Precision engineer Renishaw made record profits in the fourth quarter, repairing the damage done by a slump in Far East sales during the first half. China made that happen and management expects lots of activity in the next couple of quarters, too. The shares surged 15 per cent on these numbers, but a notoriously short order book stops us getting over-excited.
A 32 per cent jump in revenue to £103m during the final three months generated pre-tax profit of £33.5m, up over two-thirds on the previous year. Sales to China more than doubled in the second half, compared with the first, to £44m – driven by the ongoing trend for more sophisticated manufacturing methods that require Renishaw’s high-tech measuring devices. The US grew revenue 22 per cent over the year, and even continental Europe posted a 12 per cent gain. That said, Germany stalled during the second half, so keep a close eye on progress there. Crucially, Spain and Italy are comparatively small fry for Renishaw, and new products like the Equator gauge should offset any weakness elsewhere. Indeed, management sound confident of winning more big orders from aircraft manufacturers. It hopes the much smaller healthcare division will make a profit in a couple of years, too.
Numis Securities expects pre-tax profit of £89.9m in 2013, giving EPS of 98.8p.
RENISHAW (RSW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,455p | MARKET VALUE: | £1.06bn | |
| TOUCH: | 1,448-1,457p | 12-MONTH HIGH: | 1,886p | LOW: 800p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 15 | |
| NET ASSET VALUE | 334p* | NET CASH: | £21.1m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 201 | 43.1 | 47.6 | 25.4 |
| 2009 | 171 | 4.7 | 4.9 | 7.8 |
| 2010 | 182 | 27.1 | 29.3 | 17.6 |
| 2011 | 289 | 82.1 | 90.8 | 35.0 |
| 2012 | 332 | 86.0 | 95.6 | 38.5 |
| % change | +15 | +5 | +5 | +10 |
Ex-div: 19 Sep Payment: 22 Oct *Includes intangible assets of £54.4m, or 75p per share | ||||
