9th Jun 2015 06:59
LONDON (Alliance News) - Oxford Instruments PLC Tuesday said it expects to return to organic growth in its current financial year, as it posted a swing to a pretax loss in its recently ended year, hit by tightening sanctions on Russia and a weaker performance in Japan.
The technology tools and systems company reported a pretax loss of GBP9.7 million for the year to end-March, swung from a pretax profit of GBP24.0 million a year before, as a rise in revenue to GBP385.5 million from GBP360.1 million was offset by an increase in research and development costs. Oxford Instruments also took exceptional charges including GBP9.9 million related to restructuring and GBP21.7 million for amortisation and impairment of acquired intangibles.
Excluding exceptional costs, pretax profit was GBP35.6 million, down from GBP47.1 million a year before.
Oxford Instruments said its first half suffered from weaker demand in Japan and tough trading conditions for its Plasma Technology business. In its second half, the company was further hampered by weaker trading in its Industrial Analysis business, tightening of trade sanctions for sales to Russia, and slower-than-expected recovery in Japanese markets.
The company had expected to see increased revenue in its second half in Russia as a number of large contracts were due for delivery. However the the tightening of sanctions against the country over its actions in Ukraine resulted in existing export licences being withdrawn and previously booked orders being cancelled. Oxford Instruments said it is assuming there will be no resumption in sales to Russia in its current year, and said it is currently unclear when further export licenses will be approved.
In response, the company has implemented a cost-savings programme and increased its research and development investment in an effort to improve its performance. As part of this programme it cut its headcount by around 7%, and is closing six of its smaller sites.
Oxford Instruments now expects to deliver cost savings of GBP8 million in its current financial year, higher than the GBP6 million it had previously targeted.
Oxford Instruments proposed a final dividend of 9.30 pence, taking its total dividend for the year to 13.0 pence, up from 12.4 pence a year before.
"We expect a return to organic growth in the coming year, with potential for margin improvement in the medium term. This reflects our swift and decisive action to improve our business, and our confidence that nanotechnology continues to drive long term demand for our high technology tools. Our strategy remains to grow our core markets of physical and materials science, and expand into life sciences," said Chief Executive Jonathan Flint in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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