On almost unchanged sales (after allowing for a £8.1m currency gain) Renishaw has produced wonders in terms of a profits rebound. Before taking in exceptional costs of £1.6m (£4.1m last year), operating profits jumped from £6m to £28.1m thanks to cost-cutting. Sales would have been lower had it not been for a sharp rise in demand from the far east. Revenues there rose from £52m (or £65.9m on a constant currency basis) to £71.1m, while sales to China advanced from £19.5m to £34.1m and were just £1m behind the US's contribution.
And the good news is continuing as Renishaw introduces a raft of new measuring products and beefs up its new healthcare division. The company turned in record fourth-quarter sales and a good indicator of this is the sharp rise in end-June trade receivables from £24.1m a year earlier to £45.9m, while trade payables was only up from £6.6m to £10.4m. Renishaw's order book has also more than doubled over the 12-month period to £23.3m at the end of June. China is still the fastest-growing market but there are signs of demand recovering in both the US and Germany.
Broker UBS expects underlying pre-tax profits to rise from £28.7m to £50.1m on sales of £230m, giving adjusted EPS of 55p (31.6p in 2010).
RENISHAW (RSW) | ||||
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ORD PRICE: | 820p | MARKET VALUE: | £597m | |
TOUCH: | 817-823p | 12-MONTH HIGH: | 860p | LOW: 380p |
DIVIDEND YIELD: | 2.1% | PE RATIO: | 28 | |
NET ASSET VALUE: | 218p* | NET CASH: | £31.1m |
Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2006 | 176 | 38.1 | 41.9 | 21.8 |
2007 | 181 | 52.1 | 55.2 | 22.9 |
2008 | 201 | 43.1 | 47.6 | 25.4 |
2009 | 171 | 4.7 | 4.9 | 7.8 |
2010 | 182 | 27.1 | 29.3 | 17.6 |
% change | +6 | +474 | +498 | +127 |
Ex-div: 15 Sep Payment: 18 Oct *Includes intangible assets of £28.6m, or 39p a share. |