REG - Renishaw PLC - Half-year Report
13/02/2025 07:00
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RNS Number : 9285W Renishaw PLC 13 February 2025
Renishaw plc
13 February 2025
Interim report for the six months ended 31 December 2024 (H1 FY2025)
Steady progress in H1 with demand picking up at the start of H2
6 months to 6 months to Change (%)
31 December 31 December
2024 2023
Revenue (£m) 341.4 330.5 +3
Profit before tax* (£m) 57.5 56.5 +2
Operating profit* (£m) 51.6 47.2 +9
Earnings per share* (pence) 63.2 62.1 +2
Dividend per share (pence) 16.8 16.8 -
Adjusted* cash flow from operating activities (£m) 51.5 22.9 +125
Performance highlights
1. H1 FY2025 revenue 3% higher at £341.4m (H1 FY2024: £330.5m):
· 2% revenue growth at constant exchange rates*, excluding impact of
forward contracts;
· Growth in Americas and EMEA, lower revenue in APAC;
· Manufacturing technologies up 4% at £322.6m, with growth from
Position Measurement and Additive Manufacturing products, weaker demand from
machine builders for Industrial Metrology products; and
· Analytical instruments and medical devices 3% lower at £18.8m, with
growth in Neurological products offset by lower Spectroscopy sales.
2. Profit before tax 2% higher at £57.5m (H1 FY2024: £56.5m):
· Gross margin excluding engineering costs improved by 1.0% to 61.5%;
· Operating profit up 9% at £51.6m at actual exchange rates, down 5% at
constant currency; and
· Profit before tax in Q2 was lower than Q1 due to less favourable
currency contracts, adverse product mix, and one-off supply chain costs.
3. Adjusted* cash flow conversion from operating activities above target at
100%, reflecting strong operating cash flows and planned lower capital
expenditure:
· Strong balance sheet, with cash and cash equivalents and bank deposit
balances of £233.2m (30 June 2024: £217.8m).
4. Continued progress on our strategic priorities, with new product launches
in H1 that strengthen our position in established and emerging markets.
5. Interim dividend of 16.8 pence per share.
6. Outlook:
· Order intake recently improved, steady revenue growth expected to
continue in H2;
· FY2025 revenue range: £695m to
£735m; and
· FY2025 adjusted profit before tax: £105m to £135m.
* For this period and the comparable period there is no difference between
'Statutory' and 'Adjusted' for some of our alternative performance measures,
being Adjusted profit before tax, Adjusted earnings per share and Adjusted
operating profit. Note 12, Alternative performance measures, defines how other
alternative measures are calculated.
Will Lee, Chief Executive, commented:
"We have continued to make steady progress in mixed trading conditions and our
order intake has recently improved, particularly from the semiconductor
manufacturing and consumer electronics sectors. Supported by our strategic
progress, we expect to achieve steady revenue growth this year. Our markets
present significant structural growth opportunities, and we are confident that
the investment that we are currently making in productivity improvements will
drive our operating margins towards our 20% target in the medium term."
About Renishaw
We are a world leading supplier of measuring and manufacturing systems. Our
products give high accuracy and precision, gathering data to provide customers
and end users with traceability and confidence in what they are making. This
technology also helps our customers to innovate their products and processes.
We are a global business, with customer-facing locations across our three
sales regions; the Americas, EMEA, and APAC. Most of our R&D work takes
place in the UK, with our largest manufacturing sites located in the UK,
Ireland and India.
Further information can be found at www.renishaw.com (http://www.renishaw.com)
Results presentation
See below a video presentation of these results, presented by Will Lee, Chief
Executive, and Allen Roberts, Group Finance Director.
Live Q&A session
There will be a live audio-only question and answer session with Will and
Allen at 10:30 GMT on 13 February 2025. Details of how to register for this
webcast are available at the following link:
https://www.renishaw.com/en/register-for-the-2025-interim-results-webcast--49582
(https://www.renishaw.com/en/register-for-the-2025-interim-results-webcast--49582)
Questions can be submitted in advance of the webcast to
communications@renishaw.com (mailto:communications@renishaw.com) (please
submit by 9:30 GMT on 13 February).
A recording of the Q&A session will be made available by 14 February 2025
at: www.renishaw.com/investors (https://www.renishaw.com/en/investors--22615)
.
Enquiries: communications@renishaw.com (mailto:communications@renishaw.com)
Overview for the six months ended 31 December 2024
Revenue
Revenue for the six months ended 31 December 2024 was £341.4m, 3% higher than
£330.5m for the corresponding period last year. Manufacturing technologies
revenue increased by 4%, with growth in Position Measurement (PM) and Additive
Manufacturing (AM) products and weaker demand from machine builders for
Industrial Metrology (IM) products. Analytical instruments and medical devices
revenue was 3% lower, with growth in Neurological products being offset by
lower demand for Spectroscopy products.
At constant currency*, Group revenue increased by 2%. APAC revenue was down 1%
at constant currency, with weaker sales of IM products to the consumer
electronics sector, although orders from these customers have recently
improved. By contrast, sales of position encoders to semiconductor equipment
manufacturers rose during the period, also supported by a strengthening order
book. EMEA revenue was 5% higher at constant currency, with strong growth in
co-ordinate measuring machine (CMM) systems, AM systems and position encoders,
but weaker demand for IM sensors from machine builders. Americas revenue also
grew by 5% at constant currency, with growth in AM systems and position
encoders, and also has an improved order book.
6 months to 6 months to Change % Constant fx* change %
31 December 31 December
2024 2023
Group revenue £341.4m £330.5m +3% +2%
Comprising:
APAC £161.4m £161.2m +0% -1%
EMEA £102.3m £97.2m +5% +5%
Americas £77.7m £72.1m +8% +5%
New product introductions and commercialisation
We have made progress during the first six months of the financial year in
each of our three strategic priorities:
1. Growing in our existing markets - aiming to increase revenue by
driving up probe fitment levels, offering usable and higher value sensors, and
by winning more machine builder customers.
· Enhanced the usability of our twin probe system for machine tools,
introducing patented Opti-Logic™ technology for fast set-up using a
smartphone app.
· Launched enhancements to our range of modular metrology fixtures,
improving ease-of-use and reducing environmental impact.
· Continued to win new customers and grow revenue from our FORTiS™
enclosed position encoders, now featuring longer axis lengths for larger
machine tools.
2. Increasing the value of the technology we sell - aiming to provide
our end-user customers with complete solutions to capture a greater proportion
of their investment.
· Launched the RenAM 500D dual laser AM machine, featuring our patented
TEMPUS™ technology, offering production speeds up to three times faster than
conventional single laser systems.
· Added five new processable materials for our AM machines and new powder
layer thicknesses for existing materials.
3. Extending into new, high-growth markets - aiming to diversify into
close-adjacent markets where we have strong market understanding and brand
awareness.
· Launched our new ASTRiA™ inductive encoder line, offering robust and
accurate position measurement in demanding environments, including robotics,
defence and medical devices.
Operating profit and costs
Operating profit for the period was £51.6m, a 9.3% increase on the previous
period. This amounts to 15% of revenue, against 14% last year, and against our
target of 20%. The current period includes significant gains from forward
currency contracts, which were entered into at favourable rates following
volatility in currency markets arising from the September 2022 UK 'mini
Budget'. These benefits were mostly experienced in Q1. When excluding these,
and translating H1 FY2025 results at FY2024 exchange rates, operating profit
at constant exchange rates* was 4.9% lower than the previous year.
Labour costs have increased by £9.6m compared to the prior financial year.
This increase primarily results from January 2024 salary reviews, plus a net
headcount increase of 98 (which mostly relates to graduates and apprentices).
Our salary review in January 2025 amounted to around 4% of our total labour
costs, which will increase our labour costs in the second half of the
financial year by around £7m. While we will continue to invest in employee
remuneration to ensure competitiveness and retention of highly skilled and
trained employees, our recruitment plans will also need to consider the impact
of the UK Government's October 2024 Budget, which is expected to increase
FY2025 labour costs by £1m and will add £4m to our annual costs.
Our gross margin (excluding engineering costs) for the period was 61.5% of
revenue, an improvement of 1% over the comparable period in the previous year.
Within this gross margin, we have seen favourable variances relating to
currency and component purchase costs, however these have been partly offset
by continued pricing pressures, particularly in the APAC region. We have also
experienced a specific supply chain quality issue during Q2, which has
resulted in around £2m of non-recurring costs. This impacted the pace of
product shipments in the period, which we expect to catch up in H2.
We remain committed to our long-term strategy of developing innovative and
patented products to create strong market positions. During the first six
months of this financial year, our gross engineering spend, including research
and development, increased by 8% to £55.5m. This increase mostly related to
labour costs, and includes £1.4m of severance costs relating to the closure
of a research site in Edinburgh, UK.
We have controlled distribution and administrative expenses, with no
significant year-on-year increase at actual exchange rates. This includes
further increases in third-party support and maintenance costs in relation to
our ongoing IT transformation, which will lead to productivity benefits in
future years.
Profit and tax
Financial income less expenses for the period was £4.1m compared with £6.8m
last year. While interest on bank deposits increased by £1.3m, we have
experienced £1.7m of currency losses (FY2024 H1: £1.0m gain) on intragroup
financing balances and mitigating forward currency swap contracts.
The resulting profit before tax for the period was £57.5m (17% of revenue)
compared with £56.5m (17% of revenue) last financial year. In previous
reporting periods, we have reported adjusted profit measures. For this period
and the comparable period there are no adjusting items, and therefore adjusted
and statutory profit measures are equivalent.
The income tax expense in the Consolidated income statement has been estimated
at a rate of 20.1% (H1 FY2024: 20.1%) and is based on management's best
estimate of the full year effective tax rates by geographical unit applied to
half-year profits. This compares to 21.0% in FY2024.
Earnings per share were 63.2p, compared with 62.1p last year.
Operating profit for our Manufacturing technologies segment, which comprises
our Industrial Metrology, Position Measurement and Additive Manufacturing
products, was £52.8m for the first six months, compared with £46.0m for the
same period in the last financial year. Our Analytical Instruments and
medical devices segment, which comprises our Spectroscopy and Neurological
products, made a loss of £1.2m in the first six months compared with a profit
of £1.2m for the same period in the last financial year.
Cash flow
In working capital, our trade receivables have reduced by £21.5m, in line
with the profile of our quarterly revenue and with minimal movement in debtor
days, while we continue to carefully manage our inventory balances, which have
reduced by £4.2m to £157.8m.
We have reduced our planned capital expenditure during the period following
the significant investment in our manufacturing facility in Wales over the
previous two years. The first of the two new halls became operational in
FY2024, which provides additional production capacity for our physically
larger products including CMMs, additive manufacturing machines and enclosed
encoders.
As a result, we have achieved strong adjusted* cash flow conversion from
operating activities of 100%, which is above our target of 70%. Cash and cash
equivalents and bank deposit balances at 31 December 2024 were £233.2m,
compared with £217.8m at 30 June 2024, primarily reflecting cash generated
from operating activities of £76.2m, less capital expenditure of £23.4m, and
the final dividend payment of £43.2m in respect of FY2024.
Dividend
The Board has approved an interim dividend of 16.8p net per share (FY2024:
16.8p), which will be paid on 8 April 2025 to shareholders on the register on
7 March 2025.
Principal risks and uncertainties
The Board has considered the risks and uncertainties which could have a
material effect on the Group's
performance and position. While there is heightened uncertainty arising from
geopolitical matters and trade
tensions, these have not yet impacted our business, and the Board continues to
monitor the situation closely. The overall impact and likelihood of our other
principal risks is not considered to have changed
significantly. This conclusion also reflects the mitigation undertaken by the
Group in response to these
risks. The principal risks and uncertainties set out on pages 11 to 18 of the
2024 Annual Report therefore
remain relevant.
Sustainability
We continue to make strong progress towards our target of Net Zero for Scopes
1 and 2 emissions by 2028. During the period, we have started work on
converting heating systems at our facility in Pliezhausen, Germany, from oil
to a lower-carbon alternative. We are also focused on reducing our Scope 3
emissions, including working with key suppliers to reduce the carbon impact of
the materials that we use to make our products. Last year we increased the
recycled content of our raw aluminium supply, generating annual savings of
3,000 tonnes of CO2, and are now working on further supply chain savings with
other suppliers and materials.
We continue to see significant commercial opportunities arising from the drive
towards sustainable business practices. Our products help our customers to
meet their sustainability targets by increasing their manufacturing
efficiencies through lower energy consumption and waste, and also by improving
the performance of the products they supply to their own customers.
Sir David McMurtry
In December 2024, it was with profound sadness that we announced the death of
our co-founder and Non-executive Director, Sir David McMurtry. We have since
been overwhelmed by messages of support from around the world. People
reflected on David's role as a visionary and empathetic business leader, as a
passionate innovator, how he shaped an entire industry, and also his decency,
humility and great sense of humour. Whilst his presence is deeply missed, the
ethos that he and John Deer instilled in Renishaw continues to guide us.
Directors and employees
The Directors would like to thank our employees for continuing to drive us
forward towards our vision to innovate and transform the capabilities of our
customers.
Sir David McMurtry's son, Richard McMurtry, joined the Board as a
Non-executive Director in July 2024. The Renishaw Board is working to appoint
an Independent Non-executive Chair whilst continuing work on succession
planning, including additional Non-executive Director recruitment.
Outlook
The Board remains confident in our growth model, built on solving customer
problems with innovative products, global service and world-class in-house
manufacturing. Whilst we operate in cyclical markets, we aim for high
single-digit average organic growth rates through the cycle, to improve our
operating profit margins to above 20%, and to generate strong free cash
flow.
We have continued to make steady progress in mixed trading conditions and our
order intake has recently improved, particularly from the semiconductor
manufacturing and consumer electronics sectors. Supported by our strategic
progress, we expect to achieve steady revenue growth this year. Our markets
present significant structural growth opportunities, and we are confident that
the investment that we are currently making in productivity improvements will
drive our operating margins towards our 20% target in the medium term.
At this stage we expect full year revenue to be in the range of £695m to
£735m. Adjusted profit before tax is expected to be in the range of £105m to
£135m.
Will Lee Allen Roberts
Chief Executive Group Finance Director
( ) ( )
12 February 2025 ( )
( ) ( )
* For this period and the comparable period there is no difference between
'Statutory' and 'Adjusted' for some of our alternative performance measures,
being Adjusted profit before tax, Adjusted earnings per share and Adjusted
operating profit. Note 12, Alternative performance measures, defines how other
alternative measures are calculated.
Consolidated income statement
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
from continuing operations Notes £'000 £'000 £'000
Revenue 2 341,402 330,489 691,301
Cost of sales 3 (182,060) (175,904) (367,658)
Gross profit 159,342 154,585 323,643
Distribution costs (68,276) (68,871) (139,901)
Administrative expenses (39,506) (38,520) (75,075)
Operating profit 51,560 47,194 108,667
Financial income 4 6,339 7,168 12,336
Financial expenses 4 (2,221) (351) (2,289)
Share of profits from joint ventures 1,806 2,530 3,880
Profit before tax 57,484 56,541 122,594
Income tax expense 5 (11,555) (11,364) (25,705)
Profit for the period 45,929 45,177 96,889
Profit attributable to:
Equity shareholders of the parent company 45,929 45,177 96,889
Non-controlling interest - - -
Profit for the period 45,929 45,177 96,889
Pence Pence Pence
Dividend per share arising in respect of the period 7 16.8 16.8 76.2
Earnings per share (basic and diluted) 6 63.2 62.1 133.2
Consolidated statement of comprehensive income and expense
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Profit for the period 45,929 45,177 96,889
Other items recognised directly in equity:
Items that will not be reclassified to the Consolidated income statement:
Remeasurement of defined benefit pension scheme assets/liabilities 732 (49,459) (48,688)
Deferred tax on remeasurement of defined benefit pension scheme (84) 12,349 12,424
assets/liabilities
Total for items that will not be reclassified 648 (37,110) (36,264)
Items that may be reclassified to the Consolidated income statement:
Exchange differences in translation of overseas operations (1,864) 1,576 (4,038)
Exchange differences in translation of overseas joint venture (528) 159 (311)
Current tax on translation of net investments in foreign operations - (297) 57
Effective portion of changes in fair value of cash flow hedges, net of (11,188) 4,422 5,812
recycling
Deferred tax on effective portion of changes in fair value of cash flow hedges 2,839 (1,105) (1,453)
Total for items that may be reclassified (10,741) 4,755 67
Total other comprehensive income and expense, net of tax (10,093) (32,355) (36,197)
Total comprehensive income and expense for the period 35,836 12,822 60,692
Attributable to:
Equity shareholders of the parent company 35,836 12,822 60,692
Non-controlling interest - - -
Total comprehensive income and expense for the period 35,836 12,822 60,692
Consolidated balance sheet
Unaudited Unaudited Audited
At 31 December At 31 December At 30 June
2024 2023* 2024
Notes £'000 £'000 £'000
Assets
Property, plant and equipment 8 334,997 318,036 325,040
Right-of-use assets 13,773 10,049 14,746
Investment properties 10,076 10,181 10,285
Intangible assets 9 49,224 48,319 47,343
Investments in joint ventures 26,089 24,529 25,485
Finance lease receivables 14,430 8,814 11,944
Employee benefits 11,410 9,128 10,845
Deferred tax assets 17,558 20,006 17,690
Derivatives 10 2,052 3,233 1,387
Total non-current assets 479,609 452,295 464,765
Current assets
Inventories 157,758 174,383 161,928
Trade receivables 10 112,616 116,268 134,073
Finance lease receivables 3,382 3,552 3,861
Current tax 8,123 13,642 21,298
Other receivables 43,756 37,693 34,076
Derivatives 10 5,412 11,585 13,547
Bank deposits 143,000 119,000 95,542
Cash and cash equivalents 90,161 59,258 122,293
Total current assets 564,208 535,381 586,618
Current liabilities
Trade payables 23,544 22,011 21,330
Contract liabilities 13,806 7,811 10,880
Current tax 2,662 1,452 1,767
Provisions 3,963 2,722 2,997
Derivatives 10 2,385 1,529 448
Lease liabilities 3,915 3,217 3,960
Amounts owed to joint ventures 13 11,570 - 8,475
Borrowings 773 4,372 747
Other payables 40,059 43,654 50,344
Total current liabilities 102,677 86,768 100,948
Net current assets 461,531 448,613 485,670
Non-current liabilities
Lease liabilities 10,313 7,083 11,062
Borrowings 2,491 - 2,775
Employee benefits - 90 -
Deferred tax liabilities 30,106 27,007 33,600
Derivatives 10 2,520 - 177
Total non-current liabilities 45,430 34,180 47,614
Total assets less total liabilities 895,710 866,728 902,821
Equity
Share capital 14,558 14,558 14,558
Share premium 42 42 42
Own shares held (2,367) (2,963) (2,963)
Currency translation reserve 88 8,210 2,480
Cash flow hedging reserve 2,562 9,869 10,911
Retained earnings 880,362 836,649 876,990
Other reserve 1,042 940 1,380
Equity attributable to the shareholders of the parent company 896,287 867,305 903,398
Non-controlling interest (577) (577) (577)
Total equity 895,710 866,728 902,821
* December 2023 Other receivables have been reclassified to include Contract
assets.
Consolidated statement of changes in equity
Unaudited Own Currency Cash flow Non-
Share Share shares translation hedging Retained Other controlling
capital premium held reserve reserve earnings reserve interest Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2023 14,558 42 (2,963) 6,772 6,552 871,777 497 (577) 896,658
Profit for the period - - - - - 45,177 - - 45,177
Other comprehensive income and expense (net of tax)
Remeasurement of defined benefit pension assets/liabilities - - - - - (37,110) - - (37,110)
Foreign exchange translation differences - - - 1,279 - - - - 1,279
Relating to joint ventures - - - 159 - - - - 159
Changes in fair value of cash flow hedges - - - - 3,317 - - - 3,317
Total other comprehensive income and expense - - - 1,438 3,317 (37,110) - - (32,355)
Total comprehensive income and expense - - - 1,438 3,317 8,067 - - 12,822
Transactions with owners recorded in equity
Share-based payments charge - - - - - - 443 - 443
Own shares purchased - - - - - - - - -
Dividends paid - - - - - (43,195) - - (43,195)
Balance at 31 December 2023 14,558 42 (2,963) 8,210 9,869 836,649 940 (577) 866,728
Profit for the period - - - - - 51,712 - - 51,712
Other comprehensive income and expense (net of tax)
Remeasurement of defined benefit pension assets/liabilities - - - - - 846 - - 846
Foreign exchange translation differences - - - (5,260) - - - - (5,260)
Relating to joint ventures - - - (470) - - - - (470)
Changes in fair value of cash flow hedges - - - - 1,042 - - - 1,042
Total other comprehensive income and expense - - - (5,730) 1,042 846 - - (3,842)
Total comprehensive income and expense - - - (5,730) 1,042 52,558 - - 47,870
Transactions with owners recorded in equity
Share-based payments charge - - - - - - 440 - 440
Dividends paid - - - - - (12,217) - - (12,217)
Balance at 30 June 2024 14,558 42 (2,963) 2,480 10,911 876,990 1,380 (577) 902,821
Profit for the period - - - - - 45,929 - - 45,929
Other comprehensive income and expense (net of tax)
Remeasurement of defined benefit pension assets/liabilities - - - - - 648 - - 648
Foreign exchange translation differences - - - (1,864) - - - - (1,864)
Relating to joint ventures - - - (528) - - - - (528)
Changes in fair value of cash flow hedges - - - - (8,349) - - - (8,349)
Total other comprehensive income and expense - - - (2,392) (8,349) 648 - - (10,093)
Total comprehensive income and expense - - - (2,392) (8,349) 46,577 - - 35,836
Transactions with owners recorded in equity
Share-based payments charge - - - - - - 412 - 412
Distribution of own shares - - 750 - - - (750) - -
Purchase of own shares - - (154) - - - - - (154)
Dividends paid - - - - - (43,205) - - (43,205)
Balance at 31 December 2024 14,558 42 (2,367) 88 2,562 880,362 1,042 (577) 895,710
Consolidated statement of cash flow
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period 45,929 45,177 96,889
Adjustments for:
Depreciation of property, plant and equipment, right-of-use assets, and 12,278 11,506 24,195
investment properties
Profit on sale of property, plant and equipment (1,005) (29) (1,199)
Amortisation and impairment of intangible assets 2,394 2,888 8,633
Share of profits from joint ventures (1,806) (2,530) (3,880)
Defined benefit pension scheme past service and administrative costs 494 397 907
Financial income (6,339) (7,168) (12,336)
Financial expenses 2,221 351 2,289
Share based payment expense 412 445 883
Tax expense 11,555 11,364 25,705
20,204 17,224 45,197
Decrease in inventories 4,170 11,374 23,829
Decrease/(increase) in trade and other receivables 8,337 486 (23,719)
Increase/(decrease) in trade and other payables (5,101) (6,381) 3,557
Increase/(decrease) in provisions 966 (36) 239
8,372 5,443 3,906
Defined benefit pension scheme contributions (79) (83) (161)
Income taxes received/(paid) 1,815 (12,191) (21,752)
Cash flows from operating activities 76,241 55,350 124,079
Investing activities
Purchase of property, plant and equipment, and investment properties (23,352) (40,443) (65,518)
Sale of property, plant and equipment 2,814 200 4,475
Development costs capitalised (4,079) (4,542) (9,281)
Purchase of other intangibles (226) (30) (246)
(Increase)/decrease in bank deposits (47,458) 6,000 29,458
Interest received 6,091 4,745 9,110
Dividend received from joint venture 674 573 498
Cash flows from investing activities (65,536) (33,497) (31,504)
Financing activities
Repayment of borrowings (390) (393) (799)
Amounts received as deposit from joint venture 3,361 - 8,475
Interest paid (491) (351) (608)
Repayment of principal of lease liabilities (2,069) (2,607) (4,359)
Own shares purchased (154) - -
Dividends paid (43,205) (43,195) (55,412)
Cash flows from financing activities (42,948) (46,546) (52,703)
Net (decrease)/increase in cash and cash equivalents (32,243) (24,473) 39,872
Cash and cash equivalents at the beginning of the period 122,293 81,388 81,388
Effect of exchange rate fluctuations on cash held 111 2,343 1,033
Cash and cash equivalents at the end of the period 90,161 59,258 122,293
Cash and cash equivalents and bank deposits at 31 December 2024 were £233.2m
(30 June 2024: £217.8m).
Notes
1. Basis of preparation
The Interim report, which includes the condensed consolidated financial
statements for the six months ended 31 December 2024, was approved by the
Directors on 12 February 2025.
The condensed consolidated financial statements for the six months ended 31
December 2024 were prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting' (IAS 34) as issued by the
International Accounting Standards Board and as adopted by the UK. These apply
the same accounting policies, presentation and methods of calculation as were
applied in the preparation of the Group's consolidated financial statements
for the year ended 30 June 2024, except for income taxes which are accrued
using the forecast tax rate for the financial year.
The condensed consolidated financial statements included in this Report have
not been audited and do not constitute the Group's statutory accounts as
defined in section 434 of the Companies Act 2006. The information relating to
the year ended 30 June 2024 is an extract from the Group's published Annual
Report for that year, which has been delivered to the Registrar of Companies,
and on which the auditor's report was unqualified and did not contain any
emphasis of matter or statements under section 498(2) or 498(3) of the
Companies Act 2006.
Going concern
The Directors have prepared the unaudited interim financial information on a
going concern basis. In considering the going concern basis, the Directors
have considered the previously mentioned principal risks and uncertainties, as
well as the Group's current trading performance and updated cashflow
forecasts. The Directors have also considered the financial resources
available to the Group, with net current assets of £461.5m at 31 December
2024 (compared to £485.7m at 30 June 2024), including £233.2m cash and cash
equivalents and bank deposits at 31 December 2024.
We have updated our reverse stress testing to identify what would need to
happen in the period to 28 February 2026 for the Group to deplete its cash and
cash equivalents and bank deposit balances. This identified a trading level so
low (significantly below FY2024 revenue) that the Directors feel that the
events that could trigger this would be remote. The Directors also concluded
that a one-off cash outflow that would exhaust the Group's cash and cash
equivalents and bank deposit balances in the assessment period was also
remote.
Based on this assessment, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they
fall due over the period to 28 February 2026.
2. Revenue disaggregation and segmental analysis
Within the Manufacturing technologies segment there are multiple product
offerings with similar economic characteristics, similar production processes
and similar customer bases. Our Manufacturing technologies segment consists of
Industrial Metrology, Position Measurement and Additive Manufacturing product
groups. Analytical instruments and medical devices segment comprises our
Spectroscopy and Neurological product lines. More details of the Group's
products and services are given in the Strategic Report of the 2024 Annual
Report.
In normal trading conditions, whilst future revenue is difficult to predict
given that the Group's outstanding order book is typically less than three
months' worth of revenue value, larger consumer electronics orders in the APAC
region within the Manufacturing technologies segment typically fall in the
first or last quarter of the financial year. In addition, the Group typically
experiences lower demand in August and December, and so revenue and operating
profits are typically lower in the first half of the year. This information is
provided to allow for a better understanding of the results, and management do
not believe that the business is 'highly seasonal' in accordance with IAS 34.
Analytical instruments and medical devices
Manufacturing technologies
Total
6 months to 31 December 2024 £'000 £'000 £'000
Revenue 322,625 18,777 341,402
Depreciation, amortisation and impairment 13,780 892 14,672
Operating profit 52,774 (1,214) 51,560
Share of profits from joint ventures 1,806 - 1,806
Net financial income - - 4,118
Profit before tax - - 57,484
2. Segmental information (continued) Analytical instruments and medical devices
Manufacturing technologies
Total
6 months to 31 December 2023 £'000 £'000 £'000
Revenue 311,069 19,420 330,489
Depreciation, amortisation and impairment 13,391 783 14,174
Operating profit 45,953 1,241 47,194
Share of profits from joint ventures 2,530 - 2,530
Net financial income/(expense) - - 6,817
Profit before tax - - 56,541
Year ended 30 June 2024
Revenue 648,063 43,238 691,301
Depreciation, amortisation and impairment 31,374 1,454 32,828
Operating profit 103,181 5,486 108,667
Share of profits from joint ventures 3,880 - 3,880
Net financial income/(expense) - - 10,047
Profit before tax - - 122,594
There is no allocation of assets and liabilities to segments identified above.
Depreciation, amortisation and impairments are allocated to segments on the
basis of the level of activity.
The following table shows the disaggregation of Group revenue by category:
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Goods, capital equipment and installation 306,441 300,745 624,491
Aftermarket services 34,961 29,744 66,810
Total Group revenue 341,402 330,489 691,301
Aftermarket services include repairs, maintenance and servicing, programming,
training, extended warranties, and software licences and maintenance. There is
no significant difference between our two reporting segments as to their split
of revenue by type.
The following table shows the analysis of revenue by geographical market:
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
APAC 161,366 161,199 318,836
UK (country of domicile) 18,825 17,173 37,956
EMEA, excluding UK 83,486 80,035 170,077
EMEA 102,311 97,208 208,033
Americas 77,725 72,082 164,432
Total Group revenue 341,402 330,489 691,301
Revenue in the previous table has been allocated to regions based on the
geographical location of the customer. Countries with individually significant
revenue figures in the context of the Group were:
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
China 87,976 90,369 177,155
USA 67,345 60,707 138,836
Japan 25,036 26,366 54,572
Germany 28,175 25,646 49,329
There was no revenue from transactions with a single external customer
amounting to 10% or more of the Group's total revenue.
3. Cost of sales
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Production costs 131,486 130,473 269,562
Research and development expenditure 33,781 32,156 71,060
Other engineering expenditure 21,758 19,390 35,723
Gross engineering expenditure 55,539 51,546 106,783
Development expenditure capitalised (net of amortisation) (1,855) (2,065) (4,287)
Development expenditure impaired - - 3,299
Research and development tax credit (3,110) (4,050) (7,699)
Total engineering costs 50,574 45,431 98,096
Total cost of sales 182,060 175,904 367,658
4. Financial income and expenses
6 months to 6 months to Year ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Financial income
Bank interest receivable 6,091 4,745 9,110
Interest on pension schemes' assets 248 1,439 2,908
Fair value gains from one-month forward currency contracts - 380 318
Currency gains - 604 -
Total financial income 6,339 7,168 12,336
Financial expenses
Currency losses 1,448 - 1,645
Lease interest 348 214 537
Fair value losses from one-month forward currency contracts 264 - -
Interest payable on amounts owed to joint ventures 74 - 55
Interest payable on borrowings 18 24 36
Other interest payable 69 113 16
Total financial expenses 2,221 351 2,289
Currency losses relate to revaluations of foreign currency-denominated
balances using latest reporting currency exchange rates. The losses recognised
in FY2025 H1 largely related to an appreciation of Sterling relative to the
Mexican Peso affecting intragroup balances in the Company. We converted this
intra group balance to share capital towards the end of H1 such that we are no
longer exposed to the related currency risk.
Rolling one-month forward currency contracts are used to offset currency
movements on certain intragroup balances, with fair value gains and losses
being recognised in financial income or expenses.
5. Taxation
The income tax expense in the Consolidated income statement has been estimated
at a rate of 20.1% (H1 FY2024: 20.1%), based on management's best estimate of
the full year effective tax rates by geographical unit, applied to half-year
profits. This compares to 21.0% in FY2024.
6. Earnings per share
The earnings per share for the six months ended 31 December 2024 is calculated
on earnings of £45,929,000 (31 December 2023: £45,177,000) and on 72,729,059
shares (31 December 2023: 72,719,565 shares), being the number of shares in
issue during the period. This excludes 59,484 shares (31 December 2023: 68,978
shares) held by the Renishaw Employee Benefit Trust.
7. Dividends
6 months to 6 months to Year ended
31 December 31 December 30 June
Dividends paid during the period were: 2024 2023 2024
£'000 £'000 £'000
FY2024 final dividend paid of 59.4p per share (FY2023: 59.4p) 43,205 43,195 43,195
FY2024 Interim dividend paid of 16.8p per share (FY2023: 16.8p) - - 12,217
Total dividends paid during the period 43,205 43,195 55,412
All shareholders on the register on 7 March 2025 will be paid an interim
dividend of 16.8p net per share on 8 April 2025, resulting in a dividend
payable of £12,218,000.
8. Property, plant and equipment
Freehold Assets in the
land and Plant and Motor course of construction
buildings equipment vehicles Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2024 255,536 278,189 6,099 56,593 596,417
Additions 81 11,174 712 11,385 23,352
Transfers 2,284 6,430 - (8,714) -
Disposals (527) (2,936) (564) - (4,027)
Currency adjustment (1,550) (1,248) (83) - (2,881)
At 31 December 2024 255,824 291,609 6,164 59,264 612,861
Depreciation
At 1 July 2024 49,460 216,838 5,079 - 271,377
Charge for the period 2,548 7,221 153 - 9,922
Disposals (251) (1,551) (416) - (2,218)
Currency adjustment (361) (792) (64) - (1,217)
At 31 December 2024 51,396 221,716 4,752 - 277,864
Net book value
At 31 December 2024 204,428 69,893 1,412 59,264 334,997
At 30 June 2024 206,076 61,351 1,020 56,593 325,040
Additions to assets in the course of construction of £11,385,000 (31 December
2023: £35,939,000) comprise £3,752,000 (31 December 2023: £25,685,000) for
freehold land and buildings and £7,633,000 (31 December 2023: £10,254,000)
for plant and equipment. At the end of the period, assets in the course of
construction, not yet transferred, of £59,264,000 (31 December 2023:
£83,553,000) comprise £35,969,000 (31 December 2023: £62,777,000) for
freehold land and buildings and £23,295,000 (31 December 2023: £20,776,000)
for plant and equipment. This mostly relates to the expansion of our
manufacturing facility in Miskin, Wales.
9. Intangible assets
Internally Software licences Intellectual property and other intangible assets
Goodwill generated
development costs
Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2024 20,258 187,941 12,197 4,864 220,301
Additions - 4,079 226 - 4,305
Currency adjustment (5) - (39) (10) (54)
At 31 December 2024 20,253 192,020 12,384 4,854 229,511
Amortisation
At 1 July 2024 9,028 154,531 11,751 2,607 177,917
Charge for the period - 2,224 86 84 2,394
Currency adjustment - - (34) 10 (24)
At 31 December 2024 9,028 156,755 11,803 2,701 180,287
Net book value
At 31 December 2024 11,225 35,265 581 2,153 49,224
At 30 June 2024 11,230 33,410 446 2,257 47,343
As detailed in the 2024 Annual Report, the key assumption in determining the
value-in-use of intangible assets are sales forecasts. Latest sales forecasts,
and other factors which may impact the business plans, for relevant cash
generating units have been reviewed for indicators of impairment on 31
December 2024. This includes an assessment of our discount rate based on
prevailing market assumptions on 31 December 2024, which has increased to
10.9% based on a higher risk-free rate (31 December 2023: 10.7%). As a result
of the review, no impairments have been recognised in the six months to 31
December 2024 (31 December 2023: nil).
10. Financial instruments
There is no significant difference between the fair value of financial assets
and financial liabilities and their book value in the Consolidated balance
sheet. All financial assets and liabilities are held at amortised cost, apart
from the forward exchange contracts which are held at fair value, with changes
going through the Consolidated income statement unless subject to hedge
accounting. The fair values of the forward exchange contracts have been
calculated by a third-party expert, discounting estimated future cash flows on
the basis of market expectations of future exchange rates, representing level
2 in the IFRS 13 fair value hierarchy. There were no transfers between levels
during any period disclosed.
Credit risk
The Group carries a credit risk relating to non-payment of trade receivables
by its customers. The Group establishes an allowance for impairment in respect
of trade receivables where recoverability is considered doubtful. In the six
months to 31 December 2024, the Group has generally not experienced a
deterioration in debtor repayments nor in the assumptions used in calculating
allowances for expected credit losses. At 31 December 2024, total expected
credit losses amounted to £4,756,000, being 4.1% of gross trade receivables,
compared with £4,480,000 at 30 June 2024, being 3.2% of gross trade
receivables.
Liquidity risk
The Group's approach to managing liquidity is to ensure, as far as possible,
that we will always have sufficient liquidity to meet our liabilities when
due, without incurring unacceptable losses or risking damage to the Group's
reputation. We use monthly cash flow forecasts on a rolling 12-month basis to
monitor cash requirements. Net cash and bank deposits on 31 December 2024
totalled £233,161,000, compared with £217,835,000 at 30 June 2024. This
increase included a dividend payment of £43,205,000 and cash generation from
operating activities of £76,241,000 during the period. In consideration of
this, the Group remains in a strong liquidity position.
10. Financial instruments (continued)
Market risk
The Group continues to mitigate market risk on cash flows using USD, EUR and
JPY forward currency contracts. At 31 December 2024 the total nominal value of
USD, EUR and JPY forward contracts held for cash flow hedging purposes was
£450,775,855 (31 December 2023: £414,873,000). At 31 December 2024, there
were no remaining USD, EUR or JPY forward contracts ineffective for cash flow
hedging and yet to mature (31 December 2023: nil), with no additional forward
contracts becoming ineffective for hedge accounting purposes in the six months
to 31 December 2024. A decrease of 10% in the highly probable revenue
forecasts of Renishaw plc and Renishaw UK Sales Limited, being the hedged
item, would result in no forward contracts becoming ineffective on 31 December
2024.
11. Employee benefits
The net surplus of the Group's defined benefit pension schemes, on an IAS 19
basis, has increased from a £10,845,000 asset at 30 June 2024 to a
£11,410,000 asset at 31 December 2024. This mostly relates to a reduction in
liabilities within the Irish scheme due to strong asset growth. During FY2024,
the Trustee of the UK scheme undertook a buy-in and insured around 99% of the
UK scheme's liabilities by purchasing an insurance policy. This contract was
effective from 19 October 2023 and the value of the contract is recognised as
a UK scheme asset. The buy-in eliminates investment return, longevity,
inflation and funding risks in respect of those liabilities covered. Changes
to other key assumptions from 30 June 2024 to 31 December 2024 have not had a
material effect on the schemes.
Benefits in the UK Scheme are subject to a DC underpin at the point of
retirement or transfer out. Historically, this has been allowed for in the
accounts in a consistent manner to current administrative practice and the
triennial funding valuations. During the buy-in process, it was identified
that the drafting of the DC underpin in the UK Scheme Rules may require that
the DC underpin is applied in a manner which is different to the
administrative practice which has been applied. The Trustee and Company are
currently seeking legal clarification and advice on this issue, with the
intention of correcting the Rules to match administrative practice. No
allowance for this matter has been made in 31 December 2024, as management
continue to assess it to be unlikely that there will be an increase in
liabilities, and due to the uncertainty of legal treatment and therefore any
potential impact on liabilities.
In June 2023, the High Court ruled that certain historic amendments made to
the rules of the Virgin Media pension scheme were invalid without the scheme's
actuary having provided the associated Section 37 certificates. This judgment
was upheld by the Court of Appeal in July 2024, which has implications on
other schemes that were contracted-out on a salary-related basis, and made
amendments between April 1997 and April 2016. The UK scheme was contracted out
until 5 April 2007 and amendments were made during the relevant period and as
such the ruling could have implications for the UK scheme. Since June 2024,
the Company and the Trustees have commenced a review of all amending documents
between 6 April 1997 and 5 April 2016 for the scheme to determine whether
proper procedures were undertaken at the time of the amendments by the
Trustees, actuaries and administrators. At the date of approving these interim
financial statements, the possible implications, if any, for the UK scheme not
having all Section 37 certificates have not been investigated in detail. The
Trustee and Company continue to seek legal advice on this matter and will act
appropriately. Accordingly, no amendments for this matter have been included
in the IAS 19 actuarial valuation as the impact, if any, cannot be reliably
assessed.
12. Alternative performance measures
In accordance with Renishaw's Alternative Performance Measures (APMs) policy
and ESMA Guidelines on Alternative Performance Measures (2015), this section
defines non-IFRS measures that we believe give readers additional useful and
comparable views of our underlying performance. We continue to report Revenue
at constant exchange rates, Adjusted profit before tax, Adjusted earnings per
share, Adjusted operating profit, Adjusted operating profit at constant
exchange rates, Adjusted cash flow conversion from operating activities, and
Return on invested capital.
Revenue at constant exchange rates is defined as revenue recalculated using
the same rates as were applicable to the previous year and excluding forward
contract gains and losses.
12. Alternative performance measures (continued)
Revenue at constant exchange rates 6 months to 31 December 2024 6 months to 31 December 2023
£'000 £'000
Statutory revenue as reported 341,402 330,489
Adjustment for forward contract (gains)/losses (12,959) 1,853
Adjustment to restate at previous year exchange rates 11,342 -
Revenue at constant exchange rates 339,785 332,342
Year-on-year revenue growth at constant exchange rates 2% -
For this period and the comparable period there is no difference between
'Statutory' and 'Adjusted' for our alternative performance measures, being
Adjusted profit before tax, Adjusted earnings per share and Adjusted operating
profit, including segmental operating profit.
Operating profit at constant exchange rates is defined as Operating profit
recalculated using the same rates as applied to the previous year and
excluding forward contract gains and losses.
Operating profit at constant exchange rates 6 months to 31 December 2024 6 months to 31 December 2023
£'000 £'000
Operating profit 51,560 47,194
Adjustment for forward contract (gains)/losses (12,959) 1,853
Adjustment to restate current year at previous year exchange rates 8,042 -
Operating profit at constant exchange rates 46,643 49,047
Year-on-year Operating profit reduction at constant exchange rates -4.9%
Adjusted cash flow conversion from operating activities is calculated as
Adjusted cash flow from operating activities as a proportion of Adjusted
operating profit. This is useful for the Board to measure how efficient we are
at converting operating profit into cash.
Adjusted cash flow conversion from operating activities 6 months to 31 December 2024 6 months to 31 December 2023 Year ended 30 June 2024
£'000 £'000 £'000
Cash flow from operating activities 76,241 55,570 124,079
Income taxes paid (1,815) 12,191 21,752
Purchase of property, plant and equipment and intangible assets (25,746) (45,015) (74,774)
Proceeds from sale of property, plant and equipment and intangible assets 2,814 200 4,475
Adjusted cash flow from operating activities 51,494 22,946 75,532
Adjusted cash flow conversion from operating activities 99.9% 48.6% 69.5%
Return on invested capital is the profit after tax before bank interest
receivable as a percentage of the Average invested capital in the year. This
is useful for the Board to measure our efficiency in allocating capital to
profitable activities.
Profit after tax before bank interest receivable is calculated as follows:
6 months to 31 December 2024 6 months to 31 December 2023 Year ended 30 June 2024
£'000 £'000 £'000
Profit after tax 45,929 45,177 96,889
Bank interest receivable (net of tax) (4,568) (3,559) (6,832)
Profit after tax before bank interest received 41,361 41,618 90,057
Profit after tax before bank interest received for the 12-months to 31
December 2024 was £89.8m.
12. Alternative performance measures (continued)
Return on invested capital (ROIC): 6 months to 31 December 2024 6 months to 31 December 2023 Year ended 30 June 2024 Year ended 30 June 2023
£'000 £'000 £'000 £'000
Total non-current assets 479,609 452,295 464,765 470,430
Total current assets 564,208 535,381 586,618 573,107
Total current liabilities (102,677) (86,768) (100,948) (102,320)
Less cash and cash equivalent (90,161) (59,258) (122,293) (81,388)
Less bank deposits (143,000) (119,000) (95,542) (125,000)
Invested capital 707,979 722,650 732,600 734,829
Average invested capital 715,314 - 733,715 -
Return on invested capital 12.6% - 12.3% -
Average invested capital in the year is the average of the invested capital at
the beginning of the reporting period and at the end of the reporting period.
13. Related party transactions and events subsequent to the end of
the reporting period
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. Full details of the Group's other related party relationships,
transactions and balances are given in the Group's Annual Report for the year
ended 30 June 2024.
During FY2024, Renishaw International Limited ('RIL') entered into a 14-day
notice deposit agreement with RLS Merilna tehnika d.o.o. ('RLS'). Interest is
payable by RIL to RLS at a market rate on a monthly basis. As at 31 December
2024, according to this agreement, the amount RIL had received was EUR 14.0m
(£11.6m equivalent), an increase from EUR 10.0m (£8.5m equivalent) at 30
June 2024. The amounts are recognised as 'amounts payable to joint venture' in
the Consolidated balance sheet.
No other related party transactions have taken place in the first six months
of FY2025, or events subsequent to the end of the reporting period, that have
materially affected the financial position or the performance of the Group
during that period.
14. Responsibility statement
The condensed set of financial statements is the responsibility of, and has
been approved by, the Directors. We confirm that to the best of our knowledge:
- As required by DTR 4.2 of the Disclosure Rules and Transparency
Rules, the condensed set of financial statements, which has been prepared in
accordance with the applicable set of accounting standards, gives a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Company and the undertakings included in the consolidation as a whole. The
Interim report has been prepared in accordance with IAS 34, 'Interim Financial
Reporting', as issued by the International Accounting Standards Board and as
adopted by the UK.
- The Interim report includes a fair review of the information
required by:
(a) DTR 4.2.7 of the Disclosure Rules and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8 of the Disclosure Rules and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last Annual Report that could
do so.
On behalf of the Board
Allen Roberts FCA
Group Finance Director
12 February 2025
Registered office: Renishaw plc, New Mills, Wotton-under-Edge,
Gloucestershire GL12 8JR, U.K.
Registered number: 01106260
Company Secretary: companysecretary@renishaw.com
Telephone: +44 1453 524524
Website: www.renishaw.com
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