Renishaw (RSW) slashed full-year expectations after warning that weaker demand in Asia for its encoder products and from large end-user manufacturers of consumer electronic products had persisted from the first half.
At the half-year stage in January, the precision engineering group guided towards revenues of £635m-£665m. Now, it expects sales to come in at £595m-£620m. Adjusted pre-tax profit predictions have also fallen to a range of £117m-£135m, from £140m-£160m. Statutory pre-tax profits should also land between £123m and £141m – down from £146m-£166m.
During the first six months of its financial year, Renishaw’s revenues in the Far East grew by just 1 per cent, and fell by 1 per cent on a constant-currency basis. Now, "based on recent order trends and customer feedback", Renishaw expects sluggish growth trends to continue for the rest of the year.
As such, Panmure Gordon has cut its revenue growth forecasts for the Far East and China for Renishaw’s traditional metrology division, expecting these to contract by 12 per cent and 16 per cent, respectively, down from expected revenue growth of 3 per cent in the Far East and a 1 per cent contraction in China. That said, the broker did admit its "longer-term investment case of Renishaw leading the metal Additive Manufacturing market remains unchanged”. It forecasts group full-year 2019 profits before tax and amortisation of £149m, and earnings per share of 173p, against £145m and 168p in 2018.
