REG - Oxford Instruments - Half Year Trading Update

Oxford InstrumentsAnnouncement

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RNS Number : 0747D  Oxford Instruments PLC  13 October 2025

 

Oxford Instruments plc

Interim trading update - 13 October 2025

 

Improved momentum through Q2, after tariff disruption in Q1. Expecting stable
full year on an organic constant currency basis

 

Oxford Instruments plc, a leading provider of scientific technology and
expertise to academic and commercial partners, is today issuing a trading
update for the six months ended 30 September 2025 for continuing
operations(1).

 

The period saw contrasting order dynamics across our two divisions, with
market turbulence, primarily due to tariffs and resulting global economic
uncertainty, having a greater impact on order intake in our Imaging and
Analysis (I&A) division than previously anticipated. In our Advanced
Technologies (AT) division, market tailwinds in the compound semiconductor
market, and our expansion into volume manufacturing customers, have continued
to drive very strong order growth.

 

At Group level, this has resulted in first half order intake up just over 1%
OCC(2) versus prior year, with a Q1 decline of around 3%, followed by growth
of nearly 6% in Q2. I&A order intake in Q1 was down 11%, and Q2 flat on
prior year. AT order intake grew 25% in Q1 and 26% in Q2. Our half-year
book-to-bill ratio is expected to be around 1.1 (1.0 H1 prior year).

 

Given the profile of order intake, H1 revenues for the period are expected to
be down around 8% OCC versus the prior year (down 10% on a reported basis).

 

The high contribution margin on I&A revenue lost in H1 is expected to
result in an OCC adjusted operating profit margin for the period of around
14.5% (13.5% on a reported basis). We anticipate a substantially stronger H2
margin performance versus H1 as modest revenue growth resumes, in addition to
a typically seasonally stronger H2, the benefit of Belfast cost savings, and
other margin improvement initiatives implemented across the Group.

 

On a reported basis we expect H2 revenue to be marginally up versus H2 of the
prior year. Consequently, on an organic constant currency basis we now expect
Group full year revenue, adjusted operating profit(3) (AOP) and AOP margin to
be similar to the prior year.

 

Imaging & Analysis

As US tariff policy evolved through Q1 we successfully re-priced the majority
of the US open order book to mitigate any profit impact. However, divisional
order intake was impacted in Q1 as some academic and commercial customers
delayed purchases in response to the shifting global trading environment and
resulting broader uncertainty.

 

Consequently, order intake fell around 6% OCC in H1, with Q1 falling 11%, and
Q2 in line with prior year. This contributed to OCC revenues being around 9%
lower in H1 compared to the prior year (down nearly 11% on a reported basis).

 

Our teams have been agile and effective in responding to the shifting trading
and tariff landscape, including adapting our manufacturing and supply chain
footprint, and innovating around the challenges, including the supply of rare
earth materials. We continue to monitor developments and are working to
mitigate any potential impacts.

 

Business improvement actions already taken in our Belfast imaging business,
including significant workforce reductions, a refocused product portfolio, and
a renewed focus on key OEM partnerships, will all have a material positive
impact on margins in H2. The pace of any recovery of the healthcare and life
sciences market continues to be a key uncertainty for the Belfast business
this year, with conditions remaining challenging. Our priority remains on
winning greater market share through focused sales effort and new products.

 

Advanced Technologies

We continue to see strong positive momentum in our compound semiconductor
business, with a 25% OCC growth in H1 orders and a full order book for H2.
Augmented reality and datacomms applications have been the main drivers of
order growth, with an increasing number of orders coming from major commercial
players for volume manufacture applications. The move to the new Severn Beach
facility is fully complete, with a significant positive impact on customer
confidence and opportunity generation. We expect this positive momentum to
continue into the remainder of the year.

 

Divisional H1 OCC revenue is expected to be around 7% lower than prior year
(8% on a reported basis), primarily due to tariff-related delays in shipments
to China from our US based X-Ray business, and the postponement of delivery of
a limited number of high value compound semiconductor systems into Q3.

 

Currency

We anticipate a further headwind of approximately £1m to operating profit in
addition to earlier guidance of £4.5m. This is reflected in our updated
expectations for the full year.

 

Sale of NanoScience

The sale of the NanoScience business is progressing well and is expected to
complete during Q3, in line with guidance.

 

Richard Tyson, CEO, commented:

 

"The start of our financial year coincided with the beginning of a turbulent
time in our markets, as others in the sector have commented on. I am proud of
our team's proactive and customer-focused approach to this very dynamic global
trading landscape, driving an improving picture in Q2, albeit we are now
assuming that we will not recover the H1 revenue shortfall.

 

"At the same time, it has been particularly pleasing to see demand for our
compound semiconductor business continuing to grow at a fast pace. Our new
Severn Beach facility, and the performance of our market-leading technologies,
have proved to be clear differentiators for Oxford Instruments in the market."

 

"Whilst the macro picture continues to be fluid, the agility of our teams, in
combination with the strategic actions we have taken, gives us the confidence
in delivering progress in H2."

 

Oxford Instruments management will host a conference call for analysts and
investors at 07:45am today (Monday 13 October).

 Dial-in numbers         UK-wide: +44 (0) 33 0551 0200

                         UK toll free: 0808 109 0700
 Password (if prompted)  Quote 'Interim Trading Update' when prompted by the operator

 

Oxford Instruments management expects to announce interim results on 11
November 2025.

 

Notes:

1.         Excludes all revenues and costs directly related to the
NanoScience business which will exit the Group upon final deal closing. Any
costs previously allocated to the NanoScience business which will not exit the
business at deal close are presented within continuing operations. All prior
year comparators are presented on the same basis.

For reference a pro-forma consolidated statement of income for FY25 for
continuing operations is [resented below. These numbers exclude all revenue
and costs directly related to the NanoScience business (Discontinued
operations).

 FY25                              H1     H2     Full Year

                                   £'m    £'m    £'m
 Revenue
 Imaging and Analysis              153.8  176.5  330.4
 Advanced Technologies             50.4   61.5   111.9
 Total revenue                     204.2  238.0  442.2

 Adjusted operating profit         35.9   43.8   78.6
 Adjusted operating profit margin  17.2%  18.3%  17.8%

 

These numbers are unaudited and for guidance only. A full version will be
issued as part of the Interim statements publication on 11 November 2025.

2.         Organic constant currency numbers are prepared on a
month-by-month basis using the translational and transactional exchange rates
which prevailed in the previous year rather than the actual exchange rates
which prevailed in the year. Transactional exchange rates include the effect
of our hedging programme. They also exclude the impact of acquisitions and
divestment made in the comparator periods.

3.         Adjusted items exclude the amortisation and impairment of
acquired intangible assets, acquisition items, business reorganisation costs,
other significant non‑recurring items, and the mark-to-market movement of
financial derivatives.

 

The financial information in this trading update is unaudited.

LEI: 213800J364EZD6UCE231

 

Enquiries:

Oxford Instruments plc

Richard Tyson, Chief Executive Officer

Paul Fry, Chief Financial Officer

Stephen Lamacraft, Head of Investor
Relations                     Stephen.lamacraft@oxinst.com

 

MHP Group

Katie Hunt/Tim Rowntree/
                 07710 117517

Veronica Farah
                             oxfordinstruments@mhpgroup.com
(mailto:oxfordinstruments@mhpgroup.com)

 

About Oxford Instruments plc

Oxford Instruments provides academic and commercial organisations worldwide
with market-leading scientific technology and expertise across its key market
segments: materials analysis, semiconductors, and healthcare & life
science. Innovation is the driving force behind Oxford Instruments' growth and
success, supporting its core purpose to accelerate the breakthroughs that
create a brighter future for our world. The vigorous search for new ways to
make our world greener, healthier and more productive is driving unprecedented
levels of R&D investment in new materials and techniques to support
productivity and decarbonisation worldwide, creating a significant opportunity
for Oxford Instruments to grow. Oxford Instruments holds a unique position to
anticipate global drivers and connect academic researchers with commercial
applications engineers, acting as a catalyst that powers real world progress.
Founded in 1959 as the first technology business to be spun out from Oxford
University, Oxford Instruments is now a global, FTSE250 company listed on the
London Stock Exchange (OXIG). For more information, visit www.oxinst.com
(http://www.oxinst.com)

 

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