If anyone ever tells you that Britain doesn't make anything that the rest of the world wants, quickly point them in the direction of
China is now Renishaw's largest end-market, generating sales of £54.2m last year, a 58 per cent year-on-year improvement. Ironically, that was a slower rate of growth than the 64 per cent achieved in Europe, and in fact global demand has been so strong that the group recently announced plans for the major expansion of its manufacturing capacity, including a large new factory in Wales and extension of its existing sites in Gloucestershire. That follows a more than five-fold increase in capital expenditure in 2011 as well as £7.7m spent on acquisitions, despite which Renishaw still managed to grow its net cash position.
Numis Securities expects current year underlying EPS of 98.9p (from 88p last year).
|ORD PRICE:||1,757p||MARKET VALUE:||£1.28bn|
|TOUCH:||1,755-1,763p||12-MONTH HIGH:||1,886p||LOW: 809p|
|DIVIDEND YIELD:||2.0%||PE RATIO:||19|
|NET ASSET VALUE:||278p*||NET CASH:||£34.6m|
|Year to 30 Jun||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 14 Sep
Payment: 17 Oct
*Includes intangible assets of £47.1m, or 65p a share
While there is always a risk that the cyclical upswing that has helped Renishaw deliver another set of record results could falter, order intake remains strong, and key markets like commercial aerospace are set to provide a steady stream of business for years to come. The only issue is price as the shares are rated on a forward PE ratio of 17.5. Worth buying on the dips, but fairly priced for now.
Last IC view: Fairly priced, 1,482p, 26 January 2011