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(Alliance News) - Oxford Instruments PLC on Tuesday reported a higher annual profit due to a substantially higher share of profit from an associate company, adding that revenue is ahead so far in its new financial year.
The Abingdon, England-headquartered company, which makes products, systems and tools for research and industry, posted a GBP38.8 million pretax profit for its financial year ended March 31, up 13% from GBP34.3 million the previous year.
Revenue was 1.1% higher at GBP317.4 million compared to GBP314.0 million, however cost of sales increased 2.8% to GBP159.0 million, meaning gross profit was actually lower at GBP158.4 million compared to GBP159.3 million.
Nonetheless, pretax profit rose thanks largely to Oxford Instruments' GBP7.2 million share of profit of an associate net of tax, far higher than the GB500,000 share of associate profit in financial 2019.
Given the uncertainty surrounding the Covid-19 pandemic, Oxford Instruments has opted to suspend its interim dividend of 4.1 pence per share and to defer its decision on dividend payments. As such, no dividend was declared for financial 2020, while dividends totalling 14.4p per share were paid out in financial 2019.
Chief Executive Ian Barkshire said: "The coronavirus has continued to impact trading in the first two months of the year, with cumulative orders 3% below a weak comparator period, and with growth in Asia of 19% offsetting a reduction in Europe and North America of 23% and 7% respectively. A strong uplift in orders for our compound semiconductor process solutions has offset a reduction in orders for our higher-margin scientific cameras and optical microscopy products, which have been severely impacted by disruption across academic customers. Group revenue is 3% above last year, assisted by delivery of shipments that were held over from the year end due to Covid-19.
"We have an active pipeline of sales opportunities, reinforced by our digital marketing and online sales presence; but activity levels within academic institutions remain low due to continued customer site closures."
CEO Barkshire commented that understanding "the impact and longevity of this disruption" will take time but Oxford Instruments will be taking steps to adapt and protect the business. Guidance will be issued once "an improved level of visibility" is achieved.
"Our strategy is to operate in attractive markets with long-term fundamental growth drivers and to focus on segments where we can maintain leadership positions. With the increasing demand for electric vehicles and digital communications infrastructure, and the need for improved energy‑efficient devices, medicines and diagnostic tools, we are confident that our end markets are resilient and should not be weakened in the long term by Covid-19 headwinds," the CEO said.
Shares in Oxford Instruments were up 2.7% at 1,292.00p in London in morning trading.
Separately, Oxford Instruments announced the appointment of Alison Wood as an independent non-executive director. She will join the board on September 8 provided shareholders approve her appointment at the annual general meeting.
Wood worked in business development and strategy at BAE Systems PLC and was the global director of strategy & corporate development at National Grid PLC.
Currently, she is a non-executive director at TT Electronics PLC and Costain Group PLC, as well as Cairn Energy PLC.
By Anna Farley; annafarley@alliancenews.com
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