Renishaw revenue rises but full-year profit slips

Engineering company Renishaw said in its final results on Tuesday that despite facing challenging trading conditions, revenue rose to £688.6m from £671.1m year-on-year.

The FTSE 250 firm said the figures, however, represented a 1% decline when adjusted for constant exchange rates.

Breaking down its revenue sources, Renishaw highlighted a surge in system sales, which counteracted declining demand from the semiconductor sector.

Revenue from manufacturing technologies increased by 2% to stand at £648.2m, which was put down to robust sales in multi-laser additive manufacturing (AM) systems, five-axis coordinate measuring machine (CMM) inspection systems, laser encoders, and machine calibration systems.

However, there was a dip in demand for optical encoders, especially in the Asia-Pacific region, due to reduced semiconductor sector investments.

Moreover, the firm’s analytical instruments and medical devices segment experienced a 10% revenue boost, amounting to £40.3m.

The Spectroscopy product line enjoyed record sales with impressive growth across all regions, while the Neurological product line saw a revival in robot sales.

On the financial front, Renishaw's adjusted profit before tax slipped to £141m from £163.7m a year earlier, resulting in a return on sales of 20%, compared to 24% in the prior year.

The company cited a 1% reduction in gross margin before engineering costs due to factors like employee pay inflation, reduced production volumes, and other inflationary pressures, which were only partly offset by currency and price hikes.

Its statutory profit before tax saw a marginal dip to £145.1m from £145.6m, while it maintained a healthy balance sheet, boasting net cash and bank deposit balances of £206.4m, albeit down from £253.2m at the end of June 2022.

One significant expenditure was the £73.8m invested in capital projects, including the ongoing development of its production facility in Miskin, Wales.

The board confirmed that shareholders could anticipate a final dividend of 59.4p per share.

“In challenging trading conditions, our performance demonstrates the resilience of our business model and the hard work and dedication of our teams around the world,” said chief executive officer William Lee.

“In a year when we saw a downturn in demand from one of our key sectors, we achieved good growth in systems sales, which is an area of strategic priority.

“We have seen a steady start to the 2024 financial year, and our order book remains solid.”

Lee said the company was seeing positive trends for investment in low-emission transportation, defence, additive manufacturing and robotics.

“Meanwhile, demand from semiconductor equipment suppliers for position encoders remains subdued.

“While the short-term macroeconomic picture remains unclear, we continue to manage costs prudently, we are implementing further price rises, and remain focused on improving our productivity.

“I'm confident in our strategy and the actions we're taking to deliver sustainable long-term growth, including investments in people, infrastructure and product innovation.”

At 1128 BST, shares in Renishaw were down 0.27% at 3,674p.