Revenue at Renishaw plc, the South Gloucestershire-based global high-precision metrology and healthcare technology group, dropped to £389.9 million for the first three quarters of the current financial year, compared to £431.1m for the corresponding period last year.
However, while the company is expecting very challenging market conditions, particularly in the automotive and aerospace sectors, in the coming periods, the Group is in a strong financial position and the Board remains confident in the Group’s long-term prospects.
Based on recent order trends and customer feedback, the company now expects full year revenue to be in the range of approximately £490 million to £505 million. Adjusted profit before tax is expected to be in the range of approximately £45 million to £55 million with profits in quarter four expected to benefit from ongoing reduced operating costs and a repeat of the favourable currency impact from forward contracts seen in the third quarter.
Metrology business revenue amounted to £365.9 million compared to £404.5 million last year and its healthcare business revenue was £24 million compared with £26.6 million last year.
Adjusted profit before tax for the first three quarters amounted to £31.8 million compared with £79.6 million last year and the statutory profit before tax amounted to £19.7m (2019: £84.8m).
Renishaw had already cited the challenges it faced in the global economy in January Even before the pandemic, it faced trading challenges including the ongoing uncertainty caused by the trade tensions between the USA and China and weaker demand in the machine tool sector. It also faced tough comparators with the 2019 trading year, which benefitted from a number of large orders from end-user manufacturers of consumer electronic products in the APAC region which have not been repeated this year. However, despite subdued demand conditions overall, the company has seen growth in its optical and laser encoder product lines due to a recovery in the semiconductor market.
During the third quarter Renishaw saw an unsurprising reduced demand in China due to the Chinese Government’s actions to deal with the COVID-19 outbreak, but has since seen a good recovery as factories have reopened. Its EMEA and Americas markets did not experience a significant change in demand as a result of the pandemic during the quarter, but the company expects the effects will begin to be felt in the coming months.
In March, Renishaw decided to cancel the 14.0p interim dividend, which was expected to result in a payment of £5.1m, which reflected a previously announced decision for all Directors to waive their rights to this interim dividend. Renishaw’s Board and the senior management team across the Group have all agreed to have their salaries reduced during the period that employees have reduced working hours. This includes co-founders, Sir David McMurtry and John Deer, who will take no salary or fees during this period.
All Renishaw’s manufacturing facilities around the world remain open, although most are operating at lower capacity due to reductions in staff numbers caused by a combination of school closures, shielding due to health conditions, or local operating restrictions.
In March, Renishaw became a founder member of Ventilator Challenge UK, a consortium of companies that is producing 20,000 ventilators for the UK’s National Health Service.