Revenues rise again at Renishaw, but Far East sales are a drag

Engineering company also making plans for Brexit
W Renishaw HQ

Revenue for the six months to 31st December 2018 at global engineering and manufacturing business Renishaw rose six per cent to £296.7 million the company has revealed.

The Wootton-under-Edge company experienced revenue growth in all regions bar the Far East which was one per cent below the corresponding period last year. Renishaw says this is largely as a result of a slow-down in demand for its encoder products and from large end-user manufacturers of consumer electronic products.

However, its metrology business has seen strong growth in both its additive manufacturing and measurement and automation product lines and in its healthcare business has seen strong growth in its spectroscopy product line.

Renishaw, which has invested significantly in infrastructure, the recruitment of high calibre people to support growth opportunities, and research and development says it is now well placed to benefit from these investments and is not planning a significant headcount increase in the second half of the year.

The company says it continues to monitor the current economic uncertainties, particularly those arising from trading conditions between the US and China. It warns that if prolonged, this could have an adverse impact on group revenue as a result of reduced demand for products manufactured by its customers, particularly in China.

Renishaw is also making arrangements for Brexit. In the year ended June 2018, 25 per cent of group revenue resulted from trading with the EU.

The Board believes that Renishaw is well placed to respond to changes to future trading arrangements between the EU and the UK and is currently establishing a distribution warehouse in Ireland which, if required, will significantly reduce the number of direct shipments from the UK to the EU post Brexit.

Inventory holdings of certain components and finished goods are being increased above standard levels and located within the EU to mitigate the risk of delays in customs and border clearances. The Group has also assessed the potential cost impact of World Trade Organisation tariffs coming into force for exports from the UK and imports into the UK, and it believes that the cost of these potential tariffs is not expected to be material to the Group’s results.

Renishaw is one of the world’s leading engineering and scientific technology companies, with expertise in precision measurement and healthcare. The company employs over 5,000 people worldwide and supplies products for use in applications as diverse as jet engine and wind turbine manufacture, through to 3D printing, dentistry and brain surgery.