TIDMRSW
RNS Number : 8498K
Renishaw PLC
10 May 2022
Renishaw plc
Trading update
10 May 2022
Renishaw plc, the global provider of manufacturing technologies,
analytical instruments and medical devices, publishes this trading
update for the nine months ended 31 March 2022. It contains
unaudited information that covers the first nine months of the
financial year and the period since.
Trading activity
9 months 9 months Change
to 31 to 31
March March
2022 2021(2)
Manufacturing technologies GBP467.4m GBP382.1m +22%
Analytical instruments and medical
devices GBP25.0m GBP25.3m -1%
Total Revenue GBP492.4m GBP407.4m +21%
Adjusted(1) Profit before tax GBP124.0m GBP84.4m +47%
Statutory Profit before tax GBP120.2m GBP106.3m +13%
Revenue for the nine months to 31 March 2022 was GBP492.4m, an
increase of 21% compared to GBP407.4m for the corresponding period
last year.
In our Manufacturing technologies business, revenue for the
first nine months was GBP467.4m, compared with GBP382.1m last
year(2) , with growth in all our product lines. Strong demand for
our encoder product lines has largely been driven by increased
investments in industrial automation and the semiconductor and
electronics capital equipment markets. We also experienced good
growth in demand for our machine tool and co-ordinate measuring
machine product lines, where we have benefited from a recovery in
investments in metal cutting machinery and the need to measure the
outputs from those processes. Revenue from our Analytical
instruments and medical devices business for the first nine months
was GBP25.0m, compared with GBP25.3m last year(2) .
Our extensive in-house manufacturing operations, our proactive
inventory management and our continual assessment of alternative
components has allowed us to mitigate continued supply chain
constraints, arising particularly due to the global shortage of
electronic components.
There has been a modest increase in Group headcount in the third
quarter, from 4,975 at 31 December 2021 to 5,004 at 31 March 2022 .
In the first half of the year, as part of our ongoing staff
development and retention programmes, which includes ensuring
competitive remuneration packages, we undertook extensive salary
benchmarking exercises in certain areas of the business, including
the UK. This led to targeted investments which resulted in around
GBP5m of additional annual labour cost and increasing our third
quarter operating costs. We have also experienced increases in
utilities costs, arising from increased energy prices and usage and
have recorded GBP2.0m of asset impairments in the quarter in
relation to our operations in Russia.
Adjusted profit before tax for the nine months to 31 March 2022
amounted to GBP124.0m compared with GBP84.4m last year and the
statutory profit before tax amounted to GBP120.2m (2021:
GBP106.3m).
Financial position
The Group balance sheet remains strong with cash and bank
deposit balances amounting to GBP241.1m (31 December 2021:
GBP222.0m).
An interim dividend of 16.0p net per share was paid on 11 April
2022, totalling GBP11.6m.
COVID-19 update
While we continue to monitor the impact of COVID-19 on our
people and our business, and retain some measures designed to
minimise the risk of in-company transmission, most of our
operations are now operating on a more normalised basis. We are
closely monitoring the current lockdowns in China and are taking
mitigating actions where possible against potential business
disruption. This uncertain position makes trading levels in China
in the remainder of this financial year difficult to predict.
Impact of Ukraine crisis
Following the Russian invasion of Ukraine in February 2022, we
immediately stopped the supply of goods from the Renishaw Group to
Renishaw Russia and we are now in the process of ceasing our
trading operations in Russia. Typically, combined sales to Russia
and Belarus have represented around 1% of total Group revenue. In
the third quarter, GBP2.0m of impairments were recorded for our
assets in Russia and we do not anticipate any further significant
costs or impairments.
Outlook
We continue to see strong demand for our product lines and have
a strong order book. Mindful of global uncertainties, we anticipate
that revenue for the full year will be between GBP655m and GBP675m,
and adjusted profit before tax will be between GBP155m and
GBP170m.
The Board remains confident in our long-term prospects, due to
our strong financial position, the high quality of our people, our
innovative product pipeline, extensive global sales and marketing
presence and relevance to high-value manufacturing.
The preliminary results for the year ending 30 June 2022 will be
released on 15 September.
Will Lee Allen Roberts
Chief Executive Group Finance Director
10 May 2022
Renishaw plc
Registered office New Mills, Wotton-under-Edge, Gloucestershire,
GL12 8JR
Registered number 01106260
Telephone number +44 (0) 1453 524524
Website www.renishaw.com
(1) Adjusted profit before tax
The adjustment to statutory profit relates to:
- the accounting treatment of certain forward currency contracts
used as hedging instruments which do not qualify for hedge
accounting as they do not meet the hedge effectiveness criteria set
out in the International Accounting Standard IFRS 9 'Financial
Instruments'; and
- third-party costs relating to the formal sale process ('FSP') concluded in July 2021.
The Board deems that the adjusted profit before tax better
reflects the underlying performance of the Group. The following
table reconciles statutory profit before tax to adjusted profit
before tax:
9 months 9 months
to 31 March to 31 March
2022 2021
GBP'm GBP'm
Statutory profit before tax 120.2 106.3
Third-party FSP costs (0.2) -
Fair value (gains)/losses on financial instruments
not eligible for hedge accounting
- reported in revenue (0.1) (0.2)
- reported in (gains)/losses from the fair value
of financial instruments 4.1 (21.7)
Adjusted profit before tax 124.0 84.4
(2) Reclassification of segmental results
In previous years, we reported the results of additive
manufacturing machines marketed and sold to medical and dental
customers within Analytical instruments and medical devices,
reflecting how we managed this business. The management of this now
sits within the Additive Manufacturing product line, with a similar
customer base and risk profile to this product line, with results
and operational matters reported to the Executive Committee and
Chief Operating Decision Maker accordingly. We now therefore report
the medical and dental results within Manufacturing technologies
rather than Analytical instruments and medical devices. Comparative
figures have been reclassified accordingly. For the 9 months to 31
March 2021, revenue of GBP3,100,000 has been reclassified from
Analytical instruments and medical devices to Manufacturing
technologies.
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