The recession has hit specialist instrument maker Renishaw hard, and led to a series of profit warnings as the economic slowdown developed during 2009. However, these half-year figures do show some sign of stabilisation, with better order intake and growth returning to Asian markets.
Certainly, sales and earnings continued to slump in the period. But growth in the Far East, excluding Japan, has returned and Renishaw's management points out that order intake has exceeded revenues in each of the past six months. That has helped boost the order book by £9.7m in the half to £17.6m. Indeed, Sir David McMurtry, Renishaw's chairman and chief executive, said that the order intake improvement had left him "cautiously optimistic" about full-year prospects.
Half-year sales at the metrology (measuring instruments) division, which generates the bulk of sales, did fall to £65.9m from £94.2m a year earlier. But the healthcare side held up slightly better with sales of £8m - down only marginally on the £8.5m achieved a year earlier and including £2.5m of non-recurring revenues. Meanwhile, the company's net cash pile grew by £3.9m in the half, helped by a combination of cost-cutting and an inventory run-down.
Broker WH Ireland expects full-year pre-tax profits of £17m, giving EPS of 18.7p (£8.8m and 9.3p in 2009.)
RENISHAW (RSW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 620p | MARKET VALUE: | £451m | |
| TOUCH: | 613-620p | 12-MONTH HIGH: | 627p | LOW: 238p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | na | |
| NET ASSET VALUE: | 195p* | NET CASH: | £24.4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 103 | 14.0 | 15.4 | 7.76 |
| 2009 | 73.8 | 7.10 | 7.76 | 4.00 |
| % change | -28 | -49 | -50 | -48 |
Ex-div: 24 Feb Payment: 31 Mar *Includes intangible assets of £28.6m, or 39p a share. | ||||
