Renishaw profits take a knock
By Simon Hacker | 6th February 2024
Gloucestershire's global tech giant Renishaw PLC has released its half-year results to the end of 2023.
And amid positive indications underpinned by its product diversity, the headlines point to a headwind for the business on profit and revenue.
Profits for the key Gloucestershire employer fell when adjusted before tax to £56.5m, the previous half-year figure for FY2023 being £73.5.
At £330.5m, revenue was 5% lower; within that, Renishaw said that its manufacturing technologies revenue had fallen by 6%, with "solid growth in Industrial Metrology offset by continued weak demand for position encoders for semiconductor manufacturing equipment".
William Lee, chief executive, said: "We have achieved a solid performance in challenging market conditions, with growth from Industrial Metrology products in APAC being offset by continued weak demand from some key sectors, most notably semiconductor equipment."
He added: "We expect an improvement in our trading performance in the second half of the financial year as market conditions improve, and as we continue to pursue a range of growth opportunities. To support our through-cycle growth strategy, we are continuing to focus on productivity and to make targeted investments in our people, our production facilities, and our new product pipeline."
Key result aspects include:
● A revenue rise of 16% on analytical instruments and medical devices, with strong growth in Spectroscopy products.
● Group revenue fell by 2% at constant currency (APAC +6%, EMEA -6% and Americas -13%).
● 3% reduction in gross margin before engineering costs: targeted price rises, offset by adverse currency impact on revenue, employee pay inflation, and lower production overhead absorption due to planned inventory reductions.
● Cost control in engineering, distribution and administration limiting year-on-year increases to 3%.
● Statutory profit before tax of £56.5m (H1 FY2023: £77.8m).
● Strong balance sheet with cash and cash equivalents and bank deposit balances of £178.3m, compared with £206.4m at 30 June 2023, with the £43.2m final dividend for FY2023 paid in H1.
● Targeted reductions in inventory contribute to cash flow from operating activities increasing to £55.6m (H1 FY2023: £21.6m).
● Interim dividend of 16.8p per share.
The report added: "At this stage we expect full year revenue to be in the range of £675m to £715m. Adjusted profit before tax is expected to be in the range of £122m to £147m.
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