period for the Group due to the global macroeconomic environment, including the ongoing uncertainty caused by the trade tensions between the USA and China and weaker demand in the machine tool sector.

"The first half of 2019 also benefited from a number of large orders from end-user manufacturers of consumer electronic products in the APAC region which have not been repeated this year.

"There are however some positive indications of recovery in the semiconductor market which has benefitted our encoder lines."

The statement confirmed that the firm had spent £28.4million in capital expenditure in the period.

Of that £20.8million of which was for an expansion to Its Innovation Centre in Wotton-under-Edge and projects in India, Japan and the USA.

"With the building projects listed nearing completion, capital expenditure in the second half of this year is planned to reduce significantly," the firm said.

The statement added: "The Board believes that the structural demand drivers in our end-markets remain intact.

"The Group is in a strong financial position and we remain confident in the Group's long-term prospects due to the high quality of our people, our innovative product pipeline, extensive global sales and marketing presence and relevance to high-value manufacturing.

"As indicated in our trading statement in October 2019, trading conditions are expected to remain challenging through the remainder of this financial year driven by the global macroeconomic environment.

"At this stage, we expect full year revenue to be in the range of £530m to £560m.

"Adjusted profit before tax is expected to be in the range of £50m to £70m, with profits in the second half of the year expected to benefit from an increase in revenue, reduced operating costs and a favourable currency impact from forward contracts compared to the first half year.

"Statutory profit before tax is expected to be in the range of £38m to £58m."