Renishaw Regulatory News (RSW)

Renishaw plc

Trading update

22 October 2020

Renishaw plc, the global high-precision metrology and healthcare technology group, publishes this trading update for the three months ended 30 September 2020. It contains unaudited information that covers the first quarter of the financial year and the period since.

Trading activity

Group revenue for the first quarter of the current financial year was £116.9m, compared to £124.6m for the corresponding period last year.

In our metrology business revenue amounted to £110.2m compared to £119.7m last year. Geographically, we have experienced revenue growth in our APAC region where we have seen increased demand for our optical and laser encoder product lines due to a recovery in the semiconductor market. Revenue in our EMEA and Americas regions has reduced due to the ongoing uncertainty caused by the pandemic and weaker demand, particularly in the aerospace and automotive sectors.

In our healthcare business revenue was £5.7m compared with £4.9m last year, with increased demand for both our spectroscopy and neurological product lines.

Adjusted profit before tax for the first quarter amounted to £18.3m compared with £4.3m last year and the statutory profit before tax amounted to £28.2m (2019: £5.1m). A reconciliation of statutory to adjusted profit before tax is included at the foot of this update.

Adjusted profit before tax has benefitted from a number of actions taken last year to reduce the Group's operating cost base and also included global job retention grant income totalling £2.3m (2020: £nil).

Financial position 

The Group balance sheet remains strong with net cash and bank deposit balances of £152.6m as at 30 September 2020 (30 June 2020: £120.4m).

Outlook

The Group is in a strong financial position and we continue to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world. Given the continuing uncertain macroeconomic backdrop, including the pandemic, we continue to expect challenging market conditions, particularly in the aerospace and automotive sectors.

Your Directors remain confident in the prospects of the Group due to the high quality of our people, our innovative product pipeline, extensive global sales and marketing presence and relevance to high-value manufacturing.

The results for the half year ending 31 December 2020 will be released on 4 February 2021.

* Adjusted profit before tax

The adjustment to statutory profit relates to the accounting treatment of certain forward currency contracts used as hedging instruments which do not qualify for hedge accounting as they do not meet the hedge effectiveness criteria set out in the International Accounting Standard IFRS 9 'Financial Instruments'.

The Board deems that the adjusted profit before tax better reflects the underlying performance of the Group. The following table reconciles statutory profit before tax to adjusted profit before tax: