Renishaw posts ‘incredible’ results as turnover nears £500m

Renishaw, the metrology and engineering company, had investors jumping for joy this morning as its full year statement revealed record turnover of nearly £495m, record profits, a rock solid balance sheet and cash position.

Company chairman Sir David McMurtry said the technology company had experienced an “incredible year” in its full-year investor statement today.

The Gloucestershire-based company posted record turnover of £494.7m, up 39% on 2014. Profits before tax were also a record, at £144.2m an increase of 105% on 2014’s £70.1m.  Astonishingly, the increase in revenue since 2014 tops its revenues after the first 30-years of business, £139m.

Growth was fuelled by high demand for its machine tools, automated measurement, additive manufacturing and encoder products.

The healthcare division made a loss but the company said it was investing heavily in R&D to build this division up. Capital expenditure was up to £48.4m from £39m in 2014, just under 10% of group turnover. The company has invested in new machine tools, and expanding several facilities including the new Renishaw Innovation Centre at New Mills in Gloucestershire, the laser plant at Stone in Staffs and facilities in Spain, Mexico and the US.

Among the highlights, the firm’s RESOLUTE metrology product has won the company its 18th Queen’s Award for Exports.

Renishaw’s balance sheet stands out for such a high cost, high technology business. It has a cash balance of £82m plus £14.7m in its pension scheme escrow account. Investors will have been licking their lips as the final period dividend of 34p per share made the year’s total dividend 46.5p, an increase of 13% over 2014.

The exceptional performance was outlined further by group finance director Allan Roberts, who reminded investors that it had taken Renishaw just over 30-years to record a revenue of £139m “This year we have achieved this as an increment from last year’s revenue, which was also a record,” he said.

As well as a slew of impressive financials, the engineering firm’s headcount has increased to over 4,200, with UK employees up to 2,725, an increase of 411 since 2014. Overseas headcount is 1,387, a rise of 209 people and across the group this includes 30 apprentices and 58 graduates this year. Renishaw currently has over 200 vacancies for technical positions unfilled.

Among the running costs to the business, annual R&D spend of £55m – representing over 11% of turnover – meant that engineering costs had risen to £63.3m, up 19% year-on-year, new product launch spending was £42.3m, up 17% and spending in its primary metrology business was up to £55m from £43m. These costs, including higher headcount and associated costs of employment, were factors for finance director Allan Roberts to predict slower growth in 2016, in the £430m to £470m range.

A big exporter, Renishaw’s busiest foreign markets in 2015 were China – up to £119.6m sales from £66.6m – the US (£82.3m) and South Korea. Sales in South Korea were extraordinary, rising from £10.5m in 2014 to £73.1m this year.

While assistant chief executive Ben Taylor, who announced he would retire in July 2016, was bullish about most product lines and divisions, the healthcare business has faltered. Its spectroscopy products slowed down in 2015, with sales falling 20% in Asia and 18% in Europe but increasing by 25% in the US, and up 37% in the UK & Ireland.