Renishaw announces results in a tough market

W Renishaw HQ

Renishaw has announced its preliminary results for the year ended 30 June 2019. Revenue is down £574 million, a decrease of seven per cent and profits before tax of £103.9, a decrease of 28 per cent.

While weaker smartphone demand has hit the company in Asia Pacific, the company is looking longer term through investment in research and development and has increased its workforce by four per cent over the last year to 5,041. It took on 119 apprentices and graduates.

Will Lee, Renishaw’s Chief Executive who took over from founder Sir David McMurtry last year, said: “This was a challenging year with reduced turnover and adjusted operating profit for the Group. However, outside APAC (Asia Pacific), our other regions saw strong growth for some of our product lines, including the additive manufacturing (AM) and spectroscopy lines. We remain focused on the long term with a key focus on developing technologies that provide patented products to support the strategies for our metrology and healthcare segments.”

With the ongoing uncertainty surrounding Brexit, weaker economic indicators, exchange rate volatility and trade tensions between the USA and China, it expects market conditions to remain difficult throughout this financial year.

Renishaw achieved revenue for the year ended 30 June 2019 of £574 million, compared with £611.5 million last year, against a backdrop of challenging economic conditions including the impact of trade tensions between the USA and China, and ongoing uncertainty surrounding the potential impacts of Brexit, said Will.

“Aside from APAC, we experienced revenue growth in all regions,” he added. “The lower revenue in the APAC region is largely a result of a slowdown in demand for our encoder products, which are used in electronics and display manufacturing equipment, and for our machine tool products from large end-user manufacturers of consumer electronic products, due to weaker smartphone demand and the resultant over-capacity in the supply chain.

“We have not experienced an erosion in our customer base in the region and we continue to work closely with key customers to ensure we are in position to meet their requirements when economic conditions improve.”

Executive Chairman, Sir David McMurtry, said: “Following the appointment of Will Lee as Chief Executive last year, I have been delighted to see his progress and strong leadership during the year. He is driving change in key areas of the business, including a focus on the skills development of our people, to continue to improve productivity.

“In my role as Executive Chairman, I have enjoyed the opportunity to focus on Group innovation and product strategy, supporting our talented engineering teams. This has included our industrial metrology and additive manufacturing technologies, where there are exciting opportunities for future growth.

“During the year, we continued to invest in developing future technologies, with total engineering costs of £97.9m (before net capitalised development costs and the R&D (research and development) tax credit), amounting to 17% of total revenue.”

The Group confirmed it is in a strong financial position, despite a challenging year, and continues to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world.