Renishaw says dip in profit is short-term blip
PRECISION engineering firm Renishaw said its quarterly profit fell 15 per cent on continued investment in staff and infrastructure, but the company expects to overcome the shortfall and grow profits for the year.
The company, which makes and sells precision and inspection products for the healthcare and metrology industries, said activity in April was ahead of last year.
“Despite continuing global macroeconomic uncertainties, we have experienced good growth over the year to date and are starting to see signs of an upturn in the electronics market,” Renishaw said in a statement.
Pre-tax profit fell to £21.4m for the third quarter from £25.2m a year earlier.
January-March revenue rose four per cent to £81.6m, with growth in Europe, the UK and the US, which is also the company’s biggest single market.
Shares of the company, which have gained 33 per cent this year, closed up 9.4 per cent at 1,473p yesterday.
Scott Cagehin, an analyst at Numis who has a “hold” recommendation on the stock said: “Profits are lower but this is driven by a higher cost base to support revenue growth and increased research and development.
“However, management expects to generate good profits in the fourth quarter and full-year 2012 pre-tax profit should be ahead year-on-year. With high operational gearing, we believe that there is good potential upside risk with a recovery in its electronics sector coupled with the benefits of restructuring its healthcare business.”