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(Alliance News) - Metrology and healthcare products manufacturer Renishaw PLC on Tuesday said challenging trading conditions and the non-repeat of large orders led to a sharp year-on-year drop in first-quarter revenue and profit.
Renishaw shares were trading 9.7% lower at 3,214.84 pence each in London in morning trade.
Renishaw said revenue for the three months to September 30 fell 19% to GBP124.6 million from GBP154.0 million a year ago, with core metrology business revenue dropping to GBP119.7 million from GBP147.4 million. Revenue from smaller healthcare business fell to GBP4.9 million from GBP6.6 million.
Metrology is measuring. Renishaw specialises in machine calibration, machine tool probes, and medical and scientific spectroscopy.
"The first quarter of financial 2019 benefited from a number of large orders from end-user manufacturers of consumer electronic products in the Asia-Pacific region which have not been repeated this year. Furthermore, we have experienced reduced demand for our products as a result of the challenging global macroeconomic environment," Renishaw said.
The drop in healthcare business revenue was blamed upon the timing of some machine sales.
As a result, Renishaw's quarterly pretax profit dived 85% to GBP5.1 million from GBP33.5 million a year ago. Adjusted pretax profit dropped to GBP4.3 million from GBP32.6 million.
Renishaw expects trading conditions to remain challenging through the remainder of financial 2020 due to uncertain global economic environment.
"The group is in a strong financial position and remains committed to our long-term strategy of delivering growth through the development and introduction of innovative and patented products. However, as previously indicated, we are focussed on improving productivity and we are committed to undertaking further initiatives to reduce the group's cost base," Renishaw said.
Renishaw is set to release its results for half year ending December 31 on January 30.
By Tapan Panchal; tapanpanchal@alliancenews.com
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