Renishaw slumps as it warns over full-year results

Shares in Renishaw slumped as the engineering group cautioned that full-year results would come in below previous guidance.

The company said at its half-year results back in January that it had experienced a slowdown in demand in Asia for its encoder products and from large end-user manufacturers of consumer electronic products. It said on Thursday that these conditions are now expected to continue through the rest of the financial year, hence its lowered expectations.

It now expects full-year revenue of between £595m and £620m and adjusted pre-tax profit of between £117m and £135m. This is down from its previous guidance of £635m to £665m and £140m to £160m, respectively.

Statutory pre-tax profit is forecast to come in between £123m to £141m, below previous guidance of £146m to £166m.

"Notwithstanding current economic uncertainties, the board remains confident in the future prospects of the group," it said.

At 1405 GMT, the shares were down 10.7% to 3,750p.

Russ Mould, investment director at AJ Bell, said: "With only 5% of its sales going to firms based in the UK and a wide-spread of client industries Renishaw has a good insight into what is going on globally and it is always worth listening whenever this high-quality company speaks.

"Today’s profit warning and forecast of lower annual profits will therefore be a worry for investors, especially as Renishaw has suffered just seven drops in earnings in the past 25 years and they all came during times of a slowdown or recession around the world."