Oxford Instruments (OXIG) is still fighting some of the challenging market conditions that wiped a third of the value off its shares during the past 12 months. While weakened demand for its industrial products persisted during the period, a stronger performance from nanotechnology tools helped push the adjusted operating profit margin up 100 basis points to 12.3 per cent. This was aided by £9.4m-worth of operational savings, leaving adjusted profit higher despite a weaker overall top line.
Sales for the industrial products business fell 7 per cent to £97m last year, while adjusted operating profit declined almost a third to £4.5m. Pricing pressure from scanner manufacturers and reduced demand for wire led to a reduction in margins and orders for the superconducting wire business. Meanwhile, continued weakness in the construction and metals markets hurt the division's industrial analysis and X-ray technology businesses.
Nanotechnology tools remains management's great hope for organic growth in the short term. The transformation of US Omicron into a joint venture helped improve adjusted operating margins for the division by 1.6 percentage points to 11.4 per cent.
Analysts at N+1 Singer expect adjusted pre-tax profit of £38.9m for the year to March 2017: that gives EPS of 50.5p, compared with 48.6p in FY2016.
OXFORD INSTRUMENTS (OXIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 683p | MARKET VALUE: | £391m | |
| TOUCH: | 680-683p | 12-MONTH HIGH: | 1,078p | LOW: 503p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 250p* | NET DEBT: | 90% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 337 | 36.1 | 46.0 | 10.0 |
| 2013 | 351 | 28.4 | 37.4 | 11.2 |
| 2014 | 360 | 24.0 | 32.1 | 12.4 |
| 2015 (restated) | 380 | -9.6 | -10.9 | 13.0 |
| 2016 | 362 | 13.1 | 16.1 | 13.0 |
| % change | -5 | - | - | - |
Ex-div: 22 Sep Payment: 20 Oct *Includes intangible assets of £221m, or 385p a share | ||||
