Slow going at Oxford Instruments

Achieving the targeted margin of 14 per cent has been straight-forward, although few expected the more cyclical industrial products division to lead the charge. There, customers have been reluctant to invest heavily in equipment and sales are down, yet cost-cutting and benefits from the final and most efficient year of the ITER superconducting wire contract improved returns by 320 basis points (bp) to 13.9 per cent. Adjusted operating profits leapt 26 per cent to £17.4m. That trumped the Nanotechnology unit where first-half losses at Omicron capped margins at 12.5 per cent, up 130bp. Omicron had a better second half, but it looks like sequestration, or at least the threat of it, affected US government-funded research markets, currently worth about $30m (£19.3m) a year to Oxford.

Still, sales in Asia were up 8 per cent and ITER drove a 9 per cent improvement in European revenues, which is why pre-tax profit adjusted for one-offs grew 15 per cent to £48.2m. Broker Numis expects a profit of £52.8m this year, giving adjusted EPS of 74.4p (from 68.3p in 2013).