4th Feb 2021 09:31
(Alliance News) - Renishaw PLC on Thursday posted a stratospheric rise in its profits for the first half of its current financial year despite seeing a reduction in revenue for the period.
Shares in the FTSE 250-listed metrology and healthcare technology group were trading 1.1% lower at 6,050.00 pence each on Thursday morning in London.
For the six months ended December 31, Renishaw posted pretax profit of GBP63.9 million, up more than six-fold from GBP9.9 million recorded the year prior.
This was despite revenue dipping 1.7% lower to GBP255.1 million from GBP259.4 million. Revenue growth in the Asia Pacific region - up 18% to GBP125.9 million - was driven by strong demand for its encoder product lines. However, this was offset by weaker demand in its EMEA and Americas regions - down 16% to GBP74.5 million and down 14% to GBP54.7 million respectively - amid uncertainty caused by the pandemic and consequent challenges to key sectors, particularly the aerospace sector.
By division, the metrology business contributed revenue of GBP235.6 million, down from GBP241.45 million the prior year and the healthcare business contributed revenue of GBP19.5 million, up from GBP17.8 million.
The significant increase in profit was credited to Renishaw's 'Fit for the Future' strategy which resulted in improved productivity and a reduction of its cost base. Measures taken included a resizing of the business, a restructure of its AM product line, and a focus on prioritising design projects to accelerate the market launch of significant products. Employee headcount at the end of December was 4,324, down from 4,463 at the end of June.
Administrative expenses were cut by 7.8% to GBP29.4 million from GBP31.9 million and distribution costs were down 17% to GBP54.3 million from GBP65.6 million. The company also recognised a gain from the fair value of financial instruments of GBP20.5 million, compared to a loss of GBP8.6 million the year prior.
Dividends were reinstated, with the company declaring an interim dividend of 14.0 pence per share, compared with zero last year.
Looking ahead, Renishaw said: "Whilst the trading environment remains uncertain as a result of the pandemic, we currently have a strong order book, and we are well placed to take advantage of the opportunities presented by any recovery in the global economy."
The company said it expects full-year revenue to be in the range of GBP515 million to GBP545 million. Adjusted profit before tax is expected to be in the range of GBP85 million to GBP105 million.
Revenue for financial 2020 was GBP510.2 million and adjusted pretax profit was GBP48.6 million.
By Ife Taiwo; [email protected]
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