Oxford Instruments' sales and profits hit by superconductor weakness

Underlying basis revenues and profits at Oxford Instruments in the first five months of the year have been "slightly below" the same period last year.

Revenue since the financial year began in April was said to be marginally ahead of last year, the company revealed in a statement on the day of its annual shareholder meeting, thanks to growth in the NanoTechnology business and favourable currency movements.

The favourable currency benefit on profit has been significantly lower than its impact on revenue due to an ongoing currency hedging programme.

"Revenue in our NanoTechnology Tools sector is marginally above last year," said chairman Nigel Keen in his last act for the company before retiring and being replaced Alan Thomson, who is also in the same role at Bodycote and Hays.

Keen said the new nanotechnology solutions launched during the first half of the year have received "considerable interest" which is expected to translate into orders over the coming months.

Revenues at the Industrial Products business has continued to suffer from the weak superconducting wire market reported previously, together with continued market softness in end markets for industrial analysis.

The Service unit was said to be trading ahead of last year, supported by growth in equipment servicing contracts.

"Looking ahead, we expect the second half to benefit from a normal seasonal bias, assisted by favourable currency benefits and the delivery of further business efficiency improvements," Keen said.

"Taking into account our current pipeline and improved order book, the board continues to expect that we will make progress in the year and we remain well positioned to take advantage from future growth in our markets."

Broker Shore Capital said it expects the half and full year will benefit from a mid-single-digit currency tailwind on the top line to aid the company in hitting revenue estimates, but the hedging policy means the impact on the bottom line is smaller.

"We continue to believe action is needed to drive growth and margin improvement from Oxford Instruments' IP base," said analyst Ben McSkelly.