Asia Pacific weakness sees Renishaw profits slide

Renishaw reported a 7% fall in revenue at constant exchange rates in its preliminary results on Thursday, to £574.0m.

The FTSE 250 engineering company said it saw revenue growth in the Americas and Europe, Middle East and Africa (EMEA) regions in the year ended 30 June, which was more than offset by weakness in the Asia Pacific region, which saw a 19% fall at constant exchange rates.

Metrology revenue fell 7% to £532.9m, which the board said was largely the result of a slowdown in demand for encoder and machine tool products in the Asia Pacific region.

At the same time, it said metrology revenue benefited from “strong growth” in the company’s additive manufacturing line and good growth in its measurement and automation line and fixturing line.

Healthcare revenue rose 15%, with “strong” growth seen in its spectroscopy and medical dental product lines giving rise to adjusted operating profits of £3.1m, rising from £0.3m year-on-year.

The company said its adjusted profit before tax for the year fell 28% to £103.9m, while its statutory profit decreased by 29% to £109.9m.

Renishaw said it had a “strong” balance sheet, with cash standing at £106.8m at year-end, compared with £103.8m a year earlier.

The board recommended a final dividend of 46p per share, making for a total dividend for the year of 60p, in line with the total distributions paid in the 2018 financial year.

“The group is in a strong financial position, despite a challenging year, and continues to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world,” said chief executive Will Lee.

“With the ongoing uncertainty surrounding Brexit, weaker economic indicators, exchange rate volatility and trade tensions between the US and China, we expect market conditions to remain difficult throughout this financial year.

“Your directors remain confident in the long-term prospects for the group due to the high quality of our people, our innovative product pipeline, extensive global sales and marketing presence and relevance to high-value manufacturing,” Lee added in his statement to shareholders.