Renishaw shares slide despite first-half growth

(Sharecast News) - Renishaw shares were sliding on Thursday morning, even after it delivered a modest increase in revenue for the first half of its financial year on Thursday, reporting a 3% rise to £341.4m. The FTSE 250 company said growth in the Americas and EMEA offset weaker demand in the Asia-Pacific region.

Manufacturing technologies revenue increased 4% for the six months ended 31 December, supported by strength in position measurement and additive manufacturing products, while demand for industrial metrology products remained subdued.

Revenue from analytical instruments and medical devices declined by 3%, as growth in neurological products was outweighed by lower spectroscopy sales.

Operating profit rose 9% to £51.6m, though at constant currency, it declined by 5%.

Profit before tax edged up 2% to £57.5m, with a higher gross margin offset by less favourable currency movements, an adverse product mix, and one-off supply chain costs in the second quarter.

Earnings per share increased by 2% to 63.2p.

Cash flow from operating activities more than doubled to £51.5m, reflecting strong cash generation and lower planned capital expenditure.

The firm said it maintained a robust balance sheet, with cash and deposit balances rising to £233.2m.

It left the interim dividend unchanged at 16.8p per share.

Renishaw said it was seeing signs of improving demand, with recent order intake strengthening.

It said it expected steady revenue growth in the second half and has provided full-year guidance, forecasting revenue between £695m and £735m and adjusted profit before tax in the range of £105m to £135m.

"We have continued to make steady progress in mixed trading conditions and our order intake has recently improved, particularly from the semiconductor manufacturing and consumer electronics sectors," said chief executive officer Will Lee.

"Supported by our strategic progress, we expect to achieve steady revenue growth this year.

"Our markets present significant structural growth opportunities, and we are confident that the investment that we are currently making in productivity improvements will drive our operating margins towards our 20% target in the medium term."

At 0921 GMT, shares in Renishaw were down 7.82% at 3,300.01p.

Reporting by Josh White for Sharecast.com.