1st Aug 2019 10:59
(Alliance News) - Renishaw PLC on Thursday reported a drop in annual profit and revenue, below the already lowered targets.
Shares in the FTSE 250-listed engineering firm were down 5.5% in London at 3,642.00 pence each, among the worst performers in the midcap index.
In the year ended June 30, Renishaw - which makes high-precision products for the metrology and healthcare markets - saw pretax profit plunge 29% to GBP109.9 million from GBP155.2 million.
In May, Renishaw guided for a pretax profit in the range of GBP111 million to GBP126 million. This was the second time the engineering firm had lowered its profit guidance after previously expecting pretax profit between GBP123 million and GBP141 million in March.
The company's annual revenue slipped 6.1% to GBP574.0 million from GBP611.5 million.
Back in May, Renishaw had guided for revenue of between GBP580 million to GBP600 million. This was also below prior guidance of between GBP595 million to GBP620 million, itself a cut from an earlier estimate.
Renishaw said its Metreology revenue decreased by 7% to GBP532.9 million, largely as a result of a slowdown in demand for encoder and machine tool products from consumer electronic manufacturers in the Asia Pacific region.
In the Asia Pacific region, total revenue dropped 17% to GBP240.1 million.
The company's Healthcare unit saw revenue jump 15% to GBP41.0 million, with the business seeing strong growth from its spectroscopy and medical dental product lines.
Chief Executive Will Lee said it was a "challenging year" for the company.
"However, outside Asia Pacific, our other regions saw strong growth for some of our product lines, including the additive manufacturing and spectroscopy lines. We remain focused on the long term with a key focus on developing technologies that provide patented products to support the strategies for our metrology and healthcare segments," added Lee.
Renishaw declared a final dividend of 46.0 pence, resulting in an unchanged dividend of 60.0p per share.
The company said it has established a new distribution warehouse in Ireland, should the UK leave the EU with a no deal. Renishaw said the new warehouse can "significantly reduce" the number of direct shipments between the UK and EU.
Renishaw also noted it has increased its inventory at its EU sites.
Lee added: "The group is in a strong financial position, despite a challenging year, and continues to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world. With the ongoing uncertainty surrounding Brexit, weaker economic indicators, exchange rate volatility and trade tensions between the USA and China, we expect market conditions to remain difficult throughout this financial year."
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