Renishaw posts record first half year revenues of £147.1m

Posted on 25 Jan 2012

The Gloucestershire-based manufacturer of metrology equipment and gauges has made important investments in order to advance its manufacturing capabilities.

Sir David McMurtry CBE, CEO of Renishaw
Sir David McMurtry CBE, chairman of Renishaw

The strongest growth over the period from this time in 2010 was seen in Europe and the US, at 25% and 23% respectively. While Renishaw’s growth in the US is impressive, growth in the Far East (including China) fell by 17%, while it grew by 12% in Japan within the same period. Even the company’s shares have taken a hit: they have fallen in value by 12.8% in the past 12 months. The metrology side of the business has experienced a 10% rise in revenues.

As well as investing heavily in R&D, Renishaw has developed its marketing and distribution infrastructure and held a strong balance sheet, with net cash balances of £26.6m.

Some have cast doubt on the strong revenues, however. Many point to the Group’s weak pre-tax profits – which were £31m – 11% below the £35.2m reported last year. The Group put this decrease down to “increased investment in staff and infrastructure.”

Costs are clearly a major issue for Renishaw – the report released yesterday said: “The Board continues to closely monitor the Group’s costs and future recruitment strategy in order to improve profit margins.”

Partly due to having a much stronger presence in the metrology equipment sector, Renishaw halted a section of its healthcare diagnostics programme and reallocated staff back to projects in its metrology business. The company stopped supplying radio frequency coils for use in MRI scanning research, as it was “no longer considered core” to its business strategy, according to Sir David R McMurtry. Operating loss in the Group’s healthcare business was posted at £6.0m, after restructuring costs of £0.6m, compared with a loss of £4.2m last year.

Renishaw has established a new subsidiary company in Mexico to market and support the Group’s products in the Central American region. It has also acquired premises for the Group’s Canadian and Italian subsidiaries. Sir David R McMurtry said in the report: “We have expanded our working premises in Germany, Brazil and China, and have refurbished and re-occupied a 16,000 square feet building in Schaumburg, USA.”

A Revor surface finish probe
A Revor surface finish probe

Renishaw expects recovery in the electronics sector, while investment in production systems on a global scale in automotive, civil aviation, energy and agriculture looks “increasingly favourable” according to the report.