Renishaw revenue, profits fall amid challenging market

26th Oct 2023 07:42

(Sharecast News) - Engineering technology group Renishaw reported challenging market conditions in the September quarter in a trading update on Thursday, with total revenue falling 9% year-on-year to £164.5m.

At constant currency rates, the reduction narrowed to 6%.

The FTSE 250 company said all regions experienced decreased demand compared to the first quarter of the 2023 financial year.

Although there was modest growth in the industrial metrology sector, revenue for position measurement products fell significantly compared to the prior year.

However, compared to the fourth quarter of 2023, revenue remained relatively stable at constant currency rates, with no significant changes in market conditions.

Breaking down the revenue further, Renishaw said its manufacturing technologies business generated £156.8m in revenue, a decrease from £172.8m in the same period last year.

On the other hand, the analytical instruments and medical devices business reported revenue of £7.7m, marking an 8% increase compared to the prior year's £7.1m.

Regarding profitability, adjusted profit before tax for the quarter totalled £28m - a decline of 30% compared to £40m in the same period last year.

Statutory profit before tax decreased by 27% to £28m from £38.6m a year earlier.

Despite the challenges, Renishaw said its financial position remained strong, with net cash, cash equivalents and bank deposit balances totalling £206.7m as of 30 September, compared to £206.4m at the end of June.

"Trading conditions remain challenging due to subdued demand, most notably from the semiconductor sector," the board said of Renishaw's outlook.

"We continue to see positive investment trends in robotics, defence, low emission transportation and additive manufacturing."

Renishaw said it was carefully managing costs, implementing targeted price rises and focussing on productivity improvements.

"Our investments in product innovation, infrastructure, and people leave us well-positioned to benefit from a recovery in our markets.

"We are confident in our strategy to deliver sustainable long-term growth."

Renishaw said it would release its results for the half-year ending 31 December on 6 February.

Reporting by Josh White for Sharecast.com.