FTSE 350: Electronics stocks navigating macroeconomic challenges

Still, at the time, Renishaw said that management believed “the structural demand drivers in our end-markets remain intact”. It cited a robust net cash balance of £98.5m – and said it was concentrating on improving productivity while reducing costs. It will, presumably, shed more light on this strategy within its half-year results on 30 January (after this issue goes to press).

The constituents of the FTSE 350 electronics sector – of which Renishaw is one – are varied in their offerings. But, arguably, efforts to navigate their way through macroeconomic and market uncertainty – helped by a focus on efficiency – have surfaced as common themes.

Last November, Spectris (SXS) – a supplier of productivity-enhancing instruments and controls – also cited a slowdown in the macroeconomic environment as a factor behind its flat like-for-like sales for the four months to October 2019, and its year-to-date growth of just 1 per cent.  

That said, Spectris noted that it was working to mitigate the effects of the “headwinds” it faced through its “profit improvement programme”. As well as bettering its sales mix, the group has been rationalising its sites, among other initiatives, to drive up savings. It completed the sale of BTG – part of its industrial solutions business – for €319m (£269m) in December, with a view to simplifying its portfolio while concentrating on high-growth markets. More recently – on 17 January – Spectris announced the planned divestment of its EMS B&K joint venture (an environmental monitoring services business).

Elsewhere, the industrial and automotive markets haven’t proved easy for Morgan Advanced Materials (MGAM). But it has helped to offset declines seen in these areas with growth in the semiconductor and electronics, healthcare and chemical and petrochemical areas. The group is undertaking “efficiency actions” to elevate its margins.