Renishaw's revenue climbs, though profits dip on cost increases

31st Jan 2019 08:19

(Sharecast News) - Engineer Renishaw reported interim revenue growth across all regions except for the Far East, where trading was impacted by a slowdown in demand for encoder products.Profits before tax for the FTSE 250-listed group, however, decreased by 7% to £61.6m as costs mounted after taking "a strategic decision" to increase certain inventory lines in preparation for potential supply chain delays that could arise as a result of Brexit.For the six-month period ended 31 December total revenue reached £296.7m, up by 6% compared to the same period the year before.The increased costs included, a 20% jump in administrative expenses to £29.0m, cost of sales swelling 10% to £148.5m and distribution costs up 8% to £63.8m.Revenue growth was driven by a 20% surge in revenue at constant exchange rates from trading in the UK and Ireland, which came in at £17.7m, as well as smaller increases of 9% and 7% in the Americas and Europe, which reached £65.4m and £76.8m respectively, and a 17% increase to £10.4m in other regions.A 1% dip in revenue from the Far East was dismissed by Renishaw as "largely as a result of a slow down in demand for our encoder products and from large end-user manufacturers of consumer electronic products".At 31 December there was cash and equivalents of £100.5m on the balance sheet, up from £69.1m at the same point the year before."Notwithstanding current economic uncertainties, the board remains confident in the future prospects of the group," a statement read, guiding to full year revenue in the range of £635-665m, adjusted profit before tax of £140-160m and statutory profit before tax of £146-166m.These figures compare to revenue of £611.5m and profit before tax of £155.2m which were achieved across the previous year.Renishaw's shares were up 3.44% at 4,514.00p at 0921 GMT.