10th Sep 2013 07:19
LONDON (Alliance News) - Oxford Instruments PLC Tuesday warned that its growth would be more weighted to the second half of the current financial year than in previous years because research and development markets in western economies are being hit by central government austerity cuts.
It said average monthly orders in its nonatechnology tools unit are ahead of last year in Asia, but behind in North America and Europe as government agencies examine R&D spending. It said it was particularly a problem in the US after federal budget cuts caused orders to be delayed.
The producer of technology and tools for the R&D industry said its industrial products business has seen growth in average monthly orders over the previous year in Asia and Europe as global economies begin to recover. North America is still down on the prior year but the trend is improving, it said.
In a trading statement, it said its third party service business is performing well, with the recently acquired Platinum Medical Imaging business continuing to gain traction and delivering the integration benefits.
It noted that it had achieved its overall growth plan a year ahead of target. In 2011, it had set targets of achieving a compound annual revenue growth rate of 14% and a return on sales of 14% by the financial year ending March 2014. But in the year to March 2013, the second year of the plan, the company reported revenue growth of 15.6% over the two years and return on sales in that year of 14.2%.
"The growth in the order intake rate in Industrial Products and third party Service is encouraging but the slowness in R&D markets in the Western economies means that the year is likely to be more second half weighted than has been seen in recent periods," the company said in its statement. "This will be aided by the continuing recovery in trading conditions in North America."
The company's shares were down 2.4% at 1,474 pence early Tuesday, the second-biggest decline on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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