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Renishaw readying for Brexit and beyond

The engineering group is preparing to reshape its distribution network
February 1, 2019

Renishaw (RSW) has battened down the hatches in preparation for potential political chaos, but it has done more than spend the last six months stockpiling tinned fruit. The engineering group is serious about its growth irrespective of Brexit, and is investing accordingly.

IC TIP: Hold at 4,622pp

Net engineering expenditure was boosted more than a fifth on the prior year to £47.7m. More than a quarter of that spending went towards expanding its manufacturing capacity in the UK and developing its global IT and distribution frameworks. The group stands on the cusp of establishing a new European distribution centre at its existing Irish base in County Dublin, which it says “will significantly reduce the number of direct shipments from the UK to the EU post Brexit”, if required.

In response to the likely disruption companies such as Renishaw will face at customs, management also boosted inventories by almost a quarter – “above standard levels” – and is holding these within the EU. 

Prior to the publication of these results, analysts at Numis were forecasting adjusted pre-tax profits of £163m for the year to June 2019, giving EPS of 190p (from £145m and 171p in 2018). 

RENISHAW (RSW)     
ORD PRICE:4,622pMARKET VALUE:£3.36bn
TOUCH:4,616-4,632p12-MONTH HIGH:5,745pLOW: 3,614p
DIVIDEND YIELD:1.3%PE RATIO:26
NET ASSET VALUE: 768pNET CASH:£101m
Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201728066.277.014.0
201829761.671.514.0
% change+6-7-7-
Ex-div:7 Mar   
Payment:8 Apr