Precision engineer Renishaw (RSW) posted record first-half revenues and profits, reflecting strong demand from the consumer electronics industry for its machine tool products, and a 90 per cent increase in sales from the Far East. Moreover, a raft of new product launches and buoyant demand for 3D additive manufacturing, measuring devices and encoders helped Renishaw's core metrology unit post a 42 per cent in sales to £214m.
In sharp contrast to Renishaw's prolific metrology operations, the group's smaller healthcare division remains sickly. Significant order delays for spectroscopy products were blamed for a £5.7m operating loss and a 26 per cent slump in divisional revenues. Nonetheless, management are confident that growth in neuro and dental product lines can revitalise the sector. Indeed, Renishaw's bosses have increased full-year pre-tax profit guidance by about 8 per cent to between £130m and £150m.
Their bullish growth forecasts are predicated on continuing investment in Renishaw's UK manufacturing facilities, the purchase of additional premises in Ireland, new product launches and the expansion of its sales and marketing activities. However, one concern may be Renishaw's notoriously short order book - typically just one month - which limits visibility on revenues.
Broker Numis expects full-year pre-tax profit of £140m, giving EPS of 164.2p (2014: £70.1m and 82.3p).
| RENISHAW (RSW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,317p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 2,313-2,321p | 12-MONTH HIGH: | 2,420p | 1,470p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 500p | NET CASH: | £38.8m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 164 | 25.6 | 29.5 | 11.3 |
| 2014 | 224 | 56.6 | 64.2 | 12.5 |
| % change | +36 | +121 | +118 | +11 |
Ex-div:05 Mar Payment:07 Apr | ||||
