Renishaw profits hit by 'challenging' global macro environment

Metrology and technology group Renishaw posted a fall in first-quarter profit and revenue on Tuesday as it said trading is expected to remain challenging throughout the rest of 2019.

In the three months ended 30 September, revenues declined 19.09% after a number of large orders from end-user manufacturers of consumer electronic products across the Asia Pacific region were not repeated this year.

In the metrology business, revenues dropped 18.79% to £119.7m, while healthcare revenues tumbled 25.76% to £4.9m due to the timing of additive manufacturing machine sales.

As a result of the weaker revenues, Renishaw said adjusted pre-tax profits had crashed 86.81% to £4.3m - including restructuring provisions of £2m following the decision to close its additive manufacturing facility in Stone, Staffordshire.

Renishaw said it had experienced reduced demand for its products as a result of a "challenging global macroeconomic environment", something it expects to continue until at least the end of the trading year.

The FTSE 250 group said structural demand drivers in its end-markets remain intact. Renishaw said it was in a strong financial position and remained committed to its 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," the company said.

Renishaw said the balance sheet remained "strong", with net cash balances of £98.5m as of 30 September compared to £106.8m at 30 June.

As of 0830 BST, Renishaw shares had slumped 10.67% to 3,180p.