Oxford Instruments' profits rising as order growth improves

Oxford Instruments’ interim chairman Stephen Blair hailed a strong first half of the year and paid tribute to deceased chairman Alan Thomson at the company’s annual general meeting on Tuesday.

In a statement ahead of the meeting, Blair stated that the high technology tools and systems provider has seen a “good start” due to order growth across all three of its sectors, materials & characterisation, research & discovery and service & healthcare.

"This has translated into reported and constant currency revenue growth for the group. Operating profit is ahead of last year on a reported and constant currency basis. Looking ahead, we expect the second half of the financial year to benefit from the normal seasonal bias, with expectations for the full year remaining unchanged," wrote Blair, who took over the chairman role after the death of Alan Thomson, who had held the role since September 2016.

The board is in the process of appointing a permanent successor.

Broker Liberum said the statement showed that the London-listed company’s full year expectations remain intact after strong order growth and an increase in operating profit, and reiterated their ‘buy’ rating and target price of 1,100p.

Analysts at Peel Hunt said they were "now comfortable that Project Horizon will deliver a higher margin business with more stable, long-term revenue streams and that in due course the group could be delivering mid-single digit % revenue growth and high teens % operating margin and should therefore command a better rating".

The broker's full year forecasts were for adjusted PBT of £44.6m and earnings per share of 60.6p, rising to £46.6m and EPS of 63.4p for 2010, which is broadly in line with consensus.

Oxford Instruments’ shares were up 2.02% at 960.00p at 0934 BST.