Shares in Renishaw (RSW) soared as much as 23 per cent after the precision engineering group revealed pre-tax profits for the year to 30 June were 14 per cent ahead of consensus expectations. That was thanks to a buoyant final quarter, when revenues grew at an impressive 18 per cent to a record £107m. Demand in 3D additive manufacturing, encoders and measurement automation has been particularly strong.
This marked a reversal of the previous pattern. Last year, Renishaw badly missed full-year forecasts after fourth-quarter revenues and profits unexpectedly slumped. It's part and parcel of investing in the ever unpredictable engineer: Renishaw has a notoriously short order book - typically just one month - which limits visibility and means surprises are, well, unsurprising.
Reported pre-tax profits climbed for the first time in years, too, but this was due to an exceptional profit on disposal of the group's minority shareholding in Delcam, which was acquired by Autodesk. As previously flagged, underlying operating profits fell 11 per cent year on year because of rising costs and currency headwinds.
Management suggests demand is now strengthening in most of its end markets, and that the improved trading in the fourth quarter has continued into the new financial year. Broker Numis Securities consequently upgraded its EPS forecast by 8 per cent to 90.3p, from 78.3p last financial year.
RENISHAW (RSW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,735p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 1,734-1,740p | 12-MONTH HIGH: | 2,240p | LOW: 1,444p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 485p | NET CASH: | £43.6m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 182 | 27.1 | 29.3 | 17.6 |
| 2011 | 289 | 82.1 | 90.8 | 35.0 |
| 2012 | 332 | 86.0 | 95.6 | 38.5 |
| 2013 (restated) | 347 | 82.1 | 92.9 | 40.0 |
| 2014 | 355 | 96.4 | 118 | 41.2 |
| % change | +2 | +17 | +27 | +3 |
Ex-div: 17 Sep Payment: 20 Oct | ||||
