News Column

Renishaw Profit Down In Third Quarter Despite Revenue Growth

May 14, 2014

Steve McGrath

LONDON (Alliance News) - Engineering company Renishaw PLC Wednesday reported a lower pretax profit for its fiscal third quarter, although revenue increased thanks to demand for its additive manufacturing, encoder and measurement automation product lines.

The company reported a pretax profit, excluding exceptional credits, of GBP14.4 million for the three months to March 31, down from GBP15.9 million a year earlier, even though revenue rose to GBP84.5 million from GBP81.9 million.

The company didn't give a reason for the profit fall in its statement, but the profit decline it had reported in the first half of the year had largely been down to higher costs.

The company's revenue performance in the third quarter was an improvement from the first half of the year, when revenue had declined 4.2%. However, revenue for the first nine months of the company's financial year is still down 3% at GBP248.5 million due to the fall in the first half, which the company blamed on the exceptionally high demand from some customers in the Far East in the first half of last year.

It said it had experienced growth in the Americas, the Far East and the UK in the third quarter of this financial year.

However, the strength of sterling knocked GBP4.7 million of its third-quarter revenue figure compared with the previous year, it added.

On a divisional basis, revenue rose 5% to GBP78.8 million in its Metrology business, thanks to the demand for its additive manufacturing, encoder and measurement automation product lines.

However, revenue in its healthcare unit fell 21% to GBP5.7 million. It didn't say why, but said US clearance for marketing of its neuromate robotic system, a robot that can assist with a range of neurosurgical procedures, will open up new sales opportunities in the world's biggest medical devices market.

"The group faced tough financial comparators for the first half of this financial year and sterling has strengthened in recent months. With global investment in production systems and processes expected to expand and our continuing investment in our business sectors, we remain confident for the long-term prospects of the group," Renishaw said in its statement.

Renishaw shares were down 4.2% at 1,761.38 pence Wednesday morning, the biggest decline on the FTSE 250.

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Source: Alliance News

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