QMT News: February 2011
Record half year results for Renishaw

In an interim statement, Renishaw's chairman and chief executive, Sir David McMurtry, has reported record Group results in terms of both revenue and profit for the six months to 31st December 2010.
Total group revenue for the six months to 31st December 2010 was £129.3m, 75% ahead of the £73.9m for the corresponding period last year and, more significantly, 26% above the previous highest first half year revenue of £102.7m reported in 2009. All geographic areas saw good progress, with growth of 60% in Europe, 66% in the Americas and 103% in the Far East, in particular China which has become the Group's largest market.

Group profit before tax for the period was £35.5m, compared with £7.1m last year, and compared with £15.3m, being the previous highest first half year profit before tax, in 2006. Earnings per share were 39.0p, an increase of 400% over last year's earnings of 7.8p.

Segmental analysis
The performance of Renishaw's Metrology business exceeded company expectations in the first half year, with revenue of £120.4m, compared with £65.9m in the corresponding period last year, an increase of 83%.
Demand for all product lines grew compared with last year, with machine tool and encoder products showing particularly high increases.
Further to the announcement in July 2010 regarding a new investment in Measurement Devices Limited, the Group acquired, in December 2010, a further 10% of the share capital for an amount of £0.8m. In January 2011, the shareholding was increased by another 10%, at a cost of £0.8m, to a total of 49%.
Operating profit for this segment was £39.3m, compared with £9.0m last year.

Renishaw's Healthcare operations continue to develop in its newer dental, neuro and diagnostic activities and also in the longer established spectroscopy business.
Revenue from Healthcare products rose 11% to £8.9m (December 2009 8.0m) but, given the significant set-up costs and continuing research and development costs, an operating loss of £4.2m was made (December 2009 loss £2.1m).
Renishaw continue to work with Biomet, with a facility for the production of dental crowns and bridge structures established in Palm Beach Gardens for the North America market, complementing the already established unit in the company's Stonehouse facility, servicing the European market.
During the period, the Group made its first sale of the enhanced Renishaw Mayfield surgical robot to Frenchay Hospital in the UK.

Balance sheet
Capital expenditure of £7.5m was incurred during the six months to 31st December 2010, to accommodate continued expansion of production, sales and research facilities.
The expansion and fit-out of Renishaw's Pune facility in India has now been completed and the expanded facilities will be officially opened in February 2011.
Refurbishment of Renishaw's Charfield premises, close to its New Mills site, is scheduled for completion at the end of March 2011 and will house Healthcare operations currently located at New Mills.
At the end of December 2010 inventories were £40.0m compared with £30.9m at 30th June 2010.
The Group continues to have a strong balance sheet, with net cash balances of £28.9m, compared with £31.1m at 30th June 2010.

The Group workforce has grown from 2,099 to 2,280 at the end of December 2010, Renishaw report that there are currently 248 outstanding vacancies, of which 161 are in the UK and 87 overseas. (see Renishaw recruitment advertisement on QMT websit: http://www.qualitymanufacturingtoday.com/display_list.cfm?edtyp=J)

The Group started the second half of this financial year with an increased order book (£28.4m compared to £23.3m at 30th June 2010), continuing strong worldwide demand for its expanding product range and a healthy balance sheet. Sir David McMurtry said, "There are, of course, potential uncertainties and challenges, but your directors view the future with great confidence."

Sir David McMurtry, stated " In line with our progressive dividend policy, an interim dividend of 10.3 pence per share will be paid on 11th April 2011, to shareholders on the register on 11th March 2011. This represents an increase of 33% over the 7.76p paid for 2008 and 2009, being the previous highest interim dividend payment."



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