Renishaw's (RSW) first-half profits crashed 84 per cent as the specialist in metrology equipment (measuring systems) was hit by the US-China trade war and a slowdown in the machine tool sector.
Renishaw's revenues dropped across the group’s three regions, with Asia Pacific (APAC) turnover the biggest faller, at 20 per cent on a constant-currencies basis, to £106.8m. Along with a weak market, Renishaw’s comparative numbers were also weighed down by various one-off orders from APAC consumer electronics manufacturers in the prior period. There was some cause for optimism, however, offered by a recovery in the semiconductor market, which has fuelled growth in the group’s optical and laser encoder product lines.
Management has taken actions to reduce Renishaw’s operating costs in response to its difficult trading environment. “These include the non-replacement of staff who have left the business,” the company says, along with a redundancy programme and the planned closure of its Staffordshire site. The group is consolidating operations in Staffordshire and South Wales, and although it dedicated £28.4m to capital expenditure over the period, it expects this figure to reduce significantly through 2020.
Bloomberg consensus estimates give full-year 2020 adjusted earnings per share of 79.7p, rising to 122p in 2021.
| RENISHAW (RSW) | ||||
| ORD PRICE: | 4,204p | MARKET VALUE: | £3.06bn | |
| TOUCH: | 4,198-4,206p | 12-MONTH HIGH: | 4,724p | LOW: 3,030p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 64 | |
| NET ASSET VALUE: | 811p* | NET CASH: | £71.3m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 296.7 | 61.6 | 71.5 | 14 |
| 2019 | 259.4 | 9.9 | 10.2 | 14 |
| % change | -13 | -84 | -86 | |
| Ex-div: | 05 Mar | |||
| Payment: | 06 Apr | |||
| *Includes intangible assets of £58.6m, or 80p a share | ||||
