TIDMRSW

RNS Number : 8419C

Renishaw PLC

22 October 2020

Renishaw plc

Trading update

22 October 2020

Renishaw plc, the global high-precision metrology and healthcare technology group, publishes this trading update for the three months ended 30 September 2020. It contains unaudited information that covers the first quarter of the financial year and the period since.

Trading activity

 
                        3 months to      3 months to   Change 
                       30 September     30 September 
                               2020             2019 
 
 Metrology                GBP110.2m        GBP119.7m      -8% 
                    ---------------  ---------------  ------- 
 Healthcare                 GBP5.7m          GBP4.9m     +16% 
                    ---------------  ---------------  ------- 
 Total Revenue            GBP116.9m        GBP124.6m      -6% 
                    ---------------  ---------------  ------- 
 
 Adjusted* Profit 
  before tax               GBP18.3m          GBP4.3m    +326% 
                    ---------------  ---------------  ------- 
 Statutory Profit 
  before tax               GBP28.2m          GBP5.1m    +453% 
                    ---------------  ---------------  ------- 
 

Group revenue for the first quarter of the current financial year was GBP116.9m, compared to GBP124.6m for the corresponding period last year.

In our metrology business revenue amounted to GBP110.2m compared to GBP119.7m last year. Geographically, we have experienced revenue growth in our APAC region where we have seen increased demand for our optical and laser encoder product lines due to a recovery in the semiconductor market. Revenue in our EMEA and Americas regions has reduced due to the ongoing uncertainty caused by the pandemic and weaker demand, particularly in the aerospace and automotive sectors.

In our healthcare business revenue was GBP5.7m compared with GBP4.9m last year, with increased demand for both our spectroscopy and neurological product lines.

Adjusted profit before tax for the first quarter amounted to GBP18.3m compared with GBP4.3m last year and the statutory profit before tax amounted to GBP28.2m (2019: GBP5.1m). A reconciliation of statutory to adjusted profit before tax is included at the foot of this update.

Adjusted profit before tax has benefitted from a number of actions taken last year to reduce the Group's operating cost base and also included global job retention grant income totalling GBP2.3m (2020: GBPnil).

Financial position

The Group balance sheet remains strong with net cash and bank deposit balances of GBP152.6m as at 30 September 2020 (30 June 2020: GBP120.4m).

Outlook

The Group is in a strong financial position and 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 continuing uncertain macroeconomic backdrop, including the pandemic, we continue to expect challenging market conditions, particularly in the aerospace and automotive sectors.

Your Directors remain confident in the prospects of the Group due to the high quality of our people, our innovative product pipeline, extensive global sales and marketing presence and relevance to high-value manufacturing.

The results for the half year ending 31 December 2020 will be released on 4 February 2021.

 
 Sir David McMurtry   Will Lee 
 Executive Chairman   Chief Executive 
 
 22 October 2020 
 
 
 Renishaw plc 
 Registered office    New Mills, Wotton-under-Edge, Gloucestershire, 
                       GL12 8JR 
 Registered number    01106260 
 LEI number           21380048ADXM6Z67CT18 
 Telephone number     +44 (0) 1453 524524 
 Website              www.renishaw.com 
 
   *    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'.

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:

 
 GBP'm                                                         3 months           3 months 
                                                        to 30 September    to 30 September 
                                                                   2020               2019 
                                                                GBP'000            GBP'000 
 
 Statutory profit before tax                                       28.2                5.1 
 
 Fair value (gains)/losses on financial instruments 
  not eligible for hedge accounting 
  - reported in revenue                                           (0.2)              (1.2) 
  - reported in (gains)/losses from the fair value 
   of financial instruments                                       (9.7)                0.4 
 
 Adjusted profit before tax                                        18.3                4.3 
----------------------------------------------------  -----------------  ----------------- 
 

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