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11 Mar 2009 08:00
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Renishaw plc
11thΒ March 2009
TradingΒ update
Since the Group's interim report on 28th January 2009, trading conditions have deteriorated further andΒ the well-publicised global recession continues to impact mostΒ of the industries in which our customers operate.Β The Group's sales of measuring equipmentΒ areΒ particularly affected by the demand for capital goods in industriesΒ such as automotive which are unlikely to recoverΒ in the near term.Β Monthly sales have continued to decline and the Group hasΒ experiencedΒ an operating loss in both January and February.Β ThisΒ loss is after accounting forΒ aΒ 20% voluntary reduction in group salariesΒ effective from 9thΒ February 2009.Β The Board does not expect anΒ improvement during theΒ remainder of ourΒ current financial yearΒ ending 30thΒ June 2009Β and as a resultΒ expectsΒ to recordΒ an operating lossΒ (before exceptionalΒ items) inΒ the order ofΒ Β£10 million for the second half.
In view of the severity of this downturn in performance, the Board hasΒ already initiated a programme of overhead cost reductionsΒ with target annual pre-tax savings of Β£10m.Β TodayΒ the Board alsoΒ announces the start of a consultation process leading to aΒ redundancy programme to reduceΒ employeeΒ headcount by approximately 500 employeesΒ worldwide.Β RenishawΒ is hoping that it will be able to limit the number of proposed redundancies and revisions may beΒ madeΒ depending on theΒ financial performance over the coming months.Β If this programme is implemented in fullΒ it isΒ expected to result in annualised savings of approximately Β£20 millionΒ before tax with effect from 1stΒ July 2009,Β at a one-off cash cost to the Group of Β£8 million.Β This will be treated as an exceptional item in this year's accounts. The savings arising from this action are in addition to the voluntary 20% pay cut which has been effective sinceΒ FebruaryΒ and it isΒ beingΒ proposedΒ that this beΒ extended until further notice, representing a quarterly saving of some Β£4.5 million in the current year.
SirΒ David McMurtry,Β Chairman andΒ Chief Executive,Β said: "In view of the unprecedented slowdown in customer demandΒ for measuring equipmentΒ in recent months we have been forced to take decisive action to reduce our cost base in order toΒ protectΒ ourΒ business for the future.Β We will continue to invest in our products and markets and, even during these difficult times, I am pleased to see the interest the market is showing in our spectroscopy, dental, neuro and advanced metrology equipment.Β It is with great personal regret that, due to the exceptionalΒ and unprecedentedΒ global recession in which we find ourselves, we have to impose this process on our employees who have always shown greatΒ loyalty andΒ dedication toΒ the Group."Β
Enquiries:
Allen Roberts 01453 524445
Renishaw plc
Registered office. New Mills, Wotton-under-Edge,Β Gloucestershire,Β GL12 8JR
Registered number. 1106260
Telephone number. 01453 524524
Website. www.renishaw.com
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