Join our community of smart investors

Renishaw reports record revenue

The engineering business was given a helping hand by foreign exchange rates, but underlying growth looks good, too
July 28, 2017

Record revenue at engineering group Renishaw (RSW) was the result of strong growth across its metrology business and helpful foreign exchange movements. Exclude the latter, however, and  underlying sales still grew by 14 per cent reflecting a good all-round performance over the last year.

IC TIP: Hold at 4,133p

Looking specifically at metrology, there was strong demand for product lines including encoders, precision measurement and machine calibration systems. Taking into account restatements from last year, revenue at the division grew by 26 per cent while adjusted operating profit rose by nearly 29 per cent to £115m despite higher levels of investment in research and development.

Elsewhere, the healthcare division also performed well, reporting an 18 per cent increase in revenue and growth across all product lines. However, the segment remains unprofitable for Renishaw, although it’s hoped that by restructuring the neurological and medical dental businesses the division will move back into the black.

Broker N+1 Singer says it plans to raise its forecasts, but had previously expected pre-tax profit of £104m for the year to June 2018, giving EPS of 120p, compared with £109m and 132p in FY2017.

RENISHAW (RSW)   
ORD PRICE:4,133pMARKET VALUE:£3.01bn
TOUCH:4,133-4,140p12-MONTH HIGH:4,215pLOW: 2,355p
DIVIDEND YIELD:1.3%PE RATIO:29
NET ASSET VALUE:610pNET CASH:£51.9m
Year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201334782.192.940.0
201435596.411841.2
201549514416846.5
2016 (restated)42761.771.848.0
201753711714152.0
% change+26+90+97+8
Ex-div:21 Sep   
Payment:25 Oct