Renishaw shares drop on quarterly revenue decline

17th Oct 2013 13:08

Shares in Renishaw took a hit on Thursday after the group revealed a decline in revenue for the three months ended September 30th. Revenues for the quarter dropped to £79.0m (2012: £95.9m), although excluding major sales in the first quarter last year it experienced underlying growth of 9%.Profit before tax for the first quarter amounted to £10.6m, compared with £27.7m last year, as restated from £28.3m to reflect an amendment regarding pension accounting.Divisionally, the Metrology business reported revenue of £75.2m, compared with £92.2m for the comparable period last year, while Healthcare revenue was similar to last year at £3.8m (2012 £3.7m).Discussing the company's performance on a geographic basis, Renishaw said: "We experienced good growth of 18% in the Americas and growth of 6% in Europe compared with the corresponding period last year. "The Far East, specifically China, continues to be our largest region but revenue suffered a 40% reduction compared with last year, which had benefited from major sales to the consumer electronics industry. The UK, a smaller geographical area in terms of revenue, showed a 9% decrease." The group cost base in the three months increased by 5%, reflecting inflationary increases and expansion of its global marketing and distribution infrastructure. Looking ahead, the group balance sheet remained strong with net cash balances (excluding the escrow account relating to security for the UK defined benefit pension scheme) at September 30th of £30.2m (June 30th 2013 £26.6m).Look ahead, the company continued: "It is very early in our financial year and our order book as usual remains at approximately one month's revenue. Whilst we may continue to experience unpredictable orders both in terms of size and timing we expect continued global investment in production systems and processes to lead to greater demand for the group's products. "We therefore continue to invest in our infrastructure, research and development and remain confident for the medium to longer-term prospects for the group."The share price fell 5.31% to 1,587p by 13:20. NR