Gloucestershire global manufacturer Renishaw has reported an 11 per cent drop in revenues.
Sir David McMurtry, founder and Executive Chairman at the South Gloucestershire headquartered high-precision metrology and healthcare technology group,described it as a “particularly challenging year”.
Revenues were £510.2 million, down from £574 in 2019. Revenue were lower in all regions, not only because of Covid-19, but also due to challenging global macroeconomic conditions throughout the year, said the company.
Adjusted profit before tax is £48.6 million, down 53 per cent from 2019. Statutory profit was £3.2 million, compared with £109.9m last year.
Sir David McMurtry, Executive Chairman, said: “It has been a particularly challenging year for the Group and we are extremely proud of the commitment our employees have shown during these exceptional times. Looking ahead, there are many exciting opportunities to grow our business, due to our new product pipeline, excellent manufacturing and commercial operations, and highly skilled people.”
Renishaw had already begun to make changes, as it faced up to tough global trading conditions, 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.
Sir David McMurtry said: “We have taken some difficult decisions to preserve cash and protect the longer-term health of the business. These measures included cancelling the interim dividend, as well as deciding not to pay a final dividend. We also undertook a resizing programme, which has regrettably led to a number of redundancies across the Group.”
Age is no barrier to enthusiasm, and despite being 80 years old this year, Sir David continues to work with his engineering teams on innovation and product strategy. He said: “The pandemic has required us all to develop new approaches and learn new skills. Since March I have enjoyed collaborating with our engineers and with other Board members via digital platforms.”
And the company continues to invest in future technologies, with gross engineering costs of £82.4 million amounting to 16 per cent of total revenue.
Sir David added: “Innovation remains at the heart of everything that we do and has been fundamental to our success over the last 47 years. We believe our people are fundamental to our disruptive thinking and manufacturing excellence which helps our customers to increase their own innovation, improve quality, expand output and enhance efficiency.”
Chief Executive, Will Lee, said: “This has been a year unlike any that most of us will ever have encountered. We were facing challenging trading conditions prior to the pandemic and had already taken actions to improve productivity and reduce the Group’s cost base. These included not replacing staff who had left the business, reductions in direct manufacturing staff in the UK, Ireland and India, the restructuring of our additive manufacturing (AM) business, and a business resizing that required the difficult decision to instigate redundancy programmes. The overall impact was a total headcount reduction of 578 during the year.”
But there were bright spots, added Will: “While all regions experienced a reduction in revenue, our position encoder product line did achieve good growth due to a recovery in the semiconductor market. Despite the challenges, we remain focused on the long term with a key priority being the development of technologies that provide patented products to support the strategies for our metrology and healthcare segments.”
Despite the very challenging year, the Group says it is in a strong financial position.
Will said: “We continue to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world. Given the uncertain macroeconomic backdrop, including the pandemic and the risks posed by reduced freedom of global trade, we expect very challenging market conditions, particularly in the automotive and aerospace sectors.”
Renishaw remains confident in the long-term prospects for the Group due to the high quality of its people, innovative product pipeline, extensive global sales and marketing presence and relevance to high-value manufacturing.”