Renishaw upgrades full-year forecasts after strong nine months

Renishaw upgraded its forecasts for annual results after the engineering group reported a 39% increase in profit for the first nine months of 2018.

Adjusted pre-tax profit for the nine months to the end of March jumped to £97.6m from £70.1m a year earlier as revenue rose 12% to £429.9m.

Statutory pre-tax profit rose 50% to £104.4m. Stripping out currency swings, revenue rose 17%. The trading statement sent Renishaw's shares up 10% to 5,228p at 10:10 BST.

Revenue growth was driven by Renishaw’s metrology business, which makes precision measuring devices for industrial use. The division’s revenue rose 12.5%, or 17% at constant exchange rates, to £406.6m.

In its update the company strengthened its forecast for annual revenue to £585m-£610m from £575-£605m. Adjusted pre-tax profit is now expected to be £135m-£150m, up from an earlier prediction of £127m-£147m. Renishaw reports full-year results on 30 June.

“Notwithstanding current economic uncertainties, the board remains confident in the future prospects of the group,” Renishaw said.

Renishaw's strong performance carried on a trend established in the first half. Goldman Sachs predicted in April that the company would join the FTSE 100, driven partly by demand in China which is trying to shift to high value-add manufacturing.