Renishaw's profits fall on flat revenues and higher costs

3rd May 2013 07:36

Renishaw's pre-tax profits in the third quarter declined following a drop in revenues in the Far East, the UK engineering group's largest geographical market. Pre-tax profit for the quarter ended May 2nd tumbled 23% year-on-year to £16.5m, as the company's costs increased to support marketing, production and research and development.Revenues were broadly flat at £81.9m, compared to £81.6m the previous year as a decrease in sales in the Far East offset growth in Europe, UK and the Americas.The firm's metrology sector experience a 1.0% fall in revenue to £74.7m. The company has made investments in the electronic and semiconductor markets to help improve revenue for its encoder product line during the period. However, the machine tool product line continued to be the biggest driver of growth in the division.New products introduced into the market during the period included the PH10 PLUS probe head and controller, new off-axis rotary software for the XR20-W rotary calibrator and the RVC Siemens software.In the healthcare business sector, revenue rose 24% to £7.2m, boosted by strong demand for spectroscopy products.The company ended the quarter with a net cash balance of £35.1m compared to £22.4m a year earlier."As previously reported the group faces particularly tough comparators going into the fourth quarter which last year saw a number of large orders in China related to the consumer electronics market," said Chief Executive David McMurtry."Based on recent underlying activity levels, we currently expect that revenue in the second half will be at similar levels to revenue in the first half of this fiscal year."He said he also expects this year's adjusted profit before tax to be around the same level as last year.RD