REG - Renishaw PLC - Final Results
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RNS Number : 7866Z Renishaw PLC 18 September 2025
Renishaw plc
18 September 2025
Preliminary announcement of results for the year ended 30 June 2025
FY2025 highlights
Record revenue and increased adjusted profit in challenging market conditions
· 3.7% constant currency revenue growth from diversified portfolio
against a tough economic backdrop
· Accelerating innovation with new product introductions in
established, emerging and new markets to underpin future growth
· Stable adjusted operating profit margins, with productivity
initiatives and growth supporting improved gross margin (excl. engineering).
· Confidence in further progress towards margin improvement objective,
supported by £20m annualised payroll reduction to take effect in FY26 H1,
alongside £3m of annualised benefit from exiting Neurological drug delivery
· Continued strong cash generation and balance sheet
· Proposed full year dividend increased by 2.5%
Performance highlights
Adjusted* Statutory
FY2025 FY2024 Change FY2025 FY2024 Change
Revenue (£m) 713.0 691.3 +3.1% 713.0 691.3 +3.1%
Operating profit (£m) 112.3 108.7 +3.3% 107.9 108.7 -0.7%
Operating profit margin (%) 15.7% 15.7% - 15.1% 15.7% -0.6%
Profit before tax (£m) 127.2 122.6 +3.8% 118.0 122.6 -3.7%
Earnings per share (pence) 137.8 133.2 +3.5% 115.2 133.2 -13.5%
Dividend per share (pence) 78.1 76.2 +2.5%
Revenue was 3.1% higher at a record £713.0m (FY2024: £691.3m):
· Revenue at constant exchange rates, excluding the impact of forward
contracts, was £25.8m (3.7%) higher than the previous year;
· Manufacturing technologies revenue was 3.6% higher at £671.5m,
with good revenue growth from position encoders and 5-axis co-ordinate
measuring machine systems, whilst demand for additive manufacturing (AM)
systems was weaker; and
· Analytical instruments and medical devices revenue was 3.8% lower
at £41.5m, with growth in neurological products being offset by lower sales
of spectroscopy systems;
· 7.2% constant currency growth in APAC, including good growth in
China; 2.2% growth in Americas, whilst EMEA revenues were flat.
Adjusted profit before tax was 3.8% higher at £127.2m (FY2024: £122.6m):
· Gross margin excluding engineering costs improved to 61.7% (FY2024:
61.0%);
· Gross engineering costs increased by 8.3% to £115.7m (excluding
non-recurring costs) as we continue to invest in innovation, with distribution
and administration costs both 3.0% and 2.7% higher respectively; and
· Adjusted operating profit was up 3.3% to £112.3m (FY2024:
£108.7m), with adjusted operating profit margin flat at 15.7%; cost reduction
plans and productivity initiatives implemented to move towards our 20% target.
Statutory profit before tax was 3.7% lower at £118.0m (FY2024: £122.6m).
· Non-recurring costs included in statutory profit before tax include
a total of £4.4m relating to the closure of our Edinburgh research facility
and the drug delivery aspect of our Neurological business, as well as £4.9m
of provisions relating to other interest payable on historical and
non-recurring tax matters.
Adjusted earnings per share were 3.5% higher at 137.8 pence (FY2024: 133.2
pence), whilst statutory earnings per share were 13.5% lower at 115.2 pence
(FY2024: 133.2 pence).
· £9.2m of provisions relating to historical and non-recurring tax
matters are included in statutory profit after tax.
Strong balance sheet with cash and cash equivalents and bank deposit balances
of £273.6m, (FY2024: £217.8m):
· Invested £46.3m (FY2024: £65.2m) in capital expenditure, mostly
plant and equipment to support manufacturing automation and capacity growth;
· Return on invested capital* increased to 12.6% (FY2024: 12.3%);
· Adjusted cash flow conversion from operating activities* exceeded
target at 91% (FY2024: 70%); and
· Attention is increasingly focused on capital allocation priorities
to support the next phase of the company's development
Proposed final dividend of 61.3 pence per share.
*Note 29, Alternative performance measures, defines how each of these measures
is calculated.
Will Lee, Chief Executive Officer, commented:
"I am pleased to report record revenue in FY2025, combined with an increase in
adjusted profit before tax in what remain challenging market conditions. We
continue to make solid progress with our innovation-led growth strategy,
introducing many exciting new products this year and equipping our expanded
manufacturing facilities for future growth.
There has been a steady start to FY2026, in line with our expectations.
Despite the continued global uncertainty, the structural drivers that
underpin our markets are presenting growth opportunities across our businesses
and at this stage we are expecting to achieve further steady revenue growth in
the year ahead.
We are focused on achieving our financial targets over time of high,
single-digit average through-cycle revenue growth and adjusted operating
profit margins of 20%. To improve our margins, we are continuing to invest in
our IT transformation and productivity improvements, and we are reducing our
fixed costs in relation to the size of the business with clear targets for
production, engineering, distribution and administration costs.
The Board remains confident in our long-term sustainable growth model to drive
shareholder value. This is built on solving customer problems with innovative
products, global service and world-class in-house manufacturing."
Strategic progress
Our ambition is to deliver high single-digit growth through the business
cycle, combined with 20% operating margins, strong cash conversion and 15%
return on invested capital. Our long-term value creation model explains how
we will achieve these goals, including three areas of strategic focus:
1. Growing in our existing markets - aiming to increase revenue by
driving up probe fitment levels, offering higher value sensors, and by winning
more customers that build machinery.
• Introduced Opti-Logic™ technology in our twin probe system for
machine tools, making it easier and faster to set up using a smartphone app.
• We saw strong demand for laser encoders for semiconductor wafer
inspection this year. We launched our next generation of laser encoders with
improved metrology performance and 'plug-and-play' functionality, making them
easier to install and service.
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.
• Growth in sales of our AGILITY CMMs and Equator™ gauges, helped by
the continuing trend for automation of process control on the shop-floor.
• Launched the RenAM 500D dual laser AM machine which, when fitted
with our TEMPUS™ technology, prints up to three times faster than other
single laser systems.
• Introduced the Equator-X™ dual method gauging system and MODUS IM
Equator software at the end of the year, with full launch at the EMO Hannover
exhibition in September 2025. The software will make Equator systems easier to
use and help reduce distribution costs, with less need for applications
support.
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 ASTRiA™ inductive encoder line, which offers robust
and accurate position measurement in harsh environments, including robotics,
defence and medical devices.
Other strategic progress this year includes:
· First use of our new minimum viable product (MVP) approach which
enables us to bring products to market faster and gain confidence before
committing more development costs. This enabled us to rapidly develop and
launch the ASTRiA encoder.
· Actively managed our portfolio, exiting the drug delivery aspect of
our Neurological business, and continue to seek a new owner for the remaining
neurosurgical activities.
· Initiated an operating cost reduction programme to achieve
annualised payroll savings of £20m, taking effect in the first half of
FY2026. Additional initiatives to help achieve our ambition include more
manufacturing automation, prioritisation of R&D projects, and investments
in IT systems and AI to increase productivity across the business.
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're 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 Officer, 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 BST on 18 September 2025. Details of how to register for this
webcast are available at the following link:
https://www.renishaw.com/en/register-for-the-2025-full-year-results-webcast--49863
(https://www.renishaw.com/en/register-for-the-2025-full-year-results-webcast--49863)
Questions can be submitted during the webcast or in advance to
communications@renishaw.com (mailto:communications@renishaw.com) (if sending
by email, please submit by 09:30 BST on 18 September).
A recording of the Q&A session will be made available by 19 September 2025
at: www.renishaw.com/investors (https://www.renishaw.com/en/investors--22615)
.
Enquiries: communications@renishaw.com (mailto:communications@renishaw.com)
COMMENTARY BY THE CHIEF EXECUTIVE OFFICER
We achieved revenue of £713.0m boosted by the ongoing recovery in the
semiconductor market, with 3.1% annual growth at actual exchange rates
and underlying annual growth of 3.7% at constant currency*. Adjusted* profit
before tax of £127.2m was 3.8% higher than last year, while statutory
profit before tax of £118.0m was 3.7% lower.
We continued to see rising demand from the semiconductor manufacturing
equipment market for both our laser and optical encoder products,
and achieved steady progress in systems sales, with good growth for AGILITY
co-ordinate measuring machines (CMMs). Lower demand from the automotive sector
affected sales of our Industrial Metrology (IM) products. However,
opportunities in other sectors, including consumer electronics, helped offset
that weakness and highlighted the strength of having a business that serves
multiple sectors.
I would like to thank everyone at Renishaw for their resilience and commitment
to delivering business growth under challenging global conditions. I have been
impressed with their dedication and commitment to our purpose.
During the year, I have been fortunate to meet many of our teams - from those
involved in early-stage research to those working closely with our global
customers. I was constantly reminded of the importance of strong
relationships, and have particularly enjoyed meeting customers and hearing how
we have worked together over many years to help solve their challenges. This
has also been the first full year of our enhanced investor relations
programme, and I have found it illuminating to meet with many shareholders.
Their feedback is very helpful to the Board's strategic discussions.
As already communicated, Allen Roberts leaves Renishaw at the end of 2025.
Since I joined the Board in 2016, I have valued Allen's calm judgement, his
deep understanding of our operations and the integrity that he exhibits in his
approach to business. He has been invaluable to the Board, and I wish him the
enjoyable retirement that he fully deserves for his many years of commitment
to our Company.
Remembering Sir David McMurtry
This has been a year of deep sorrow for everyone at Renishaw following the
death of our co-founder, Sir David McMurtry, in December 2024. We held a
special event in July 2025 to celebrate his life and legacy, which highlighted
his immense contributions to aerospace, metrology and the automotive sector,
and as a private benefactor to his local community. Having worked closely with
Sir David during my Renishaw career, the values and approach to innovation
that he represented, and the ethos that he and John Deer, co-founder and
Non-executive Director, instilled in Renishaw, will continue to guide me
and the development of our business.
Group performance
Total revenue for the year was £713.0m, compared with £691.3m in FY2024.
Revenue at constant exchange rates, excluding the impact of forward
contracts, was £25.8m higher than the previous year.
At actual and constant currency rates we saw growth in our APAC region, with
growth in Manufacturing technologies revenue boosted by sales from the
Position Measurement (PM) product group. Despite continuing pricing pressures,
we saw good growth in China. While lower-cost competition is rising in the
region, we see opportunities in areas of the market that we do not currently
address, provided we supply products with the appropriate specification and
price. The Americas also saw growth at actual and constant currency rates,
with growth for our IM, PM and Neurological product groups. EMEA revenue was
flat, with growth in PM products, notably for laser encoders. This offset the
decline in Additive Manufacturing (AM) and IM revenue, with the latter seeing
particular weakness in machine tool sensors, affected by the automotive
sector.
Revenue for our Manufacturing technologies segment was £671.5m, representing
3.6% growth over the last year. IM was flat compared to last year, with mixed
performance for its product lines. While we saw revenue growth in our
metrology systems products, including AGILITY CMMs, revenue for sensors was
slightly lower than last year. Our systems products are benefiting from the
continuing trend in manufacturers integrating metrology on the shop floor to
provide real-time control of machining processes. The automotive market aside,
demand for metrology sensors is still growing in most sectors, demonstrating
the resilience of our business as we continue to benefit from the increasing
use of automation. PM revenue was higher, with growth in all product lines
boosted by demand from both the semiconductor sector - where AI has driven
demand for chips - and EV suppliers who are investing heavily in highly
automated battery manufacturing facilities. All our encoder products
are benefiting from the continuing rise in industrial automation and
robotics. While our AM revenue was lower, we enter the year with a good order
book in the Americas and EMEA. We continue to see demand from the aerospace
sector, due to AM's ability to manufacture complex parts and consolidate parts
to eliminate the need for assemblies. The medical/dental sector is another key
market due to AM's ability to make custom parts, and we saw increasing demand
in consumer electronics and defence, where AM supports the requirement for
fast-moving design iterations.
Our Analytical instruments and medical devices segment had a disappointing
year with revenue of £41.6m, which was 3.8% lower than FY2024. Revenue for
the Spectroscopy product line was lower but ended the year with a strong
order book. We are selling more of our newer products, which has helped
significantly increase sales for industrial applications. This has helped
offset national government reductions in research budgets, most notably in the
USA. An increasingly diverse customer base is also ensuring greater resilience
with less reliance on public sector research. Sales of our Neurological
products were higher, with growth for our neuromate surgical robot
compensating for the decline in sales in our drug delivery business, which we
have decided to close. The growth in robot sales was due to a mixture of new
sales, prompted by general growth in robotic surgery, and replacement sales
for older neuromate systems.
Adjusted profit before tax for the year was £127.2m (FY2024: £122.6m).
Adjusted* earnings per share was 137.8p (FY2024: 133.2p). Adjusted measures
are the ones the Board uses to measure our underlying trading performance.
Statutory profit before tax was £118.0m, (FY2024: £122.6m), leading to
Statutory earnings per share of 115.2p (FY2024: 133.2p). Statutory profit
after tax includes £13.2m of provisions relating to historical and
non-recurring tax matters, which are excluded from adjusted measures given
they do not represent underlying performance and we do not expect them to
recur, of which a £4.9m interest expense is included in statutory profit
before tax. For more details see the commentary by the Group Finance Director.
Our purpose and ambition drive our strategy
Our ambition as a manufacturing technology powerhouse is to continue our track
record of long-term organic growth in revenue and profitability, underpinned
by our purpose of Transforming Tomorrow Together. This drives us to work
closely with our customers to solve their problems with innovative products
that are delivered through world-class, in-house manufacturing and
global service.
We are targeting high single-digit average growth through the business cycles
that we face in our core markets, combined with Adjusted* operating profit
margins in excess of 20%. Our track record of through-cycle growth over
several decades, and the attractive opportunities we see from global trends,
such as digitalisation and industrial automation, give us confidence that we
can achieve these targets in the future.
As discussed at our Capital Markets Day in June 2025, we have various
initiatives underway to help us achieve our financial targets. These include
continuing to drive revenue growth through accelerated innovation and
improving operating margins through focused execution and productivity.
Our recent focus on improving returns from R&D expenditure is now being
realised, with some important new products launched in FY2025 and early FY2026
that will help drive future growth.
We are aiming to increase Adjusted operating profit from 15.7% to more than
20% by driving down costs in production, engineering, distribution and
administration as a percentage of revenue. We are in the process of
implementing an operating cost reduction programme, which aims to achieve
annualised labour cost savings of £20m through a voluntary and compulsory
redundancy programme. This was not a decision we made lightly, and I would
like to thank all those affected for their contributions to Renishaw.
Additional initiatives to help us achieve our targets include: automating more
of our manufacturing operations; greater prioritisation of R&D projects
and bringing products to market faster; developing software so that our
products require less field support; and implementing Microsoft Dynamics 365
to streamline customer transactions. We are also investing in AI software
tools to increase productivity in all areas of the business.
We are actively managing our business portfolio, taking the decision this year
to exit the loss-making drug delivery aspect of our Neurological business.
This will lead to an annual benefit in Group operating profit of around £3m
thereafter, and we continue to seek a new owner for the remaining
neurosurgical activities.
Effective 1 July 2025, we introduced three new reporting segments that are
more closely linked to end user markets and external demand drivers, and
better aligned with our evolving organisational structure. We believe this
will help investors better understand our business.
Making strategic progress for growth
We have also continued to make solid progress against our three strategic
focus areas:
1. growing our existing markets;
2. increasing the value to Renishaw of the technology that we sell; and
3. extending into new, high-growth markets.
These areas are integral to our long-term value creation model.
Growing our existing markets
We aim to increase revenue by driving up probe fitment levels, offering higher
value sensors, and winning more customers that build machinery. This requires
strong ongoing R&D investment to keep creating innovative products that
differentiate us from our competitors, and help us to make the most of new
opportunities as they arise. This year, that investment led to the
introduction of Opti-Logic technology in our twin probe system for machine
tools, making it faster and easier to set up using a smartphone app.
Our laser encoders were the best-performing product line in FY2025,
with strong demand for semiconductor wafer handling machinery applications.
We recently launched our next generation of laser encoders with improved
metrology performance and 'plug-and-play' functionality, making them easier
to install and service.
Increasing the value of the technology we sell
Our second strategic focus is designed to help us increase revenue by
providing our end user customers with complete solutions to capture a greater
proportion of their investment. This includes our AGILITY CMMs, which achieved
good growth this year.
We also launched the RenAM 500D dual laser AM machine, which when fitted with
our TEMPUS technology offers production speeds that are up to three times
faster than conventional single laser systems. We unveiled our new Equator-X
dual method gauging system and MODUS IM Equator software at this year's
Capital Markets Day, and will fully launch both at the EMO Hannover trade fair
in September 2025. Our software is part of the important MODUS IM family,
which will make our metrology systems products, such as Equator gauges, easier
to use and help reduce distribution costs, with less need for applications
support.
Extending into new, high-growth markets
Our third strategic focus is to diversify into close-adjacent markets where we
have strong market understanding and brand awareness. Here, we have launched
our new ASTRiA inductive encoder line, offering robust and accurate position
measurement in harsh environments, including robotics, defence and medical
devices. This is the first product we have developed using our new minimum
viable product (MVP) approach, which enables us to bring products to market
faster and gain confidence before committing more development costs.
Steady progress in our ESG strategy
In the first year of our new ESG strategy we have continued to make good
progress towards our target of Net Zero for Scope 1 and 2 emissions by 2028.
We reduced these by 13% versus FY2024, helped by the ongoing transition of
our global vehicle fleet to ultra-low emissions vehicles. Reducing our Scope 3
emissions remains challenging because we rely heavily on our supply chain to
find solutions. I am, therefore, pleased to see the progress our
sustainability and procurement teams made this year, working with our largest
metals supplier to develop a methodology to quantify their emissions. This
identified an opportunity to transition the majority of the aluminium we buy
from this supplier from 75% to 100% recycled content. This will enable us to
reduce the emissions intensity of the main aluminium products we buy. We are
now working with five other metals suppliers using the same methodology.
We continue to see significant commercial opportunities arising from
decarbonisation - one of the structural drivers that underpins our markets.
During the year, we focused particularly on improving the way we capture,
analyse and report on key data. This includes transitioning to more primary
data for Scope 3 emissions, and improving our internal data collection and
audit processes for Scope 1 and 2 emissions.
We also ran our second global employee engagement survey this year, with an
11% rise in responses. I was personally delighted to participate in the
first of our new listening group sessions, hearing first-hand what it's like
working in an engineering business for some of Renishaw's female employees,
as well as their ideas for attracting a more diverse workforce.
Outlook
There has been a steady start to FY2026 in line with our expectations.
Despite the continuing global uncertainty, the structural drivers that
underpin our markets are presenting growth opportunities across our businesses
and at this stage we are expecting to achieve further steady revenue growth
in the year ahead.
We are focused on achieving our financial targets over time of high
single-digit average through-cycle revenue growth and Adjusted operating
profit margins of 20%. We remain confident in our organic growth strategy
given the progress that we have again made against our three strategic focus
areas for growth, and we are excited by the revenue potential from recently
launched products. To improve our margins, we are continuing to invest
in our IT transformation and productivity improvements, and we are reducing
our fixed costs in relation to the size of the business, with clear targets
for production, engineering, distribution and administration costs.
The Board remains confident in our long-term sustainable growth model to drive
shareholder value. This is built on solving customer problems with innovative
products, global service and world-class in-house manufacturing.
Will Lee
Chief Executive Officer
*Note 29, Alternative performance measures, defines how each of these measures
is calculated.
COMMENTARY BY THE GROUP FINANCE DIRECTOR
FY2025 was a year of adjusted profit progress and record revenue in
challenging market conditions. While we have continued to experience cost
pressures, and are taking action to move us towards our operating margin
target, Adjusted* profit before tax increased by 3.8% to £127.2m (FY2024:
£122.6m).
We have exceeded our target for cash flow conversion and further strengthened
our financial position, with cash and cash equivalents and bank deposit
balances at the year end of £273.6m (30 June 2024: £217.8m). This includes
our planned reduction in capital expenditure this year, as we now look to
benefit from recent investments made in manufacturing infrastructure.
Although we face global political and economic uncertainties, we are well
positioned for future growth opportunities and unexpected market downturns.
Financial performance
Revenue
As Will has explained in his review, we achieved 3.1% growth in revenue to
£713.0m (FY2024: £691.3m) and so have again achieved record revenue. We
continue to benefit from being diversified across a range of markets; while
the automotive market was weaker, the semiconductor and defence markets were
positive, and we also saw good growth in our metrology systems products
including AGILITY CMMs.
With 20% of our revenue coming from the USA, and our manufacturing located in
the UK, Ireland and India, we have been closely monitoring and managing the
impact of the US Government's tariff changes during the year. While we
experienced some net costs when the tariffs came into effect, we have since
been able to mitigate them with surcharges.
At constant exchange rates*, revenue would have been 3.7% higher than the
previous year. This is mostly as a result of an appreciation of GBP relative
to USD, from an average of 1.26 in FY2024 to 1.30 in FY2025. The effect of
currency has been partly mitigated by our treasury strategy; without
our forward cash flow hedging contracts, revenue would have increased by
0.4%.
Operating costs
We introduced our Adjusted operating profit margin key performance indicator
(KPI) last year, with our target of 20%. While we have achieved a margin of
15.7% this year, the same as the previous year, we have undertaken cost
initiatives to help move us to this target in the medium term, along with our
revenue growth strategy.
Managing our labour costs has continued to be a priority this year, as we
target the right balance of rewarding and motivating existing staff, bringing
in new people where needed, and generating value for shareholders. We
increased salaries by an average (globally) of 4.2% from January 2025 and had
a net average headcount increase of 126, resulting in an increase in total
payroll costs of £18.2m, or 6.3%. External factors have also been a
significant consideration this year, with National Insurance rises in the UK
increasing our costs by £1.0m in FY2025, and around £4.0m per year going
forward.
In light of these cost pressures, and our expectations of growth, we made the
difficult decision in June to initiate a redundancy programme to achieve £20m
of annualised savings. This was initially a voluntary programme, with a
compulsory programme following in July, mostly affecting people in the UK,
Ireland and the EMEA region. Redundancy costs of around £16m will
be recognised in FY2026, and excluded from adjusted profit and earnings
measures.
Other efforts to improve our operating margin include investments in our
manufacturing and logistics facilities, with new machine tools, robots and
automated warehousing. These have helped improve this year's gross margin
(excluding engineering costs) as a percentage of revenue to 61.7%, compared
with 61.0% last year, and will benefit our future margin. We should also see
economies of scale in producing our AGILITY CMMs and AM machines
as we expand within our existing factory footprint. While we continue to
experience pricing pressures globally, we have generally maintained our net
pricing with customers, and we intend to make targeted price rises in the
coming year.
Our core strategy remains to deliver organic growth by developing innovative
and patented products, and we have reviewed our priorities during the year to
improve our focus and reduce our time to market. This review has resulted in
the closure of the drug delivery aspect of our Neurological business and
a research facility in Edinburgh, resulting in one-off costs of £2.1m and
£2.3m respectively. These are included in the 12% increase in our gross
engineering expenditure of £120.1m (FY2024: £106.8m), but treated as
adjusting items, and are expected to lead to an annualised increase in
operating profit of around £4m.
We're also implementing a new global ERP system and a new e-commerce platform,
which will make many of our sales, distribution and finance processes more
efficient. While this has meant higher software and consultancy costs in
recent years, we expect this investment to streamline customer interactions
and improve productivity in the future.
Profit and tax
Adjusted* operating profit was 3.3% higher this year at £112.3m (FY2024:
£108.7m). At constant exchange rates*, Adjusted operating profit would have
been 1.2% higher than last year.
Adjusted* operating profit in our Manufacturing technologies segment was
£109.9m, compared with £103.2m last year. In our Analytical instruments and
medical devices segment, Adjusted* operating profit was £2.4m, compared with
£5.5m last year.
To reflect our evolving organisational structure we will be reporting on
three segments from FY2026: Industrial Metrology, Position Measurement, and
Specialised Technologies.
Financial income, net of financial expenses, for the year was £6.6m, compared
with £10.0m last year. This includes a £2.6m increase in interest on bank
deposits due to higher interest rates and amounts on deposit, less £4.9m of
interest payable on historical tax matters. See Note 5 for a full analysis.
Adjusted profit before tax was £127.2m, compared with £122.6m in FY2024.
Statutory profit before tax was £118.0m, compared with £122.6m in the
previous year.
The FY2025 effective tax rate has increased to 29.0% (FY2024: 21.0%) mostly as
a result of historical and non-recurring tax matters and the new global
minimum tax. The underlying effective tax rate, excluding these items, is
similar to the previous year. Tax matters of £9.1m relate to specific legacy
arrangements which we wouldn't expect to recur. While applicable accounting
standards require a full provision for tax and the associated interest of
£4.9m we continue to seek resolution to these matters which would reduce
these amounts.
Certain infrequent events can sometimes affect our financial statements,
prepared according to applicable International Financial Reporting Standards.
We exclude these events from adjusted profit and earnings measures to give the
Board and other stakeholders another useful metric to understand and compare
our underlying performance. This year, we have excluded costs relating to the
closure of our Edinburgh research facility (£2.3m), the drug delivery aspect
of our Neurological business (£2.1m), and historical and non-recurring tax
matters (£9.1m tax and £4.9m interest) from Adjusted profit measures, which
are detailed in Note 29.
Earnings per share
Adjusted* earnings per share is 137.8p (FY2024: 133.2p), while Statutory
earnings per share is 115.2p (FY2024: 133.2p).
Financial position
As noted earlier, we reduced our capital expenditure this year, with additions
to property, plant and equipment of £46.3m (FY2024: £65.2m). This largely
relates to manufacturing equipment at our Miskin facility in Wales, UK,
following completion of its expansion in the previous year. This project
has significantly increased our global manufacturing floorspace, allowing for
our expected future growth.
Looking next at intangible assets, our strategic focus on fewer but more
significant research projects resulted in £10.0m of additions to capitalised
development costs (FY2024: £9.3m). The decision to close our drug delivery
business and stop several other projects led to a £1.8m impairment.
In working capital, we've continued to focus on our inventory holding
requirements, with inventory at 30 June 2025 totalling £159.5m, which is a
£2.5m reduction on the previous year. Trade receivables decreased from
£134.1m to £128.5m, mostly due to currency translation. With good
credit management practices across the Group, we continue to experience low
levels of defaults, and hold a provision for expected credit losses at 0.5%
of trade receivables (FY2024: 0.5%).
While our tax charge increased by £8.5m year on year, our net current tax
position has reduced by £24.4m. This is mainly due to tax receipts in the UK
during the year, from £14.6m of overpayments in the previous two years, and
R&D tax credits. Excluding these receipts, our tax payments would have
been £20.8m, which is similar to the previous year.
Our defined benefit pension schemes (including reimbursement right) had a net
surplus of £3.2m at the end of the year, compared with £1.6m at 30 June
2024. With a buy-in of the UK scheme completed last year, we expect future
movements not to be material.
An error was identified in the year with the Group's classification of a
German pension scheme as a defined contribution scheme, as opposed to a
defined benefit scheme. In line with IAS 8, the Group has restated balances as
at 30 June 2024 and 1 July 2023. The balance at 30 June 2025 for the
non-current liability employee benefit and reimbursement right asset were
£21.1m and £12.9m respectively, see note 1 and 23 for further details.
Total equity at the end of the year was £925.9m, compared with £896.3m at 30
June 2024. This is primarily a result of profit for the year of £83.8m, less
dividends paid of £55.4m.
Cash flow, liquidity and treasury management
We continue to have a strong liquidity position, with cash and cash
equivalents and bank deposit balances at 30 June 2025 of £273.6m (30 June
2024: £217.8m). This is a result of our cash flows from operating activities
of £147.9m (FY2024: £124.1m), partly offset by our previously noted capital
investments, and dividends paid of £55.4m.
We introduced Adjusted cash flow conversion from operating activities* as a
KPI last year, which assesses our efficiency at converting operating profit
into cash. Given lower capital expenditure of £46.3m (FY2024: £65.5m) and
higher working capital inflows of £9.1m (FY2024: £3.9m), we achieved 91%
this year (FY2024: 70%), above our target of 70%.
We have significant exposure to currency movements, and we use forward
exchange contracts to help mitigate this in two areas. We hedge against a
proportion of our anticipated Euro, US Dollar and Japanese Yen cash inflows
over a two-year period, where our forward rate cap policy allows. We also use
contracts to offset movements in intercompany financing balances in these
three same currencies, and Canadian Dollars. While this mitigates short-term
volatility relating to foreign currency movements, this doesn't mitigate our
exposure to longer-term structural changes in exchange rates. We do not
speculate with derivative financial instruments.
Our treasury management also seeks to ensure that appropriate and dynamic
funding arrangements are available for each of our companies, and that we
maximise interest income on our cash and bank deposits.
Capital allocation
Our priorities in allocating capital are to maintain a strong financial
position, generate cash to invest in organic growth, and provide regular
returns to shareholders. We continue to commit to R&D investment in new
products and processes, and to investments in our infrastructure.
While climate change and our own Net Zero targets aren't expected to have a
material effect on revenue and profit in our five-year financial plan, we do
expect to continue to invest in the capital expenditure needed to achieve
these targets.
We continue to value having cash in the bank to protect our business,
recognising that we are exposed to some volatile markets. We monitor our cash
against a minimum holding requirement according to overheads and revenue
downturn scenarios. This cash also allows us to react swiftly as investment or
market capture opportunities arise.
We introduced Return on invested capital* as a new KPI last year, which
assesses our efficiency in allocating capital to profitable investments. We
achieved 12.6% this year, a small improvement on last year (FY2024: 12.3%).
We expect to drive this metric towards our target of 15% with higher profits
and lower levels of future capital expenditure.
We have a progressive dividend policy, aiming to increase the dividend per
share while maintaining a prudent level of dividend cover. This year we paid
an interim dividend of 16.8p per share (FY2024: 16.8p) and are proposing a
final dividend of 61.3p per share (FY2024: 59.4p), resulting in a total
dividend for the year of 78.1p per share, a 2.5% increase on the previous
year.
Looking forward
We remain focused on our revenue growth and operating margin targets. There
are good opportunities to increase revenue in existing markets and to extend
into new markets, building on three years of successive revenue growth.
Alongside this, we are improving operating margins by reducing our fixed costs
in relation to our revenue and investing in our infrastructure and systems.
Allen Roberts
Group Finance Director
*Note 29, 'Alternative performance measures', defines how each of these
measures is calculated.
Principal risks and uncertainties
Our performance is subject to a number of risks - the principal risks, factors
impacting on them and mitigations are listed in the table below, as well as an
indication of the movement of the risk in the last year, our appetite towards
that risk, and how the risk links to our strategy. The Board has conducted a
robust assessment of the principal risks facing the business.
Velocity Appetite
Very Low Very slow impact, response time adequate to mitigate effects Very Low Following a marginal-risk, marginal-reward approach that represents the safest
strategic route available.
Low Slow impact, robust response to strategy may mitigate effects Low Seeking to integrate sufficient control and mitigation methods in order to
accommodate a low level of risk, though this will also limit reward
potential.
Medium Moderate time to impact, swift and robust response may mitigate effects Balanced An approach that brings a high chance of success, considering the risks,
along with reasonable rewards, economic and otherwise.
High Fast impact, immediate response may mitigate effects High Willing to consider bolder opportunities with higher levels of risk in
exchange for increased business payoffs.
Very High Very rapid impact with little or no warning. No time to respond and mitigate Very High Pursuing high-risk, unproven options that carry with them the potential for
effects high-level rewards.
Link to strategy:
- G: Growth in existing markets
- I: Increasing technology value
- E: Extending into new markets
Geopolitical uncertainty (formerly Economic and political uncertainty)
Velocity Risk description
High We are unable or slow to respond to geopolitical changes that may impact the
delivery of our growth plans.
Appetite
Balanced
Link to strategy
All
Risk owner
Chief Executive Officer
Potential impact W
h
· Reduced addressable market. a
t
· Increased sales concentration in fewer regions. w
e
· Capital losses from stranded assets. a
r
· Reputational damage if key markets become inaccessible. e
d
· Reduced margins or competitiveness. o
i
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Velocity Risk description
Medium We are disrupted by emerging rivals who offer comparable products for lower
prices in our markets, leading to margin erosion and market share loss.
Appetite
Balanced
Link to strategy
G, I
Risk owners
Chief Executive
Officer
Potential impact W
h
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opportunity to expand into new market segments. e
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Product innovation (formerly Innovation strategy)
Velocity Risk description
Medium Failure to develop our competitive position and derive value from our
investment in product innovation.
Appetite
HIGH
Link to strategy
All
Risk owner
Chief Executive Officer
Potential impact W
h
· Failure to lead the market with innovative products in our core and a
adjacent sectors. t
w
· Gradual loss of market share. e
a
· Reduced revenue, profit and cash generation. r
e
· Inability to differentiate ourselves from our competitors. d
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n
s
i
g
h
t
m
o
n
i
t
o
r
i
n
g
w
i
t
h
m
a
t
e
r
i
a
l
u
p
d
a
t
e
s
s
h
a
r
e
d
w
i
t
h
t
h
e
E
x
e
c
u
t
i
v
e
C
o
m
m
i
t
t
e
e
.
Industry fluctuations
Velocity Risk description
High We fail to respond in an agile manner to industry fluctuations in demand,
leading to erosion of market position and customer relationships (in an
upturn), and margins (in a downturn).
Appetite
Balanced
Link to strategy
G, I
Risk owner
Chief Executive Officer
Potential impact W
h
· Loss of market share. a
t
· Erosion of customer relationships. w
e
· Restriction on long-term growth. a
r
· Reduced revenue, profit and cash generation. e
d
o
i
n
g
t
o
m
a
n
a
g
e
t
h
i
s
r
i
s
k
·
O
n
g
o
i
n
g
r
e
v
i
e
w
o
f
g
e
o
p
o
l
i
t
i
c
a
l
c
h
a
n
g
e
s
,
i
n
d
u
s
t
r
y
d
e
m
a
n
d
c
y
c
l
e
f
o
r
e
c
a
s
t
i
n
g
,
a
n
d
b
u
s
i
n
e
s
s
d
e
v
e
l
o
p
m
e
n
t
o
p
p
o
r
t
u
n
i
t
i
e
s
.
·
I
n
d
u
s
t
r
y
t
r
e
n
d
m
o
n
i
t
o
r
i
n
g
,
i
n
c
l
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d
i
n
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m
o
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t
h
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y
r
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v
i
e
w
o
f
e
x
t
e
r
n
a
l
l
y
p
u
b
l
i
s
h
e
d
r
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p
o
r
t
s
o
f
c
a
p
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t
a
l
e
x
p
e
n
d
i
t
u
r
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f
o
r
e
c
a
s
t
s
i
n
k
e
y
m
a
r
k
e
t
s
.
·
I
n
v
e
s
t
m
e
n
t
i
n
m
a
n
u
f
a
c
t
u
r
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n
g
a
n
d
l
o
g
i
s
t
i
c
s
-
f
l
e
x
i
b
l
e
a
u
t
o
m
a
t
i
o
n
t
o
r
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d
u
c
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t
h
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n
e
e
d
f
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r
a
d
d
i
t
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o
n
a
l
d
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r
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c
t
m
a
n
u
f
a
c
t
u
r
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n
g
l
a
b
o
u
r
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o
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u
p
p
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t
h
i
g
h
e
r
c
u
s
t
o
m
e
r
d
e
m
a
n
d
.
·
R
e
p
l
a
c
i
n
g
l
e
g
a
c
y
p
r
o
d
u
c
t
s
t
h
a
t
a
r
e
l
a
b
o
u
r
-
i
n
t
e
n
s
i
v
e
t
o
m
a
n
u
f
a
c
t
u
r
e
i
n
f
a
v
o
u
r
o
f
n
e
w
e
r
p
r
o
d
u
c
t
s
w
i
t
h
m
o
r
e
a
u
t
o
m
a
t
e
d
p
r
o
d
u
c
t
i
o
n
p
r
o
c
e
s
s
e
s
.
·
P
r
o
d
u
c
t
i
o
n
p
l
a
n
n
i
n
g
p
r
o
c
e
s
s
i
n
f
o
r
m
e
d
b
y
a
c
o
m
b
i
n
a
t
i
o
n
o
f
h
i
s
t
o
r
i
c
p
r
o
d
u
c
t
m
i
x
,
m
a
r
k
e
t
d
e
m
a
n
d
f
o
r
e
c
a
s
t
i
n
g
a
n
d
s
t
o
c
k
l
e
v
e
l
s
i
n
r
e
l
a
t
i
o
n
t
o
i
n
v
e
n
t
o
r
y
p
o
l
i
c
y
.
·
S
e
c
u
r
i
n
g
r
e
c
u
r
r
i
n
g
r
e
v
e
n
u
e
s
t
r
e
a
m
s
f
r
o
m
a
f
t
e
r
-
m
a
r
k
e
t
s
e
r
v
i
c
e
s
a
n
d
s
u
b
s
c
r
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p
t
i
o
n
s
o
f
t
w
a
r
e
s
a
l
e
s
.
Non-compliance with laws and regulations
Velocity Risk description
High Failure to comply with applicable laws and regulations could result in
criminal or civil liabilities for the Company and its employees, thereby
damaging our reputation. It could also result in a breach of other contracts,
including insurance and banking arrangements, hampering our ability to
Appetite operate.
LOW
Link to strategy
All
Risk owner
Group General Counsel & Company Secretary
Potential impact W
h
· Potential penalties and fines, and cost of investigations. a
t
· Damage to reputation and loss of future business. w
e
· Management time and attention diverted to deal with reports of a
non-compliance. r
e
· Inability to attract and retain talent. d
o
i
n
g
t
o
m
a
n
a
g
e
t
h
i
s
r
i
s
k
·
E
s
t
a
b
l
i
s
h
e
d
c
o
n
f
i
d
e
n
t
i
a
l
w
h
i
s
t
l
e
b
l
o
w
i
n
g
l
i
n
e
,
S
p
e
a
k
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p
,
w
h
i
c
h
i
s
a
v
a
i
l
a
b
l
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f
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r
w
h
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w
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f
o
r
c
e
i
n
m
u
l
t
i
p
l
e
l
a
n
g
u
a
g
e
s
.
·
V
a
r
i
o
u
s
p
o
l
i
c
i
e
s
a
n
d
e
-
l
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a
r
n
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g
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o
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c
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a
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t
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r
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b
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r
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d
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p
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p
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l
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c
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c
o
m
p
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t
i
t
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o
n
l
a
w
,
h
e
a
l
t
h
a
n
d
s
a
f
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t
y
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a
n
d
a
n
t
i
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f
a
c
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l
i
t
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t
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o
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f
t
a
x
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v
a
s
i
o
n
.
·
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n
d
u
c
t
i
o
n
t
r
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i
n
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g
a
n
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m
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d
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a
n
n
u
a
l
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r
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n
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n
g
a
c
r
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s
s
v
a
r
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o
u
s
f
u
n
c
t
i
o
n
s
.
·
U
p
g
r
a
d
e
d
s
a
n
c
t
i
o
n
s
s
c
r
e
e
n
i
n
g
p
r
o
c
e
s
s
e
s
.
·
L
a
u
n
c
h
e
d
o
u
r
C
o
d
e
o
f
C
o
n
d
u
c
t
i
n
2
0
2
4
.
·
R
e
c
r
u
i
t
m
e
n
t
a
n
d
o
n
b
o
a
r
d
i
n
g
o
f
d
e
d
i
c
a
t
e
d
c
o
m
p
l
i
a
n
c
e
p
r
o
f
e
s
s
i
o
n
a
l
s
.
Capital products growth
Velocity Risk description
Medium We do not successfully adapt our sales and manufacturing processes to meet the
profit targets of our capital goods businesses.
Appetite
Balanced
Link to strategy
I
Risk owner
Chief Executive Officer
Potential impact P
o
· Low capital efficiency - high people costs and low productivity. t
e
· High engineering and distribution costs. n
t
· Adverse impact on customer satisfaction levels, revenue and i
profits. a
l
· Slowdown in long-term growth. i
m
· Failure to gain share in substantial, growing markets. p
a
· Failure to recover investment in R&D. c
t
·
A
p
p
r
o
p
r
i
a
t
e
l
y
s
k
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p
e
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t
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t
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a
l
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a
v
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d
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t
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s
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m
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t
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e
a
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r
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c
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s
t
p
e
r
s
a
l
e
.
·
B
i
d
m
a
n
a
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m
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t
a
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d
c
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n
t
r
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t
a
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d
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d
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a
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d
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t
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c
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p
r
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a
t
e
.
·
P
r
o
j
e
c
t
m
a
n
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m
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t
p
r
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s
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l
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g
a
n
d
d
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l
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v
e
r
y
o
f
c
o
m
p
l
e
x
s
y
s
t
e
m
s
.
·
P
r
o
m
o
t
i
n
g
s
e
r
v
i
c
e
c
o
n
t
r
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c
t
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d
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t
w
a
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b
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c
r
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p
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t
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d
r
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v
e
r
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c
u
r
r
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n
g
r
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v
e
n
u
e
s
.
·
L
o
c
a
l
s
o
l
u
t
i
o
n
s
f
o
r
m
a
i
n
t
e
n
a
n
c
e
o
f
c
o
m
p
l
e
x
p
r
o
d
u
c
t
c
o
n
f
i
g
u
r
a
t
i
o
n
s
a
n
d
s
e
r
v
i
c
i
n
g
s
t
a
t
u
s
.
·
F
i
n
a
n
c
i
n
g
l
e
a
s
e
s
c
h
e
m
e
s
o
f
f
e
r
e
d
.
Cyber
Velocity Risk description
High Cyber-attacks against our business are increasing in number, complexity, and
the degree to which they are personally targeting Renishaw and our employees.
We continue to face other data security threats. A successful cyber-attack or
a significant data loss could severely affect our ability to operate, or lead
Appetite to the loss of personal and commercially sensitive data and expose us to
reputational and financial damage.
Low
Link to strategy
All
Risk owner
Group Operations Director
Potential impact W
h
· Inability to operate normal processes for a potentially significant a
period. t
w
· Loss of intellectual property and/or commercially sensitive and/or e
personal data. a
r
· Financial loss and reputational damage. e
d
· Reduced customer service. o
i
· Diversion of management time and an impact on business n
decision-making. g
t
o
m
a
n
a
g
e
t
h
i
s
r
i
s
k
·
V
a
r
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s
t
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l
s
d
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p
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e
d
t
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m
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n
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t
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r
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d
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c
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r
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t
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m
s
,
i
n
c
l
u
d
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m
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v
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r
(
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s
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)
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.
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d
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p
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t
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s
v
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a
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t
.
·
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m
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g
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p
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r
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t
y
.
·
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h
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r
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b
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r
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d
u
a
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p
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r
s
y
s
t
e
m
s
.
·
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Exchange rates (formerly Exchange rate fluctuations)
Velocity Risk description
Medium Exchange rate fluctuations can impact our Consolidated income statement,
balance sheet and cash flow, affecting near-term management, investor
reporting and planning, and long-term performance.
Appetite
Balanced
Link to strategy
G, I
Risk owners
Group Finance Director
Potential impact What we are doing to manage this risk
· Significant variations in profit. · Subsidiary overheads and some manufacturing purchases
denominated/made in foreign currencies.
· Reduced cash generation.
· Maintaining rolling forward contracts for cash-flow hedges in
· Increased competition on product prices. accordance with Board-approved policy, and one-month forward contracts to
manage risks on intercompany balances.
· Increased costs.
· Agreed caps for each currency pairing, i.e. rates at which we will
· Adverse impact on management decision-making. not trade if prevailing forward rates are in excess of, to mitigate
short-term exchange rate spikes.
· A panel of partner banks provides competitive forward contract
pricing and advice on managing our exposure.
IT transformation (formerly IT transformation failure)
Velocity Risk description
Medium We fail to successfully implement Microsoft Dynamics 365 ahead of Sage
obsolescence or with the anticipated productivity benefits. Technical issues
or poor integration with existing systems could negatively affect our ability
to operate and could mean that we do not realise productivity aspirations,
Appetite leading to manual intervention and slowing us down.
LOW
Link to strategy
All
Risk owner
Group Operations Director
Potential impact What we are doing to manage this risk
· Major systems disruption causing operational delays. · Developing robust methodology, processes and tools to be able to
scale up deployments that we can use across the Group.
· Delays in processing or issuing invoices and customer orders, or
in procuring goods and services. · Targeted recruitment of independent Microsoft Dynamics 365
expertise.
· Increased costs, including costs to fix technical issues and
restore or upgrade other affected systems. · Regular internal project meetings are held, and a steering
committee has been established.
· Regular contact with Microsoft and our system integrator.
· Strong central accountability, including deployment strategies and
data migration criteria, allowing for one solution for all subsidiaries.
· Group Operations Director appointed as our designated responsible
individual, providing clear responsibility for accelerating difficult
decisions.
People
Velocity Risk description
Medium If we fail to retain and develop a diverse, engaged workforce with the right
talent and skills, our succession and leadership pipelines will weaken,
ultimately affecting our ability to achieve strategic objectives. It is also
essential that our people align with our core values, to foster the desired
Appetite conduct and behaviours that drive success.
Balanced
Link to strategy
All
Risk owner
Group Human Resources Director
Potential impact What we are doing to manage this risk
· Delays in product delivery and ability to deliver strategic · Continuing to focus on attracting, rewarding and retaining our
objectives because of loss of expertise and specialist talent. people globally. This includes building a more inclusive working environment
as part of our ESG strategy.
· Loss of innovative edge because of insufficient diversity.
· Using the results of our global employee engagement surveys to
· Failure to develop future leaders and insufficient talent inform our people strategy.
progression to support Renishaw's future.
· Continuing to invest in our education outreach and early careers
· Loss of market share, reduced revenue, poor customer service and programmes, talent development and succession planning.
reduced profit.
· Identifying and implementing functional competencies for all roles,
· Reputational damage and increase in attrition rates because of a serving as vital building blocks for comprehensive career development
failure to uphold ethical standards and behaviours. frameworks.
· Capturing employee skills within our Human Resources Management
System, which enables the formation of dynamic talent pools, targeted
development opportunities and robust succession planning. These talent pools
allow us to use nine-box talent mapping effectively.
· Promoting our ESG strategy to help attract and retain a diverse
pool of talent within the business.
· Implementing and embedding policies that will help foster a culture
where ethical conduct is ingrained and aligned with our values. This alignment
helps strengthen trust, foster inclusivity and ensure long-term
sustainability.
CONSOLIDATED INCOME STATEMENT
for the year ended 30 June 2025
Adjusted total 2025 Adjusting items 2025 Statutory total 2025 Adjusted total 2024 Adjusting items 2024 Statutory total 2024
from continuing operations notes £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2 713,044 - 713,044 691,301 - 691,301
Cost of sales 4 (379,650) (4,379) (384,029) (367,658) - (367,658)
Gross profit 333,394 (4,379) 329,015 323,643 - 323,643
Distribution costs (144,031) - (144,031) (139,901) - (139,901)
Administrative expenses (77,099) - (77,099) (75,075) - (75,075)
Operating profit 112,264 (4,379) 107,885 108,667 - 108,667
Financial income 5 16,517 - 16,517 12,336 - 12,336
Financial expenses 5 (5,088) (4,852) (9,940) (2,289) - (2,289)
Share of profits of joint ventures 13 3,538 - 3,538 3,880 - 3,880
Profit before tax 127,231 (9,231) 118,000 122,594 - 122,594
Income tax expense 7 (27,010) (7,233) (34,243) (25,705) - (25,705)
Profit for the year 100,221 (16,464) 83,757 96,889 - 96,889
Profit attributable to:
Equity shareholders of the parent company 83,757 96,889
Non-controlling interest 26 - -
Profit for the year 83,757 96,889
pence pence pence pence Pence pence
Dividend per share arising in respect of the year 26 78.1 76.2
Dividend per share paid in the year 26 76.2 76.2
Earnings per share (basic and diluted) 8 137.8 (22.1) 115.2 133.2 - 133.2
See Note 29 Alternative performance measures for more details on Adjusting
items.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE
for the year ended 30 June 2025
Adjusted total Adjusting items 2025 Statutory total 2025 Adjusted total Adjusting items 2024 Statutory total 2024
2025 2024 (restated) (restated)
(restated)
notes £'000 £'000 £'000 £'000 £'000 £'000
Profit for the year 100,221 (16,464) 83,757 96,889 - 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 23 2,777 - 2,777 (48,776) - (48,776)
assets/liabilities/reimbursement right
Deferred tax on remeasurement of defined benefit pension scheme (374) - (374) 12,450 - 12,450
assets/liabilities/reimbursement right
Total for items that will not be reclassified 2,403 - 2,403 (36,326) - (36,326)
Items that may be reclassified to the Consolidated income statement:
Exchange differences in translation of overseas operations 26 (6,295) - (6,295) (4,038) - (4,038)
Exchange differences in translation of overseas joint venture 26 169 - 169 (311) - (311)
Current tax on translation of net investments in overseas operations 26 - - - 57 - 57
Effective portion of changes in fair value of cash flow hedges, net of 26 5,804 - 5,804 5,812 - 5,812
recycling
Deferred tax on effective portion of changes in fair value of cash flow hedges 7,26 (1,451) - (1,451) (1,453) - (1,453)
Total for items that may be reclassified (1,773) - (1,773) 67 - 67
Total other comprehensive income and expense, net of tax 630 - 630 (36,259) - (36,259)
Total comprehensive income and expense for the year 100,851 (16,464) 84,387 60,630 - 60,630
Attributable to:
Equity shareholders of the parent company 84,387 60,630
Non-controlling interest 26 - -
Total comprehensive income and expense for the year 84,387 60,630
'Remeasurement of defined benefit pension scheme
assets/liabilities/reimbursement right' and 'Deferred tax on remeasurement
of defined benefit pension scheme assets/liabilities/reimbursement right'
have been restated in the comparative information. See Note 1 for further
details.
CONSOLIDATED BALANCE SHEET
at 30 June 2025
2024 2023
2025 (restated) (restated)
notes £'000 £'000 £'000
Assets
Property, plant and equipment 9 338,287 325,040 286,085
Right-of-use assets 10 12,218 14,746 8,402
Investment properties 11 11,566 10,285 10,323
Intangible assets 12 50,550 47,343 46,468
Investments in joint ventures 13 27,692 25,485 22,414
Finance lease receivables 14 11,950 11,944 9,935
Employee benefits 23 11,443 10,845 57,416
Reimbursement right 23 12,909 12,116 11,348
Deferred tax assets 7 22,432 20,367 22,595
Derivatives 25 7,878 1,387 9,443
Total non-current assets 506,925 479,558 484,429
Current assets
Inventories 16 159,465 161,928 185,757
Trade receivables 25 128,464 134,073 123,427
Finance lease receivables 14 5,195 3,861 3,764
Current tax 6,453 21,298 19,558
Other receivables 25 40,732 34,076 28,840
Derivatives 25 14,345 13,547 5,373
Bank deposits 15,25 186,226 95,542 125,000
Cash and cash equivalents 15,25 87,420 122,293 81,388
Total current assets 628,300 586,618 573,107
Current liabilities
Trade payables 25 25,943 21,330 21,551
Contract liabilities 18 14,669 10,880 9,971
Current tax 11,303 1,767 7,118
Provisions 17 8,978 2,997 2,758
Derivatives 25 150 448 5,089
Lease liabilities 21 3,992 3,960 3,009
Amount payable to joint venture 13 14,530 8,475 -
Borrowings 20 764 747 4,694
Other payables 19 57,132 50,344 48,130
Total current liabilities 137,461 100,948 102,320
Net current assets 490,839 485,670 470,787
Non-current liabilities
Lease liabilities 21 8,769 11,062 5,624
Borrowings 20 2,120 2,775 -
Employee benefits 23 21,131 21,349 20,538
Deferred tax liabilities 7 38,784 33,600 38,770
Derivatives 25 1,096 177 120
Total non-current liabilities 71,900 68,963 65,052
Total assets less total liabilities 925,864 896,265 890,164
Equity
Share capital 26 14,558 14,558 14,558
Share premium 42 42 42
Own shares held 26 (2,140) (2,963) (2,963)
Currency translation reserve 26 (3,646) 2,480 6,772
Cash flow hedging reserve 26 15,264 10,911 6,552
Retained earnings 901,170 870,434 865,283
Other reserve 26 1,193 1,380 497
Equity attributable to the shareholders of the parent company 926,441 896,842 890,741
Non-controlling interest 26 (577) (577) (577)
Total equity 925,864 896,265 890,164
Reimbursement right, Employee benefits, Deferred tax assets and retained
earnings have been restated in the comparative information. See Note 1 for
further details.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2025
Cash
Own Currency flow Non-
Share Share Shares translation hedging Retained Other controlling
capital premium Held reserve reserve earnings reserve interest Total
Year ended 30 June 2024 £'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
Prior year restatement - - - - - (6,494) - - (6,494)
Balance at 1 July 2023 (restated) 14,558 42 (2,963) 6,772 6,552 865,283 497 (577) 890,164
Profit for the year - - - - - 96,889 - - 96,889
Other comprehensive income and expense (net of tax)
Remeasurement of defined benefit pension scheme - - - - - (36,326) - - (36,326)
assets/liabilities/reimbursement right
Foreign exchange translation differences - - - (3,981) - - - - (3,981)
Foreign exchange related to joint venture - - - (311) - - - - (311)
Changes in fair value of cash flow hedges - - - - 4,359 - - - 4,359
Total other comprehensive income and expense - - - (4,292) 4,359 (36,326) - - (36,259)
Total comprehensive income and expense - - - (4,292) 4,359 60,563 - - 60,630
Share-based payments charge - - - - - - 883 - 883
Dividends paid - - - - - (55,412) - - (55,412)
Balance at 30 June 2024 14,558 42 (2,963) 2,480 10,911 870,434 1,380 (577) 896,265
Year ended 30 June 2025
Profit for the year - - - - - 83,757 - - 83,757
Other comprehensive income and expense (net of tax)
Remeasurement of defined benefit pension scheme - - - - - 2,403 - - 2,403
assets/liabilities/reimbursement right
Foreign exchange translation differences - - - (6,295) - - - - (6,295)
Foreign exchange related to joint venture - - - 169 - - - - 169
Changes in fair value of cash flow hedges - - - - 4,353 - - - 4,353
Total other comprehensive income and expense - - - (6,126) 4,353 2,403 - - 630
Total comprehensive income and expense - - - (6,126) 4,353 86,160 - - 84,387
Share-based payments charge - - - - - - 790 - 790
Distribution of own shares - - 977 - - - (977) - -
Purchase of own shares - - (154) - - - - - (154)
Dividends paid - - - - - (55,424) - - (55,424)
Balance at 30 June 2025 14,558 42 (2,140) (3,646) 15,264 901,170 1,193 (577) 925,864
More details of share capital and reserves are given in Note 26.
'Remeasurement of defined benefit pension scheme
assets/liabilities/reimbursement right' have been restated in the comparative
information. See Note 1 for further details.
CONSOLIDATED STATEMENT OF CASH FLOW
for the year ended 30 June 2025
2025 2024
notes £'000 £'000
Cash flows from operating activities
Profit for the year 83,757 96,889
Adjustments for:
Depreciation and impairment of property, plant and equipment, right-of-use 9,10,11 29,057 24,195
assets, and investment properties
Profit on sale of property, plant and equipment 9 (1,083) (1,199)
Amortisation and impairment of intangible assets 12 6,689 8,633
Share of profits from joint ventures 13 (3,538) (3,880)
Defined benefit pension schemes past service and administrative costs 23 1,833 907
Financial income 5 (16,517) (12,336)
Financial expenses 5 9,940 2,289
Share-based payment expense 24 790 883
Tax expense 7 34,243 25,705
61,414 45,197
Decrease/(increase) in inventories 2,463 23,829
Increase in trade, finance lease and other receivables (11,025) (23,719)
Increase/(decrease) in trade and other payables 16,525 3,557
Increase/(decrease) in provisions 1,129 239
9,094 3,906
Defined benefit pension scheme contributions 23 (162) (161)
Income taxes paid (6,207) (21,752)
Cash flows from operating activities 147,896 124,079
Investing activities
Purchase of property, plant and equipment, and investment properties 9,11 (46,273) (65,518)
Sale of property, plant and equipment 4,887 4,475
Development costs capitalised 12 (9,999) (9,281)
Purchase of other intangibles 12 (286) (246)
(Increase)/decrease in bank deposits 15 (90,684) 29,458
Interest received 5 12,216 9,110
Dividends received from joint ventures 13 1,500 498
Cash flows from investing activities (128,639) (31,504)
Financing activities
Repayment of borrowings 20 (794) (799)
Amounts received as deposit from joint venture 13 5,983 8,475
Interest paid 5 (1,140) (608)
Repayment of principal of lease liabilities 22 (4,284) (4,359)
Own shares purchased 26 (154) -
Dividends paid 26 (55,424) (55,412)
Cash flows from financing activities (55,813) (52,703)
Net decrease in cash and cash equivalents (36,556) 39,872
Cash and cash equivalents at beginning of the year 122,293 81,388
Effect of exchange rate fluctuations on cash held 1,683 1,033
Cash and cash equivalents at end of the year 15 87,420 122,293
Cash and cash equivalents and bank deposits at the end of the year were
£273.6m (2024: £217.8m). See Note 15 for more details.
NOTES (FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS)
1. Accounting policies
This section sets out our principal accounting policies that relate to the
financial statements as a whole, along with the critical accounting judgements
and estimates that management has identified as having a potentially material
impact on the Group's consolidated financial statements. Where an accounting
policy is applicable to a specific note in the financial statements, the
policy is described within that note.
Basis of preparation
Renishaw plc (the Company) is a company incorporated in England and Wales. The
Group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the Group, and 'we') and equity account
the Group's interest in joint ventures. The parent company financial
statements present information about the Company as a separate entity and not
about the Group.
The financial information set out in the announcement does not constitute the
Group's statutory accounts for the years ended 30 June 2025 or 30 June 2024.
The financial information for the year ended 30 June 2023 is derived from the
statutory accounts for that year, which have been delivered to the Registrar
of Companies. The auditor reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis without
qualifying their report and did not contain a statement under s498 (2) or (3)
Companies Act 2006. In respect of the year ended 30 June 2025, an unqualified
auditor's report was signed on 17 September 2025. The statutory accounts will
be delivered to the Registrar of Companies following the Group's annual
general meeting.
The consolidated financial statements are presented in Sterling, which is the
Company's functional currency and the Group's presentational currency, and all
values are rounded to the nearest thousand (£'000).
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these Group financial
statements. The key estimates (that have a significant risk of material
adjustment in the next year) and critical judgements (that have a significant
effect on the financial statements) made by the Directors in applying the
accounting policies are noted below.
Basis of consolidation
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. In assessing control, the Group takes into
consideration potential voting rights that are exercisable. The acquisition
date is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that
control ceases. Losses applicable to the non-controlling interests in a
subsidiary are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
Joint ventures are accounted for using the equity method (equity-accounted
investees) and are initially recognised at cost. The Group's investments
includes goodwill identified on acquisition, net of any accumulated impairment
losses.
The consolidated financial statements include the Group's share of the total
comprehensive income and equity movements of equity accounted investees, from
the date that significant influence commences until the date that significant
influence ceases. When the Group's share of losses exceeds its interest in an
equity accounted investee, the Group's carrying amount is reduced to nil and
recognition of further losses is discontinued (except to the extent that the
Group has incurred legal obligations or made payments on behalf of an
investee).
Intragroup balances and transactions, and any unrealised income and expenses
arising from intragroup transactions, are eliminated on consolidation.
Unrealised gains arising from transactions with equity accounted investees are
eliminated against the investment to the extent of the Group's interest in the
investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Foreign currencies
On consolidation, overseas subsidiaries' results are translated into Sterling
at weighted average exchange rates for the year by translating each overseas
subsidiary's monthly results at exchange rates applicable to the respective
months. Assets and liabilities denominated in foreign currencies at the
balance sheet date are translated into Sterling at the foreign exchange rates
prevailing at that date. Differences on exchange resulting from the
translation of overseas assets and liabilities are recognised in Other
comprehensive income and are accumulated in equity.
Monetary assets and liabilities denominated in foreign currencies are reported
at the rates prevailing at the time, with any gain or loss arising from
subsequent exchange rate movements being included as an exchange gain or loss
in the Consolidated income statement. Foreign currency differences arising
from transactions are recognised in the Consolidated income statement.
New, revised or changes to existing accounting standards
The following accounting standards and amendments became effective as at 1
January 2024 and have been adopted in the preparation of these financial
statements, with effect from 1 July 2024:
- amendments to IAS 1, Classification of Liabilities as Current or
Non-current;
- amendments to IAS 7 and IFRS 7, Supplier Finance Arrangements; and
- amendments to IAS 16, Lease liability in a Sale and Leaseback.
These have not had a material effect on these financial statements.
At the date of these financial statements, the following standards and
amendments that are potentially relevant to the Group, and which have not been
applied in these financial statements, were in issue but not yet effective:
- IFRS 18 Presentation and Disclosures in Financial Statements (not yet
endorsed by the UK); and
- IFRS 19 Subsidiaries without Public Accountability: Disclosures (not yet
endorsed by the UK); and
- amendments to IAS 21, Lack of exchangeability.
The adoption of these standards and interpretations in future periods is not
expected to have a material impact on the financial statements of the Group.
The Group has applied the temporary exception issued by the International
Accounting Standards Board from the accounting requirements for deferred taxes
in IAS 12 arising from the Organisation for Economic Co-operation and
Development's (OECD) international tax reform. Accordingly, the Group neither
recognises nor discloses information about deferred tax assets and liabilities
related to Global Minimum Tax income taxes.
Alternative performance measures
The financial statements are prepared in accordance with adopted IFRS and
applied in accordance with the provisions of the Companies Act 2006. In
measuring our performance, the financial measures that we use include those
which have been derived from our reported results, to eliminate factors which
distort year-on-year comparisons.
These are considered non-GAAP financial measures. We believe this information,
along with comparable GAAP measurements, is useful to stakeholders in
providing a basis for measuring our operational performance. The Board uses
these financial measures, along with the most directly comparable GAAP
financial measures, in evaluating our performance (see Note 29).
Prior year restatement
An error has been identified with the Group's classification of a German
pension scheme as a defined contribution scheme, as opposed to a defined
benefit scheme, following a request for funding from the pension scheme
support fund. In line with IAS 8, the Group has restated balances at 30 June
2024 and 1 July 2023.
The impact on the financial statements as 1 July 2023 was the recognition of a
non-current liability employee benefit of £20,493,000 and a reimbursement
right asset of £11,348,000. A corresponding net deferred tax asset of
£2,651,000 has also been recognised. The net effect was a reduction in
retained earnings of £6,494,000.
At 30 June 2024, the closing non-current liability employee benefit and
reimbursement right asset were of £21,349,000 and £12,116,000 respectively.
A corresponding net deferred tax asset of £2,677,000 has also been
recognised. The total adjustment recognised through the Consolidated statement
of comprehensive income and expense related to the 'Remeasurement of defined
benefit pension scheme assets/liabilities/reimbursement right' and 'Deferred
tax on remeasurement of defined benefit pension scheme
assets/liabilities/reimbursement right' was a loss of £88,000 and a gain of
£26,000 respectively. See Note 23 Employee benefits for further details.
2024 2023
Reported Adjustment Restated Reported Adjustment Restated
£'000 £'000 £'000 £'000 £'000 £'000
Assets
Reimbursement Right - 12,116 12,116 - 11,348 11,348
Deferred tax assets 17,690 2,677 20,367 19,944 2,651 22,595
Non-current liabilities
Employee benefits - (21,349) (21,349) (45) (20,493) (20,538)
Equity
Retained earnings 876,990 (6,556) 870,434 871,777 (6,494) 865,283
Critical accounting judgements and estimation uncertainties
The preparation of financial statements in conformity with UK-adopted IAS
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and other factors that are believed to be reasonable
under the circumstances. The results of this form the basis of making
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may therefore differ from
these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis.
The areas of critical accounting judgements and estimation uncertainties that
have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities in the next financial year are summarised
below with further details included within accounting policies as indicated.
Item Key judgements (J) and estimates (E)
Taxation J - Whether uncertain tax positions need to be recognised
Research and development costs J - Whether a project meets the criteria for capitalisation
Goodwill and capitalised development costs E - Estimates of future cash flows for impairment testing
Inventories E - Determination of net realisable value
Defined benefit pension schemes E - Valuation of defined benefit pension schemes' liabilities
Defined benefit pension schemes J - Whether past service costs need to be recognised
Cash flow hedges E - Estimates of highly probable forecasts of the hedged item
Adjusted performance measure J - Whether items are appropriate to exclude from adjusted measures
Employment benefits J - When termination benefits should be recognised
Climate change
We have considered the potential effect of physical and transitional climate
change risks when preparing these consolidated financial statements and have
also considered the effect of our own Net Zero commitments. Our consideration
of the potential effect of climate change on these consolidated financial
statements included reviewing:
- discounted cash flow forecasts, used in accounting for goodwill, capitalised
development costs, and deferred tax assets;
- useful economic lives and residual values of property, plant and equipment;
- planned use of right-of-use assets; and
- expected demand for inventories.
We also considered the estimated capital expenditure needed in the next five
years to deliver our Net Zero plan.
Overall, we do not believe that climate change has a material effect on our
accounting judgements and estimates, nor in the carrying value of assets and
liabilities in the consolidated financial statements for the year ended 30
June 2025. We will continue to review this, and update our accounting and
disclosures as the position changes.
Going concern
In preparing these financial statements, the Directors have adopted the going
concern basis. The decision to adopt the going concern basis was made after
considering:
- the Group's strategy and business model;
- the Group's risk management processes and principal risks;
- the Group's financial resources and strategies; and
- the process undertaken to review the Group's viability, including scenario
testing.
The financial models for the viability review were based on the pessimistic
version of the five-year business plan, but covering a period to 30 September
2028. For context, revenue in the first year of this pessimistic base scenario
is lower than the FY2025 revenue of £713.0m, while costs and other cash
outflows still reflect ambitious growth plans. In the going concern
assessment, the Directors reviewed this same version of the plan but to 30
September 2026, as well as the 'severe but plausible' scenarios used in the
viability review, again to 30 September 2026. These scenarios reflected a
significant reduction in revenue, a significant increase in costs, and a third
scenario incorporating both a reduction to revenue and an increase in costs
but to a lesser degree than the first two scenarios. In each scenario the
Group's cash balances remained positive throughout the period to 30 September
2026.
The Directors also reviewed a reverse stress test for the period to 30
September 2026, identifying what would need to happen in this period for the
Group to deplete its cash and cash equivalents and bank deposit balances. This
identified a trading level so low that the Directors feel that the events
that could trigger this would be remote. The Directors also concluded that
the risk of a one-off cash outflow that would exhaust the Group's cash and
cash equivalents and bank deposits balances in the assessment period was also
remote.
Based on this assessment, incorporating a review of the current position, the
scenarios, the principal risks and mitigation, the Directors have a reasonable
expectation that the Group will be able to continue operating and meet its
liabilities as they fall due over the period to 30 September 2026.
2. Revenue disaggregation and segmental analysis
We manage our business by segment, comprising Manufacturing technologies and
Analytical instruments and medical devices, and by geographical region. The
results of these segments and regions are regularly reviewed by the Board to
assess performance and allocate resources, and are presented in this note.
Accounting policy
The Group generates revenue from the sale of goods, capital equipment and
services. These can be sold both on their own and together.
a) Sale of goods, capital equipment and services
The Group's contracts with customers consist both of contracts with one
performance obligation and contracts with multiple performance obligations.
For contracts with one performance obligation, revenue is measured at the
transaction price, which is typically the contract value except for customers
entitled to volume rebates, and recognised at the point in time when control
of the product transfers to the customer. This point in time is typically when
the products are made available for collection by the customer, collected by
the shipping agent, or delivered to the customer, depending upon the shipping
terms applied to the specific contract.
Contracts with multiple performance obligations typically exist where, in
addition to supplying products, we also supply services such as user training,
servicing and maintenance, and installation. Where the installation service is
simple, does not include a significant integration service and could be
performed by another party then the installation is accounted for as a
separate performance obligation. Where the contracts include multiple
performance obligations, the transaction price is allocated to each
performance obligation based on the relative stand-alone selling prices. The
revenue allocated to each performance obligation is then recognised when, or
as, that performance obligation is satisfied. For installation, this is
typically at the point in time in which installation is complete. For
training, this is typically the point in time at which training is delivered.
For servicing and maintenance, the revenue is recognised evenly over the
course of the servicing agreement except for ad-hoc servicing and maintenance
which is recognised at the point in time in which the work is undertaken.
b) Sale of software
The Group provides software licences and software maintenance to customers,
sold both on their own and together with associated products. For software
licences, where the licence and/or maintenance is provided as part of a
contract that provides customers with software licences and other goods and
services then the transaction price is allocated on the same basis as
described in a) above.
The Group's distinct software licences provide a right of use, and therefore
revenue from software licences is recognised at the point in time in which the
licence is supplied to the customer. Revenue from software maintenance is
recognised evenly over the term of the maintenance agreement.
c) Extended warranties
The Group provides standard warranties to customers that address potential
latent defects that existed at point of sale and as required by law
(assurance-type warranties). In some contracts, the Group also provides
warranties that extend beyond the standard warranty period and may be sold to
the customer (service-type warranties).
Assurance-type warranties are accounted for by the Group under IAS 37
'Provisions, Contingent Liabilities and Contingent Assets'. Service-type
warranties are accounted for as separate performance obligations and therefore
a portion of the transaction price is allocated to this element, and then
recognised evenly over the period in which the service is provided.
d) Contract balances
Contract assets represent the Group's right to consideration in exchange for
goods, capital equipment and/or services that have been transferred to a
customer, and mainly includes accrued revenue in respect of goods and services
provided to a customer but not yet fully billed. Contract assets are distinct
from receivables, which represent the Group's right to consideration that is
unconditional.
Contract liabilities represent the Group's obligation to transfer goods,
capital equipment and/or services to a customer for which the Group has either
received consideration or consideration is due from the customer.
e) Disaggregation of revenue
The Group disaggregates revenue from contracts with customers between: goods,
capital equipment and installation, and aftermarket services; reporting
segment; and geographical location.
Management believe these categories best depict how the nature, amount, timing
and uncertainty of the Group's revenue is affected by economic factors.
Within the Manufacturing technologies business there are multiple product
offerings with similar economic characteristics, similar production processes
and similar customer bases. Our Manufacturing technologies business consists
of industrial metrology, position measurement and additive manufacturing (AM)
product groups. Analytical instruments and medical devices represents all
other operating segments within the Group, which consists of spectroscopy and
neurological product lines.
Year ended 30 June 2025 Analytical instruments and medical devices
Manufacturing technologies
Total
£'000 £'000 £'000
Revenue 671,469 41,575 713,044
Depreciation, amortisation and impairment 33,001 2,745 35,746
Research and development expenditure 65,727 3,183 68,910
Operating profit 107,593 292 107,885
Share of profits of joint ventures 3,538 - 3,538
Net financial income - - 6,577
Profit before tax - - 118,000
Year ended 30 June 2024 Analytical instruments and medical devices £'000
Manufacturing technologies
£'000 Total
£'000
Revenue 648,063 43,238 691,301
Depreciation, amortisation and impairment 31,374 1,454 32,828
Research and development expenditure 68,205 2,855 71,060
Operating profit 103,181 5,486 108,667
Share of profits of joint ventures 3,880 - 3,880
Net financial income - - 10,047
Profit before tax - - 122,594
There is no allocation of assets and liabilities to the segments identified
above. Depreciation, amortisation and impairments are allocated to segments on
the basis of the level of activity.
The following table shows the analysis of non-current assets, excluding
deferred tax, derivatives and employee benefits, by geographical region:
2025 2024
£'000 £'000
UK 286,145 268,027
Overseas 166,118 166,816
Total non-current assets 452,263 434,843
No overseas country had non-current assets amounting to 10% or more of the
Group's total non-current assets.
The following table shows the disaggregation of Group revenue by category:
2025 2024
£'000 £'000
Goods, capital equipment and installation 642,378 624,491
Aftermarket services 70,666 66,810
Total Group revenue 713,044 691,301
Aftermarket services include repairs, maintenance and servicing, programming,
training, extended warranties, and software licences and maintenance. There is
no significant difference between our two operating segments as to their split
of revenue by type.
The analysis of revenue by geographical market was:
2025 2024
£'000 £'000
APAC total 337,721 318,836
UK (country of domicile) 34,017 37,956
EMEA, excluding UK 173,751 170,077
EMEA total 207,768 208,033
Americas total 167,555 164,432
Total Group revenue 713,044 691,301
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:
2025 2024
£'000 £'000
China 186,495 177,155
USA 142,860 138,836
Germany 55,682 54,572
Japan 49,273 49,329
There was no revenue from transactions with a single external customer which
amounted to more than 10% of the Group's total revenue.
3. Employee costs
The remuneration costs of our people account for a significant proportion of
our total expenditure, which are analysed in this note.
The aggregate employee costs for the year were:
2025 2024
£'000 £'000
Wages and salaries 247,070 233,536
Compulsory social security contributions 30,514 27,130
Contributions to defined contribution pension schemes 29,269 27,851
Share-based payment charge 790 883
Total payroll costs 307,643 289,400
Wages and salaries and compulsory social security contributions include
£11.1m (2024: £10.0m) relating to performance bonuses.
The average number of persons employed by the Group during the year was:
2025 2024
Number Number
UK 3,491 3,400
Overseas 1,848 1,813
Average number of employees 5,339 5,213
Key management personnel have been assessed to be the Directors of the Company
and the Senior Leadership Team (SLT), which was an average of 22 people (2024:
22 people).
The total remuneration of the Directors and the SLT was:
2025 2024
£'000 £'000
Short-term employee benefits 6,322 6,139
Post-employment benefits 489 529
Share-based payment charge 790 883
Total remuneration of key management personnel 7,601 7,551
Short-term employee benefits include £0.8m (2024: £0.2m) relating to
performance bonuses payable in cash.
The share-based payment charge relates to share awards granted in previous
years, not yet vested. Shares equivalent to £0.9m (2024: £0.2m) are to be
awarded in respect of FY2025 (see Note 24).
4. Cost of sales
Our cost of sales includes the costs to manufacture our products and our
engineering spend on existing and new products, net of capitalisation and
research and development tax credits.
Accounting policy
We receive both government grants and RDEC (tax credits) for research and
development projects. For research projects, where the costs have not been
capitalised, we recognise a deduction against expenditure within Cost of sales
in the Consolidated income statement (having initially recognised the grant in
the Consolidated balance sheet if it was received in advance of the related
expense). Where a grant or RDEC is received for capitalised development costs,
we initially recognise it in the Consolidated balance sheet and then release
it to match the amortisation within Cost of sales. Both types are only
recognised when we have reasonable assurance that any grant conditions will be
met.
Included in cost of sales are the following amounts:
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
total items total total items total
2025 2025 2025 2024 2024 2024
£'000 £'000 £'000 £'000 £'000 £'000
Production costs 272,814 - 272,814 269,562 - 269,562
Research and development expenditure 68,910 - 68,910 71,060 - 71,060
Other engineering expenditure 46,770 4,379 51,149 35,723 - 35,723
Gross engineering expenditure 115,680 4,379 120,059 106,783 - 106,783
Development expenditure capitalised (net of amortisation) (5,574) - (5,574) (4,287) - (4,287)
Development expenditure impaired 1,818 - 1,818 3,299 - 3,299
Research and development tax credit (5,088) - (5,088) (7,699) - (7,699)
Total engineering costs 106,836 4,379 111,215 98,096 - 98,096
Total cost of sales 379,650 4,379 384,029 367,658 - 367,658
Production costs includes the raw material and component costs, payroll costs
and sub-contract costs, and allocated overheads associated with manufacturing
our products.
Research and development expenditure includes the payroll costs, material
costs and allocated overheads attributed to projects identified as relating to
new products or processes. Other engineering expenditure includes the payroll
costs, material costs and allocated overheads attributed to projects
identified as relating to existing products or processes.
5. Financial income and expenses
Financial income mainly arises from bank interest on our deposits. We are
exposed to realised currency gains and losses on translation of foreign
currency denominated intragroup balances and offsetting financial instruments.
Included in financial income and expenses are the following amounts:
2025 2024
Financial income £'000 £'000
Bank interest receivable 11,741 9,110
Fair value gains from one-month forward currency contracts 3,360 318
Interest on pension schemes' assets 503 2,908
Other interest income 913 -
Total financial income 16,517 12,336
Financial expenses
Currency losses 3,899 1,645
Lease interest 685 537
Interest payable on amounts owed to joint ventures 371 55
Interest payable on borrowings 49 36
Other interest payable 4,936 16
Total financial expenses 9,940 2,289
Currency losses relate to revaluations of foreign currency-denominated
balances using latest reporting currency exchange rates. The losses
recognised in FY2024 and FY2025 largely related to an appreciation of Sterling
relative to the US dollar affecting US dollar-denominated intragroup balances
in the Company. 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. See Note
25 for further details. The net currency movement of foreign
currency-denominated balances and one-month forward currency contracts was a
loss of £539,000 (2024: loss of £1,327,000).
Other interest payable includes liabilities recognised of £4,852,000 for
historical and non-recurring tax matters, see Note 7 for further details.
6. Profit before tax
Detailed below are other notable amounts recognised in the Consolidated income
statement.
Included in the profit before tax are the following costs/(income):
2025 2024
notes £'000 £'000
Depreciation and impairment of property, plant and equipment, right-of-use assets, and investment properties 9,10,11 29,057 24,195
Profit on sale of property, plant and equipment 9 (1,083) (1,199)
Amortisation and impairment of intangible assets 12 6,689 8,633
Grant income - (3,280) (2,816)
These costs/(income) can be found within cost of sales, distribution costs and
administrative expenses in the Consolidated income statement. Further detail
on each element can be found in the relevant notes.
Costs within Administrative expenses relating to auditor fees included:
2025 2024
£'000 £'000
Audit of these financial statements 899 873
Audit of subsidiary undertakings pursuant to legislation 589 606
Other assurance 33 27
All other non-audit fees - -
Total auditor fees 1,521 1,506
7. Taxation
The Group tax charge is affected by our geographic mix of profits and other
factors explained in this note. Our expected future tax charges and related
tax assets are also set out in the deferred tax section, together with our
view on whether we will be able to make use of these in the future.
Accounting policy
Tax on the profit for the year comprises current, deferred and global minimum
taxes. Tax is recognised in the Consolidated income statement except to the
extent that it relates to items recognised directly in Other comprehensive
income, in which case it is recognised in the Consolidated statement of
comprehensive income and expense. Current tax is the expected tax payable on
the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in
previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for:
- the initial recognition of goodwill;
- the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination; and
- differences relating to investments in subsidiaries, to the extent that they
will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent it is probable that future
taxable profits (including the future release of deferred tax liabilities)
will be available, against which the deductible temporary differences can be
used, based on management's assumptions relating to the amounts and timing of
future taxable profits. Estimates of future profitability on an entity basis
are required to ascertain whether it is probable that sufficient taxable
profits will arise to support the recognition of deferred tax assets relating
to the corresponding entity.
Key judgement - Whether uncertain tax positions need to be recognised
The Group is subject to a range of tax legislation that can vary by
jurisdiction, and tax compliance for global businesses is increasingly
complex. The objective of our tax strategy is to comply with all applicable
tax laws and regulations in the territories that the Group operates in,
however sometimes the tax treatment of transactions and events can be
uncertain.
Where this is the case, judgement is needed in how these uncertain tax
treatments should be reflected in preparing the financial statements,
particularly as such topics are often complex and can take several years to
resolve. This year, the nature and potential value of the issues under review
were significant and were a key judgement for management.
The following table shows an analysis of the tax charge:
2025 2024
£'000 £'000
Current tax:
UK corporation tax on profits for the year 7,550 3,748
UK corporation tax - prior year adjustments 2,778 (693)
Overseas tax on profits for the year 16,018 14,497
Overseas tax - prior year adjustments 6,166 105
Global minimum tax 757 -
Total current tax 33,269 17,657
Deferred tax:
Origination and reversal of temporary differences 2,077 8,613
Prior year adjustments (1,203) (473)
Derecognition of previously recognised tax losses and excess interest 323 427
Recognition of previously unrecognised tax losses and excess interest (223) (519)
974 8,048
Tax charge on profit 34,243 25,705
The tax for the year is higher (2024: lower) than the UK standard rate of
corporation tax of 25% (2024: 25% weighted). The differences are explained as
follows:
2025 2024
£'000 £'000
Profit before tax 118,000 122,594
Tax at 25.0% (2024: 25.0%) 29,500 30,649
Effects of:
Different tax rates applicable in overseas subsidiaries (4,648) (4,866)
Permanent differences 1,439 1,028
Global minimum tax 757 -
Companies with unrelieved tax losses 7 93
Share of profits of joint ventures (885) (970)
Tax incentives (123) -
Prior year adjustments 7,741 (1,061)
Recognition of previously unrecognised tax losses and excess interest (223) (519)
Derecognition of previously recognised tax losses and excess interest 323 427
Irrecoverable withholding tax 720 447
Deferred tax on unremitted earnings (425) 425
Other differences 60 52
Tax charge on profit 34,243 25,705
Effective tax rate 29.0% 21.0%
We operate in many countries around the world and the overall effective tax
rate (ETR) is a result of the combination of the varying tax rates applicable
throughout these countries. The FY2025 ETR has increased mainly due to the
Global minimum tax charge of £757,000 and a prior year adjustment of
£9,154,000 relating to historical and non-recurring tax matters. The tax
matters relate to specific legacy arrangements which we would not expect to
recur. Applicable accounting standards require a full provision for tax and
the associated interest of £4,852,000, however, we continue to seek
resolution to these matters which would reduce these amounts.
The Group's future ETR largely depends on the geographic mix of profits and
whether there are any changes to tax legislation in the Group's most
significant countries of operations.
The Finance (No 2) Bill 2023, that includes Pillar Two legislation, was
substantively enacted on 20 June 2023 for IFRS purposes. The Pillar Two rules
came into effect for accounting periods beginning on or after 1 January 2024,
therefore the rules apply to the Group from FY2025 onwards.
The Group has accrued Global minimum tax of £757,000 for FY2025 (FY2024: nil)
in respect of Ireland, which is due to the statutory corporate income tax rate
of 12.5% on trading income being lower than the global minimum tax rate of
15%. The impact on the effective tax rate of the Group as a result was 0.6%
(FY2024: 0.0%). This is in line with the Group's expectations in FY2024 that
the impact would not exceed a 0.7% increase to the Group's ETR in FY2025. The
Group will continue to assess the future impact of Pillar Two based on the
latest guidance and law changes of each jurisdiction that it operates in to
ensure compliance.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right of offset and there is an intention to net settle the
balances. After taking these offsets into account, the net position of £16.4m
liability (2024: £13.2m liability) is presented as a £22.4m deferred tax
asset (2024: £20.4m asset) and a £38.8m deferred tax liability (2024:
£33.6m liability) in the Consolidated balance sheet.
Where deferred tax assets are recognised, the Directors are of the opinion,
based on recent and forecast trading, that the level of profits in current and
future years make it more likely than not that these assets will be recovered.
Balances at the end of the year were:
2025 2024
Assets Liabilities Net Assets Liabilities Net
£'000 £'000 £'000 £'000 £'000 £'000
Property, plant and equipment 574 (33,086) (32,512) 549 (29,946) (29,397)
Intangible assets - (4,655) (4,655) - (4,067) (4,067)
Intragroup trading (inventories) 16,262 - 16,262 15,147 - 15,147
Intragroup trading (fixed assets) 1,129 - 1,129 1,101 - 1,101
Defined benefit pension schemes 6,128 (2,380) 3,748 6,191 (2,445) 3,746
Reimbursement right - (3,744) (3,744) - (3,514) (3,514)
Derivatives - (5,088) (5,088) - (3,637) (3,637)
Tax losses 1,545 - 1,545 1,823 - 1,823
Other 7,663 (700) 6,963 6,895 (1,330) 5,565
Balance at the end of the year 33,301 (49,653) (16,352) 31,706 (44,939) (13,233)
Other deferred tax assets include temporary differences relating to inventory
provisions totalling £2.6m (2024: £2.9m), other provisions (including bad
debt provisions) of £0.6m (2024: £1.0m), and employee benefits relating to
Renishaw plc of £1.0m (2024: £1.1m) and Renishaw KK of £0.7m (2024:
£0.8m), with the remaining balance relating to several other smaller
temporary differences.
The movements in the deferred tax balance during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year (13,233) (16,175)
Movements in relation to property, plant and equipment (3,115) (5,008)
Movements in relation to intangible assets (588) (145)
Movements in relation to intragroup trading (inventories) 1,115 (1,618)
Movements in relation to intragroup trading (fixed assets) 28 (669)
Movements in relation to defined benefit pension schemes 146 (521)
Movements in relation to tax losses (278) (458)
Movement in relation to other 1,718 371
Movements in the Consolidated income statement (974) (8,048)
Movements in relation to the cash flow hedging reserve (1,451) (1,453)
Movements in relation to the defined benefit pension scheme (374) 12,450
assets/liabilities/reimbursement right
Movements in the Consolidated statement of comprehensive income and expense (1,825) 10,997
Currency adjustment (320) (7)
Balance at the end of the year (16,352) (13,233)
Deferred tax assets of £1.5m (2024: £1.8m) in respect of losses are
recognised where it is considered likely that the business will generate
sufficient future taxable profits. Deferred tax assets have not been
recognised in respect of tax losses carried forward of £5.0m
(2024: £6.1m), due to uncertainty over their offset against future taxable
profits and therefore their recoverability. These losses are held by Group
companies in Brazil, Australia, Canada, UAE and the US, where for 90% of
losses there are no time limitations on their utilisation.
In determining profit forecasts for each Group company, the key variable is
the revenue forecast, which has been estimated using consistently applied
external and internal data sources. Sensitivity analysis indicates that a
reduction of 5% to relevant revenue forecasts would result in an impairment to
deferred tax assets recognised in respect of losses and intragroup trading
(inventories) of around £0.2m. An increase of 5% to relevant revenue
forecasts would result in additions to deferred tax assets in respect of tax
losses not recognised of around £0.3m.
It is likely that the majority of unremitted earnings of overseas subsidiaries
would qualify for the UK dividend exemption. However, £73.7m (2024: £68.3m)
of those earnings may still result in a tax liability principally as a result
of withholding taxes levied by the overseas jurisdictions in which those
subsidiaries operate. These tax liabilities are not expected to exceed £5.2m
(2024: £4.3m), of which £nil (2024: £0.4m) has been provided on the basis
that the Group does not expect to remit these amounts in the foreseeable
future.
8. Earnings per share
Basic earnings per share is the amount of profit generated in a financial year
attributable to equity shareholders, divided by the weighted average number of
shares in issue during the year.
Basic and diluted earnings per share are calculated on earnings of
£83,757,000 (2024: £96,889,000) and on 72,734,797 shares (2024: 72,719,565
shares), being the number of shares in issue. The number of shares excludes
53,746 (2024: 68,978) shares held by the Employee Benefit Trust (EBT). On
this basis, earnings per share (basic and diluted) is calculated as 115.2
pence (2024: 133.2 pence).
There is no difference between the weighted average earnings per share and the
basic and diluted earnings per share.
For the calculation of adjusted earnings per share, per Note 29, earnings of
£83,757,000 were adjusted by post-tax amounts for:
- Costs related to the closure of the drug delivery business, £2,059,000
loss;
- Costs related to the closure of the Edinburgh research facility, £2,320,000
loss;
- Other interest payable related to liabilities recognised for historical and
non-recurring tax matters, £4,852,000 loss; and
- Taxation prior year adjustment related to historical and non-recurring tax
matters, £9,154,000 loss.
There is no difference between statutory and adjusted earnings per share in
FY2024.
9. Property, plant and equipment
The Group makes significant investments in distribution and manufacturing
infrastructure. During the year we have invested in our manufacturing
equipment at our Miskin facility in Wales, UK, following the expansion in the
previous year.
Accounting policy
Freehold land is not depreciated. Other assets are stated at cost less
accumulated depreciation and accumulated impairment losses, if any.
Depreciation is provided to write off the cost of assets less their estimated
residual value on a straight-line basis over their estimated useful economic
lives as follows: freehold buildings, 50 years; building infrastructure, 10 to
50 years; plant and equipment, 3 to 25 years; and vehicles, 3 to 4 years.
Freehold Assets in the
land and Plant and Motor course of
buildings equipment vehicles construction Total
Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2024 255,536 278,189 6,099 56,593 596,417
Additions 6,374 23,258 1,220 15,421 46,273
Transfers 19,032 18,443 - (37,475) -
Transfers to investment properties (2,795) (597) - - (3,392)
Disposals (725) (7,819) (1,206) - (9,750)
Currency adjustment (2,794) (2,420) (151) - (5,365)
At 30 June 2025 274,628 309,054 5,962 34,539 624,183
Depreciation
At 1 July 2024 49,460 216,838 5,079 - 271,377
Charge for the year 5,275 17,497 470 - 23,242
Impairment 989 - - - 989
Transfers to investment properties (1,179) (439) - - (1,618)
Disposals (270) (4,619) (1,057) - (5,946)
Currency adjustment (485) (1,562) (101) - (2,148)
At 30 June 2025 53,790 227,715 4,391 - 285,896
Net book value
At 30 June 2025 220,838 81,339 1,571 34,539 338,287
At 30 June 2024 206,076 61,351 1,020 56,593 325,040
Profit on disposals of Property, plant and equipment amounted to £1.1m (2024:
£1.2m profit).
Additions to assets in the course of construction comprise £11.2m (2024:
£36.5m) for land and buildings and £4.2m (2024: £15.4m) for plant and
equipment.
At 30 June 2025, properties with a net book value of £48.7m (2024: £45.9m)
were subject to a fixed charge to secure the UK defined benefit pension
scheme liabilities.
Freehold Assets in the
land and Plant and Motor course of
buildings equipment vehicles construction Total
Year ended 30 June 2024 £'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2023 213,385 273,156 7,112 53,469 547,122
Reclassification 3,669 (3,669) - - -
Additions 2,412 10,615 308 51,912 65,247
Transfers 42,637 6,151 - (48,788) -
Disposals (2,916) (6,810) (1,245) - (10,971)
Currency adjustment (3,651) (1,254) (76) - (4,981)
At 30 June 2024 255,536 278,189 6,099 56,593 596,417
Depreciation
At 1 July 2023 45,647 209,546 5,844 - 261,037
Reclassification 540 (540) - - -
Charge for the year 4,378 14,526 382 - 19,286
Disposals (658) (5,951) (1,086) - (7,695)
Currency adjustment (447) (743) (61) - (1,251)
At 30 June 2024 49,460 216,838 5,079 - 271,377
Net book value
At 30 June 2024 206,076 61,351 1,020 56,593 325,040
At 30 June 2023 167,738 63,610 1,268 53,469 286,085
10. Right-of-use assets
The Group leases distribution properties and cars from third parties and
recognises an associated right-of-use asset where we are afforded control and
economic benefit from the use of the asset.
Accounting policy
At the commencement date of a lease arrangement the Group recognises a
right-of-use asset for the leased item and a lease liability for any payments
due. Right-of-use assets are initially measured at cost, being the present
value of the lease liability plus any initial costs incurred in entering the
lease and less any incentives received. See Note 21 for further detail on
lease liabilities. Right-of-use assets are subsequently depreciated on a
straight-line basis from the commencement date to the earlier of the end
of the useful life or the end of the lease term.
Leasehold property Plant and equipment Motor vehicles Total
Year ended 30 June 2025 £'000 £'000 £'000 £'000
Net book value
At 1 July 2024 9,899 66 4,781 14,746
Additions 1,746 49 841 2,636
Reductions - - (12) (12)
Depreciation (2,541) (43) (2,049) (4,633)
Currency adjustment (451) 2 (70) (519)
At 30 June 2025 8,653 74 3,491 12,218
Leasehold property Plant and equipment Motor vehicles Total
Year ended 30 June 2024 £'000 £'000 £'000 £'000
Net book value
At 1 July 2023 5,069 89 3,244 8,402
Additions 7,320 51 3,843 11,214
Reductions - - (3) (3)
Depreciation (2,434) (73) (2,146) (4,653)
Currency adjustment (56) (1) (157) (214)
At 30 June 2024 9,899 66 4,781 14,746
11. Investment properties
The Group's investment properties consist of properties in the UK, Ireland,
India and Switzerland, which are occupied by rent-paying third parties. During
the year, we have transferred two properties from Property, plant and
equipment to Investment properties following a change in use in the UK and
Switzerland.
Accounting policy
Where property owned by the Group is held to earn rentals or for long-term
capital growth it is recognised as investment property.
Where a property is part-occupied by the Group, portions of the property are
recognised as investment property if they meet the above description and if
these portions could be sold separately and reliably measured. If the portions
could not be sold separately, the property is recognised as an investment
property only if a significant proportion is held for rental or appreciation
purposes.
The Group has elected to value investment properties on a cost basis,
initially comprising of the purchase price and any directly attributable
expenditure. Depreciation is provided to write off the cost of assets on a
straight-line basis over their estimated useful economic lives, being 50
years. Amounts relating to freehold land is not depreciated.
2025 2024
£'000 £'000
Cost
Balance at the beginning of the year 12,103 11,896
Additions - 271
Transfers from Property, plant and equipment 3,392 -
Currency adjustment (284) (64)
Balance at the end of the year 15,211 12,103
Depreciation
Balance at the beginning of the year 1,818 1,573
Charge for the year 193 256
Transfers from Property, plant and equipment 1,618 -
Currency adjustment 16 (11)
Balance at the end of the year 3,645 1,818
Net book value 11,566 10,285
The Group has no restrictions on the realisability of its investment
properties and no contractual obligations to purchase, construct or develop
investment properties.
Amounts recognised in the Consolidated income statement relating to investment
properties:
2025 2024
£'000 £'000
Rental income 945 829
Direct operating expenses (including repairs and maintenance) 218 247
Profit 727 582
The fair value of the Group's investment properties totalled £18.4m at 30
June 2025 (2024: £14.7m). Fair values of each investment property have been
determined within the last three years by independent valuers who hold
recognised and relevant professional qualifications and have recent experience
in the location and category of each investment property being valued. These
valuations have been assessed to be materially appropriate at 30 June 2025.
12. Intangible assets
Our Consolidated balance sheet contains significant intangible assets, mainly
for goodwill (which arises when we acquire a business and pay a higher amount
than the fair value of its net assets) and capitalised development costs. We
make significant investments into the development of new products, a key part
of our business model, and some of these costs are initially capitalised and
then written off over the lifetime of future sales of that product..
Accounting policy
Goodwill arising on acquisition represents the difference between the cost of
the acquisition and the fair value of the net identifiable assets acquired,
net of deferred tax. Identifiable intangibles are those which can be sold
separately or which arise from legal rights regardless of whether those
rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. It is not
amortised but is tested annually for impairment or earlier if there are any
indications of impairment. The annual impairment review involves comparing the
carrying amount to the estimated recoverable amount and recognising an
impairment loss if the recoverable amount is lower. Impairment losses are
recognised in the Consolidated income statement.
Intangible assets such as customer lists, patents, trademarks, know-how and
intellectual property that are acquired by the Group are stated at cost less
amortisation and impairment losses. Amortisation is charged to the
Consolidated income statement on a straight-line basis over the estimated
useful lives of the intangible assets. The estimated useful lives of the
intangible assets included in the Consolidated balance sheet reflect the
benefit derived by the Group and vary from five to 10 years.
Expenditure on research activities is recognised in the Consolidated income
statement as an expense as incurred. Expenditure on development activities is
capitalised if: the product or process is technically and commercially
feasible; the Group intends and has the technical ability and sufficient
resources to complete development; future economic benefits are probable; and
the Group can measure reliably the expenditure attributable to the intangible
asset during its development.
Development activities involve a plan or design for the production of new or
substantially improved products or processes. The expenditure capitalised
includes the cost of materials, direct labour and an appropriate proportion of
overheads. Other development expenditure is recognised in the Consolidated
income statement as an expense as incurred.
Capitalised development expenditure is amortised over the useful economic life
appropriate to each product or process, ranging from five to 10 years, and is
stated at cost less accumulated amortisation and less accumulated impairment
losses. Amortisation commences when a product or process is available for use
as intended by management. Capitalised development expenditure is removed
from the balance sheet 10 years after being fully amortised.
All non-current assets are tested for impairment whenever there is an
indication that their carrying value may be impaired. An impairment loss is
recognised in the Consolidated income statement to the extent that an asset's
carrying value exceeds its recoverable amount, which represents the higher of
the asset's fair value less costs to sell and its value-in-use. An asset's
value-in-use represents the present value of the future cash flows expected to
be derived from the asset or from the cash generating unit to which it
relates. The present value is calculated using a discount rate that reflects
the current market assessment of the time value of money and the risks
specific to the asset concerned.
Goodwill and capitalised development costs are subject to an annual impairment
test.
Key judgement - Whether a project meets the criteria for capitalisation
Product development costs are capitalised once a project has reached a certain
stage of development, being the point at which the product has passed testing
to demonstrate it meets the technical specifications of the project and it
satisfies all applicable regulations. Judgement is required to assess whether
the new product development has reached the appropriate point for
capitalisation of costs to begin. These costs are subsequently amortised over
their useful economic life once ready for use. Should a product become
obsolete, the accumulated capitalised development costs would need to be
immediately written off in the Consolidated income statement.
Key estimate - Estimates of future cash flows used for impairment testing.
Determining whether goodwill and capitalised development costs are impaired
requires an estimation of the value-in-use of cash-generating units (CGUs) to
which goodwill has been allocated. To calculate the value-in-use we need to
estimate the future cash flows of each CGU and select the appropriate discount
rate for each CGU.
Internally Intellectual property and
generated
development Software other intangible
Goodwill costs licences assets Total
Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2024 20,258 187,941 12,197 4,864 225,260
Additions - 9,999 286 - 10,285
Disposals - (8,368) - - (8,368)
Currency adjustment (376) - 22 15 (339)
At 30 June 2025 19,882 189,572 12,505 4,879 226,838
Amortisation
At 1 July 2024 9,028 154,531 11,751 2,607 177,917
Charge for the year - 4,426 191 254 4,871
Impairment - 1,818 - - 1,818
Disposals - (8,368) - - (8,368)
Currency adjustment - - 14 36 50
At 30 June 2025 9,028 152,407 11,956 2,897 176,288
Net book value
At 30 June 2025 10,854 37,165 549 1,982 50,550
At 30 June 2024 11,230 33,410 446 2,257 47,343
Internally generated development costs Intellectual property and other intangible assets
Software licences
Goodwill Total
Year ended 30 June 2024 £'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2023 20,261 178,660 11,978 4,875 215,774
Additions - 9,281 246 - 9,527
Currency adjustment (3) - (27) (11) (41)
At 30 June 2024 20,258 187,941 12,197 4,864 225,260
Amortisation
At 1 July 2023 9,028 146,221 11,605 2,452 169,306
Charge for the year - 5,011 165 158 5,334
Impairment - 3,299 - - 3,299
Currency adjustment - - (19) (3) (22)
At 30 June 2024 9,028 154,531 11,751 2,607 177,917
Net Book value
At 30 June 2024 11,230 33,410 446 2,257 47,343
At 30 June 2023 11,233 32,439 373 2,423 46,468
Goodwill
Goodwill has arisen on the acquisition of several businesses and has an
indeterminable useful life. It is therefore not amortised but is instead
tested for impairment annually and at any point during the year when an
indicator of impairment exists. Goodwill is allocated to cash generating units
(CGUs), as set out below. This is the lowest level in the Group at which
goodwill is monitored for impairment.
The analysis of goodwill according to business acquired is:
2025 2024
£'000 £'000
itp GmbH 2,959 2,934
Renishaw Mayfield S.A. 2,180 2,089
Renishaw Fixturing Solutions, LLC 5,055 5,497
Other smaller acquisitions 660 710
Total goodwill 10,854 11,230
The recoverable amounts of acquired goodwill are based on value-in-use
calculations. These calculations use cash flow projections based on the
financial business plans approved by management for the next five financial
years. The cash flows beyond this forecast are extrapolated to perpetuity
using a nil growth rate on a prudent basis, to reflect the uncertainties over
forecasting beyond five years.
The following pre-tax discount rates have been used in discounting the
projected cash flows:
2025 2024
Business acquired CGU Discount rate Discount rate
itp GmbH itp GmbH entity ('ITP') 15.1% 13.6%
Renishaw Fixturing Solutions, LLC Renishaw plc ('PLC') 16.5% 14.6%
Renishaw Mayfield S.A. Renishaw Mayfield S.A. entity ('Mayfield') 20.5% 24.6%
The Group post-tax weighted average cost of capital, calculated at 30 June
2025, is 11.6% (2024: 10.7%). Pre-tax discount rates for Manufacturing
technologies CGUs (ITP and PLC) are calculated from this basis, given that
they are aligned with the wider Group's industries, markets and processes. The
Analytical instruments and medical devices' CGU (Mayfield) has a higher risk
weighting, reflecting the less mature nature of this segment.
CGU specific five-year business plans have been used in determining cash flow
projections. Within these plans, revenue forecasts are calculated with
reference to external market data, past outperformance, and new product
launches, consistent with revenue forecasts across the Group. Production
costs, engineering costs, distribution costs and administrative expenses are
calculated based on management's best estimates of what is required to support
revenue growth and new product development. Estimates of capital expenditure
and working capital requirements are also included in the cash flow
projections. The key estimate within these business plans is the forecast of
revenue growth, given that the cost bases of the businesses can be flexed in
line with revenue performance. Given the average revenue growth assumptions
included in the five-year business plans, management's sensitivity analysis
involves modelling a reduction in the forecast cash flows utilised in those
business plans and therefore into perpetuity.
A growth rate of 0.0% (2024: 0.0%) is used to derive the value in perpetuity
in all CGUs.
For there to be an impairment in the PLC, ITP or Mayfield CGUs, the pre-tax
discount rate would need to increase to at least 20%, 21% and 25%
respectively, or there would need to be a reduction to forecast cash flows of
18%, 30% and 8% respectively.
Internally generated development costs
The key assumption in determining the value-in-use for internally generated
development costs is the forecast unit sales over the useful economic life,
which is determined by management using their knowledge and experience with
similar products and the sales history of products already available in the
market. Resulting cash flow projections over five to 10 years, the period over
which product demand forecasts can be reasonably predicted and internally
generated development costs are written off, are discounted using pre-tax
discount rates, which are calculated from the Group post-tax weighted average
cost of capital of 11.6% (2024: 10.7%).
There were impairments of internally generated development costs in the year
of £1.8m (2024: £3.3m). This includes a £0.9m impairment of our chronic
drug delivery intangible asset, following the decision to close the drug
delivery business during the year. The remaining £0.9m is for three other
projects where revenue growth is now expected to be lower than previously
forecast.
For the largest projects, comprising 97% of the net book value at 30 June
2025, a 10% reduction to forecast unit sales, or an increase in the discount
rate by 5%, would not result in an impairment.
13. Investments in joint ventures
Where we make an investment in a company which gives us significant influence
but not full control, we account for our share of their post-tax profits in
our financial statements. We have joint venture arrangements with two
companies, RLS and MSP.
The Group's investments in joint ventures (all investments being in the
ordinary share capital of the joint ventures), whose accounting years end on
30 June, were:
Country of 2025 2024
incorporation and Ownership Ownership
principal place of business % %
RLS Merilna tehnika d.o.o. ('RLS') - joint venture Slovenia 50.0 50.0
Metrology Software Products Limited ('MSP') - joint venture England & Wales 70.0 70.0
Although the Group owns 70% of the ordinary share capital of MSP, this is
accounted for as a joint venture as the control requirements of IFRS 10 are
not satisfied. This is because the shareholders agreement includes that for so
long as the Group's holding is less than 75% of the total shares of MSP,
Renishaw plc agrees to exercise its voting rights such that it only votes as
if it has the same aggregate shareholding as the remaining Management
Shareholders.
Movements during the year were: 2025 2024
£'000 £'000
Balance at the beginning of the year 25,485 22,414
Dividends received (1,500) (498)
Share of profits of joint ventures 3,538 3,880
Currency differences 169 (311)
Balance at the end of the year 27,692 25,485
Renishaw International Limited ('RIL') has a 14-day notice deposit agreement
with RLS. Interest is payable by RIL to RLS at a market rate on a monthly
basis. As at 30 June 2025, under this agreement RIL had received EUR 17.0m
(£14.5m equivalent) (2024: £8.5m), which is recognised as 'Amounts payable
to joint venture' in the Consolidated balance sheet.
Summarised financial information for joint ventures:
RLS MSP
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Assets 52,093 49,295 6,258 5,470
Liabilities (5,526) (6,167) (532) (442)
Net assets 46,567 43,128 5,726 5,028
Group's share of net assets 23,284 21,564 4,008 3,520
Revenue 38,045 38,548 3,389 2,947
Profit for the year 6,100 6,546 697 867
Group's share of profit for the year 3,050 3,273 488 607
The financial statements of RLS have been prepared on the basis of Slovenian
Accounting Standards.
The financial statements of MSP have been prepared on the basis of FRS 102.
14. Leases (as lessor)
The Group acts as a lessor for Renishaw-manufactured equipment on finance and
operating lease arrangements. This is principally for high-value capital
equipment such as our additive manufacturing machines.
Accounting policy
Where the Group transfers the risks and rewards of ownership of lease assets
to a third party, the Group recognises a receivable in the amount of the net
investment in the lease. The lease receivable is subsequently reduced by the
principal received, while an interest component is recognised as financial
income in the Consolidated income statement. Standard contract terms are up to
five years and there is a nominal residual value receivable at the end of the
contract.
Where the Group retains the risks and rewards of ownership of lease assets, it
continues to recognise the leased asset in Property, plant and equipment.
Income from operating leases is recognised on a straight-line basis over the
lease term and recognised as revenue rather than other revenue as such income
is not material. Operating leases are on one to five year terms.
The total future lease payments are split between the principal and interest
amounts below:
2025 2024
Gross investment Net investment Gross investment £'000 Net investment
£'000 Interest £'000 Interest £'000
£'000 £'000
Receivable in less than one year 6,027 832 5,195 4,761 900 3,861
Receivable between one and two years 5,416 572 4,844 5,903 765 5,138
Receivable between two and three years 4,120 317 3,803 4,038 347 3,691
Receivable between three and four years 2,669 154 2,515 2,072 138 1,934
Receivable between four and five years 803 15 788 1,264 83 1,181
Total future minimum lease payments receivable 19,035 1,890 17,145 18,038 2,233 15,805
Finance lease receivables are presented as £11.9m (2024: £11.9m) non-current
assets and £5.2m (2024: £3.9m) current assets in the Consolidated balance
sheet.
The total of future minimum lease payments receivable under non-cancellable
operating leases were:
2025 2024
£'000 £'000
Receivable in less than one year 1,138 1,042
Receivable between one and four years 1,323 707
Total future minimum lease payments receivable 2,461 1,749
During the year, £1.4m (2024: £1.2m) of operating lease income was
recognised in revenue.
15. Cash and cash equivalents and bank deposits
We have always valued having cash in the bank to protect the Group from
downturns and enable us to react swiftly to investment or market capture
opportunities. We currently hold significant cash and cash equivalents and
bank deposits, mostly in the UK and spread across several banks with high
credit ratings.
Accounting policy
Cash and cash equivalents comprise cash balances, and deposits with an
original maturity of less than three months or with an original maturity date
of more than three months where the deposit can be accessed on demand without
significant penalty for early withdrawal and where the original deposit amount
is recoverable in full.
Cash and cash equivalents
An analysis of cash and cash equivalents at the end of the year was:
2025 2024
£'000 £'000
Bank balances and cash in hand 87,138 75,090
Short-term deposits 282 47,203
Balance at the end of the year 87,420 122,293
Bank deposits
Bank deposits at the end of the year amounted to £186.2m (2024: £95.5m), of
which £60.0m matures in July 2025, £21.0m matures in September 2025, £69.2m
matures in December 2025, £0.8m in January 2026, £1.0m in February 2026,
£30.0m in May 2026 and £4.2m in June 2026.
During the year bank deposits of £95.5m matured, of which £50.0m matured in
December 2024 and £43.0m in May 2025.
16. Inventories
We have continued to focus on our inventory holding requirements, with a small
reduction in total inventories, and remain committed to high customer delivery
performance.
Accounting policy
Inventory and work in progress is valued at the lower of actual cost on a
first-in, first-out (FIFO) basis and net realisable value. In respect of work
in progress and finished goods, cost includes all production overheads and the
attributable proportion of indirect overhead expenses that are required to
bring inventories to their present location and condition. Overheads are
absorbed into inventories on the basis of normal capacity or on actual hours
if higher.
Key estimate - Determination of net realisable inventory value
Determining the net realisable value of inventory requires management to
estimate future demand, especially in respect of provisioning for slow moving
and potentially obsolete inventory. When calculating an inventory provision
management generates an estimate of future demand for individual inventory
items (capped at 3 years) based upon the higher of 12 months of historical
usage or 12 months of demand from customer orders and manufacturing build
plans. A 50% provision is calculated where actual holdings represent between 3
to 5 years' worth of future demand, and 100% is calculated where actual
holdings represent over 5 years' worth of future demand. Adjustments are made
where needed, for example where it is highly likely that there will be an
increase in sales beyond the 12-month demand period or where there are
obsolescence programmes.
An analysis of inventories at the end of the year was:
2025 2024
£'000 £'000
Raw materials 56,911 53,542
Work in progress 31,623 32,840
Finished goods 70,931 75,546
Balance at the end of the year 159,465 161,928
At the end of the year, the gross cost of inventories which had provisions
held against them totalled £29.4m (2024: £29.6m). During the year, the
amount of write-down of inventories recognised as an expense in the
Consolidated income statement was £1.0m (2024: £6.2m).
Inventories in Renishaw plc account for 61% (2024: 63%) of the total
Inventories of the Group. A 10% reduction in the estimate of future demand for
all Renishaw plc inventory items would result in an increase in the inventory
provision of £0.4m (2024: £0.6m).
17. Provisions
A provision is a liability recorded in the Consolidated balance sheet, where
there is uncertainty over the timing or amount that will be paid.
Accounting policy
The Group provides a warranty from the date of purchase, except for those
products that are installed by the Group where the warranty starts from the
date of completion of the installation. This is typically for a 12-month
period, although up to three years is given for a small number of products. A
warranty provision is included in the Group financial statements, which is
calculated on the basis of historical returns and internal quality reports.
Warranty provision movements during the year were:
Warranty Other
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Balance at the beginning of the year 2,997 2,758 - -
Created during the year 3,281 2,633 6,152 -
Unused amounts reversed (924) - - -
Utilised in the year (2,528) (2,394) - -
(171) 239 6,152 -
Balance at the end of the year 2,826 2,997 6,152 -
The warranty provision has been calculated on the basis of historical
return-in-warranty information and other internal reports. It is expected
that most of this expenditure will be incurred in the next financial year and
all expenditure will be incurred within three years of the balance
sheet date.
Other provisions comprises interest payable liabilities of £4,852,000 for
historical and non-recurring tax matters, see Note 7 for further details, and
an onerous contract provision of £1,300,000.
18. Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods,
capital equipment and/or services to a customer for which the Group has either
received consideration or consideration is due from the customer. Our balances
mostly comprise advances received from customers and payments for services yet
to be completed.
Balances at the end of the year were: 2025 2024
£'000 £'000
Goods, capital equipment and installation 813 210
Aftermarket services 8,251 6,955
Deferred revenue 9,064 7,165
Advances received from customers 5,605 3,715
Balance at the end of the year 14,669 10,880
The aggregate amount of the transaction price allocated to performance
obligations that are unsatisfied at the end of the year is £14.7m (2024:
£10.9m). Of this, £1.5m (2024: £1.4m) is not expected to be recognised in
the next financial year.
19. Other payables
Separate to our trade payables and contract liabilities, which directly relate
to our trading activities, our Other payables mostly comprises amounts payable
to employees, or relating to employees.
Balances at the end of the year were:
2025 2024
£'000 £'000
Payroll taxes and social security 7.484 6,477
Performance bonuses 11,047 9,990
Holiday pay and retirement accruals 11,091 9,397
Indirect tax payable 5,278 5,163
Deferred research and development tax credit ('RDEC') 1,131 -
Other creditors and accruals 21,101 19,317
Total other payables 57,132 50,344
Holiday pay accruals are based on a calculation of the number of days' holiday
earned during the year, but not yet taken. Deferred research and development
tax credit ('RDEC') relates to amounts received for capitalised development
costs which cannot be recognised, see Note 4 for further details.
Other creditors and accruals includes a number of other individually smaller
accruals.
20. Borrowings
The Group's only source of external borrowing is a fixed-interest loan
facility in our Japanese subsidiary, entered into to directly finance the
purchase of a new distribution facility in Japan in FY2019.
Third-party borrowings at 30 June 2025 consist of a loan entered into on 31
May 2019 by Renishaw KK, with original principal of JPY 1,447,000,000
(£10,486,000). Principal of JPY 12,000,000 is repayable each month, with a
fixed interest rate of 0.81% also paid on monthly accretion for the first five
years. This loan was extended for an additional five years in May 2024, with a
fixed interest rate of 1.41% payable for the remaining term, at which time the
principal will have been repaid in full. There are no covenants attached
to this loan.
Movements during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year 3,522 4,694
Interest 49 36
Repayments (794) (799)
Currency adjustment 107 (409)
Balance at the end of the year 2,884 3,522
Borrowings are held at amortised cost. There is no significant difference
between the book value and fair value of borrowings, which is estimated by
discounting contractual future cash flows, which represents level 2 of the
fair value hierarchy defined in Note 25.
21. Leases (as lessee)
The Group leases distribution properties and cars from third parties and
recognises an associated lease liability for the total present value of
payments the lease contracts commit us to.
Accounting policy
At the commencement date of a lease arrangement the Group recognises a
right-of-use asset for the leased item and a lease liability for any payments
due. Lease liabilities are initially measured at the present value of the
lease payments that are not paid at the commencement date, discounted using
the incremental borrowing rate of the applicable entity. The lease liability
is subsequently measured at amortised cost using the effective interest method
and is remeasured if there is a change in future lease payments arising from a
change in an index or rate (such as an inflation-linked increase) or if there
is a change in the Group's assessment of whether it will exercise an extension
or termination option. When this happens there is a corresponding adjustment
to the right-of-use asset. Where the Group enters into leases with a lease
term of 12-months or less, these are treated as 'short-term' leases and are
recognised on a straight-line basis as an expense in the Consolidated income
statement. The same treatment applies to low-value assets, which are typically
IT equipment and office equipment.
Undiscounted future lease liabilities are analysed as below:
2025 Leasehold property Plant and equipment Motor
£'000 £'000 vehicles Total
£'000 £'000
Due in less than one year 2,490 34 1,985 4,509
Due between one and two years 2,110 18 1,303 3,431
Due between two and three years 1,667 12 501 2,180
Due between three and four years 1,135 11 80 1,226
Due between four and five years 182 4 2 188
Due in more than five years 4,358 - - 4,358
Total future minimum lease payments payable 11,942 79 3,871 15,892
Effect of discounting (2,916) (4) (211) (3,131)
Lease liability 9,026 75 3,660 12,761
2024 Leasehold property Plant and equipment Motor
£'000 £'000 vehicles Total
£'000 £'000
Due in less than one year 2,396 36 2,161 4,593
Due between one and two years 2,137 22 1,816 3,975
Due between two and three years 1,862 7 1,035 2,904
Due between three and four years 1,549 1 205 1,755
Due between four and five years 1,001 - 8 1,009
Due in more than five years 4,454 - - 4,454
Total future minimum lease payments payable 13,399 66 5,225 18,690
Effect of discounting (3,311) (2) (355) (3,668)
Lease liability 10,088 64 4,870 15,022
Lease liabilities are also presented as a £4.0m (2024: £4.0m) current
liability and a £8.8m (2024: £11.1m) non-current liability in the
Consolidated balance sheet.
Amounts recognised in the Consolidated income statement relating to leases
were:
2025 2024
£'000 £'000
Depreciation of right-of-use assets 4,633 4,653
Interest expense on lease liabilities 685 537
Expenses relating to short-term and low-value leases 395 138
Total expense recognised in the Consolidated income statement 5,713 5,328
Total cash outflows for leases 5,364 5,034
22. Changes in liabilities arising from financing activities
£000 1 July 2024 Cash flows Other Currency 30 June 2025
Lease liabilities 15,022 (4,284) 2,564 (541) 12,761
Borrowings 3,522 (794) 49 107 2,884
18,544 (5,078) 2,612 (434) 15,644
£000
1 July 2023 Cash flows Other Currency 30 June 2024
Lease liabilities 8,633 (4,359) 10,967 (219) 15,022
Borrowings 4,694 (799) 36 (409) 3,522
13,327 (5,158) 11,003 (628) 18,544
See Notes 20 and 21 for further details on borrowing and leasing activities.
23. Employee benefits
The Group operates contributory pension schemes for UK, Ireland and German
employees which are of the defined benefit type. The UK and Ireland schemes
were closed to new members on 5 April 2007 and 31 December 2007 respectively,
at which time they ceased any future accrual for existing members. The German
scheme closed to new members on 30 June 2012, however the scheme is open to
future accrual for existing members. The Group's largest defined benefit
scheme is in the UK.
Accounting policy
Defined benefit pension schemes are managed by trustees who are independent of
the Group finances. Investment assets of the schemes are measured at fair
value using the bid price of the unitised investments, quoted by the
investment manager, at the reporting date. For buy-in insurance contracts,
where the income received from a policy matches exactly the benefit payments
due to the members it is covering, the value attributable to the contract to
be recognised as an asset is the equivalent IAS 19 value of the corresponding
liabilities. Reimbursement assets are measured at fair value, quoted by the
insurance company, at the reporting date. Reimbursement assets are not
classified as a plan asset as they are not a qualifying insurance policy.
Pension scheme liabilities are measured using a projected unit method and
discounted at the current rate of return on a high-quality corporate bond
of equivalent term and currency to the liability. Remeasurements arising from
defined benefit schemes comprise actuarial gains and losses, the return on
scheme assets (excluding interest) and the effect of the asset ceiling
(if any, excluding interest). The Company recognises them immediately in
Other comprehensive income and all other expenses related to defined benefit
schemes are included in the Consolidated income statement.
The pension schemes' surpluses, to the extent that they are considered
recoverable, or deficits are recognised in full and presented on the face of
the Consolidated balance sheet under Employee benefits. Where a guarantee is
in place in relation to a pension scheme deficit, liabilities are reported in
accordance with IFRIC 14 'The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction'. To the extent that contributions
payable will not be available as a refund after they are paid into the plan, a
liability is recognised at the point the obligation arises, which is the point
at which the minimum funding guarantee is agreed. Overseas-based employees are
covered by a combination of state, defined benefit and private pension schemes
in their countries of residence. Actuarial valuations of overseas pension
schemes were not obtained, apart from Ireland and Germany.
For defined contribution schemes, the amount charged to the Consolidated
income statement represents the contributions payable to the schemes in
respect of the accounting period.
Key estimate - Valuation of defined benefit pension schemes' liabilities
Determining the value of the future defined benefit obligation requires
estimation in respect of the assumptions used to determine the present values.
These include future mortality, discount rate and inflation. Management makes
these estimates in consultation with independent actuaries.
Key judgement - Whether past service costs need to be recognised
Management also need to determine the appropriate accounting treatment for
past service costs, and do so in consultation with independent legal advisors
and actuaries.
The total pension cost of the Group for the year was £29.3m (2024: £27.9m),
of which £0.1m (2024: £0.1m) related to Directors and £6.2m (2024: £6.5m)
related to overseas schemes. The latest full actuarial valuation of the UK
defined benefit pension scheme ('UK scheme') was carried out as at 30
September 2021 and updated to 30 June 2025 by a qualified independent actuary.
The full actuarial valuation as at 30 September 2024 is in progress.
The Group operates a defined benefit pension scheme for certain employees
within Germany. An error has been identified with the Group's classification
of the German pension scheme as a defined contribution scheme, as opposed to a
defined benefit scheme, following a request for funding from the pension
scheme support fund. In line with IAS 8, the Group has restated balances as at
30 June 2024 and 1 July 2023. The actuarial valuation of the liabilities has
been prepared by a qualified actuary.
The mortality assumption used for FY2025 is the S3PxA base tables and CMI
2023 model, with long-term improvements of 1% per annum. Adjustments have
been made to both the core base tables and CMI 2023 model to allow for the
scheme's membership profile and best estimate assumptions of future mortality
improvements. The CMI 2024 model was released on 30 June 2025,
we will adopt this model as part of our mid-year accounting at 31 December
2025.
Major assumptions used by actuaries for the UK, Ireland and German schemes
were:
30 June 2025 30 June 2024
UK scheme Ireland scheme Germany scheme UK scheme Ireland scheme Germany scheme
Discount rate 5.55% 4.00% 3.90% 5.10% 3.75% 3.70%
Rate of increase in pension payments 2.85% 2.25% 2.00% 2.95% 2.50% 2.00%
Rate of increase in salary n/a n/a 2.50% n/a n/a 2.50%
Inflation rate (RPI) 3.05% 2.25% n/a 3.25% 2.50% n/a
Inflation rate (CPI) 2.05%(1) 2.25%(1)
3.05%(2) 2.25% 2.00% 3.25%(2) 2.50% 2.00%
Retirement age 65 65 67 64 65 67
1. Pre-2030 2. Post-2030
The major assumptions used by actuaries for the German scheme to calculate the
liability at 1 July 2023 were consistent with the assumptions used at 30 June
2024.
The life expectancies from the retirement age of 65 for the UK scheme implied
by the mortality assumption at age 65 and 45 are:
2025 2024
years years
Male currently aged 65 21.1 21.1
Female currently aged 65 23.5 23.5
Male currently aged 45 21.8 21.8
Female currently aged 45 24.4 24.4
The weighted average duration of the UK scheme obligation is around years 15
years (2024: 16 years).
The assets and liabilities in the defined benefit schemes were:
30 June 2025 £'000 % of total assets 30 June 2024 £'000 % of total assets
Market value of assets:
Insurance contract 118,158 83 129,207 84
Credit and fixed income funds 7,924 6 9,268 6
Index linked gilts 5,815 4 1,269 1
Multi-asset funds 4,640 3 5,869 4
Equities 4,295 3 6,861 4
Cash and other 781 1 660 -
141,613 100 153,134 100
Actuarial value of liabilities (151,301) (163,638) -
Deficit in the schemes (9,688) (10,504) -
Deferred tax thereon 3,748 3,746 -
Note C.45, within the annual report, gives the analysis of the UK scheme. For
the Ireland scheme, the market value of assets at the end of the year was
£14.8m (2024: £14.0m) and the actuarial value of liabilities was £11.0m
(2024: £11.9m). The UK scheme was in a net surplus position at 30 June 2025
totalling £7.6m (2024: surplus £8.7m), and is therefore presented in
non-current assets in the Consolidated balance sheet. The Ireland scheme was
in a net asset position at 30 June 2025 totalling £3.8m (2024: £2.1m), and
is therefore also presented in non-current assets. For the German scheme, the
actuarial value of liabilities was £21.1m (2024: £21.3m), which is presented
gross in non-current liabilities. The German scheme does not have any plan
assets, rather a reimbursement right asset of £12.9m (2024: £12.1m) which is
separately disclosed in the Consolidated balance sheet in assets.
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 is held in the name of
the Trustee. The value of the contract is recognised as a UK scheme asset for
the purposes of IAS 19. In line with IAS 19.115, for a buy-in insurance
contract such as this, where the income received from the policy matches
exactly the benefit payments due to the members it is covering, the value
attributable to the contract to be recognised as an asset is the equivalent
IAS 19 value of the corresponding liabilities.
Equities are held in externally-managed funds and primarily relate to UK and
US equities. Credit and fixed income funds, and index linked gilts relate to
UK, US and Eurozone government-linked securities, again held in
externally-managed funds. The fair values of these equity and fixed income
instruments are determined using the bid price of the unitised investments,
quoted by the investment manager, at the reporting date and therefore
represent level 2 of the fair value hierarchy defined in Note 25. Multi-asset
funds are also held in externally-managed funds, with active asset allocation
to diversify growth across asset classes such as equities, bonds and
money-market instruments. The fair value of these funds is determined on a
comparable basis to the equity and fixed income funds, and therefore are also
level 2 assets. Cash and other at 30 June 2025 mostly comprises amounts held
in a Sterling bank account, in which the principal is preserved and same day
liquidity is available.
No scheme assets are directly invested in the Group's own equity.
The movements in the schemes' assets, liabilities and reimbursement right
were:
Reimbursement Assets Liabilities Total
right
Year ended 30 June 2025 £'000 £'000 £'000 £'000
Balance at the beginning of the year 12,116 153,134 (163,638) 1,612
Contributions paid - 162 - 162
Interest on pension schemes - 7,465 (6,962) 503
Remeasurement gain/(loss) under IAS 19 1,498 (12,267) 13,546 2,777
Scheme administration expenses (705) (1,128) - (1,833)
Benefits paid - (5,753) 5,753 -
Balance at the end of the year 12,909 141,613 (151,301) 3,221
Reimbursement Assets Liabilities Total
right
Year ended 30 June 2024 £'000 £'000 £'000 £'000
Balance at the beginning of the year 11,348 196,329 (159,451) 48,226
Contributions paid - 161 - 161
Interest on pension schemes - 9,581 (6,673) 2,908
Remeasurement gain/(loss) under IAS 19 768 (45,054) (4,490) (48,776)
Scheme administration expenses - (907) - (907)
Benefits paid - (6,976) 6,976 -
Balance at the end of the year 12,116 153,134 (163,638) 1,612
The analysis of the amount recognised in the Consolidated statement of
comprehensive income and expense was:
2025 2024
£'000 £'000
Actuarial gain/(loss) arising from:
- Changes in demographic assumptions - 35
- Changes in financial assumptions 14,857 775
- Experience adjustment 187 (4,532)
Return on plan assets excluding interest income (12,267) (45,054)
Total amount recognised in the Consolidated statement of comprehensive income and expense 2,777 (48,776)
The cumulative amount of actuarial gains and losses recognised in the
Consolidated statement of comprehensive income and expense was a loss of
£63.9m (2024: loss of £66.7m).
The net surplus of the Group's defined benefit pension schemes, including the
reimbursement right, on an IAS 19 basis, has increased from £1.6m at 30 June
2024 to £3.2m at 30 June 2025, primarily as a result of actuarial movements.
For the UK scheme, the latest actuarial report prepared in September 2021
shows a deficit of £52.8m, which is based on funding to self-sufficiency and
uses prudent assumptions. IAS 19 requires best estimate assumptions to be
used, resulting in the IAS 19 net surplus being higher than the actuarial
deficit.
The existing deficit funding plan for the UK scheme is in place until 30 June
2031, at which time any outstanding deficit will be paid. The agreement will
end sooner if the actuarial deficit (calculated on a self-sufficiency basis)
is eliminated in the meantime. The net book value of properties subject to
fixed charges under this agreement at 30 June 2025 was £48.7m (2024:
£45.9m).
The charges may be enforced by the Trustees if one of the following occurs:
(a) the Company does not pay funds into the scheme in line with the agreed
plan; (b) an insolvency event occurs in relation to the Company; or (c) the
Company does not pay any deficit at 30 June 2031.
Under the Ireland defined benefit pension scheme deficit funding plan, a
property owned by Renishaw Ireland (DAC) is subject to a registered fixed
charge to secure the Ireland defined benefit pension scheme's deficit.
For the UK scheme, a guide to the sensitivity of the value of the respective
liabilities is as follows:
Approximate
Variation effect on liabilities
UK - discount rate Increase/decrease by 0.5% -£10.2m/+£11.4m
UK - future inflation Increase/decrease by 0.5% +£7.7m/-£7.8m
UK - mortality Increased/decreased life by one year +£5.7m/-£4.5m
Benefits in the UK Fund 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 Fund 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 the 30 June 2025 financial statements, 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 historical 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. In June 2025, the
UK Government announced it will introduce legislation to allow affected
pension schemes to retrospectively obtain written actuarial confirmation that
historical benefit changes met the necessary standards. 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. The Trustee and Company continue to seek legal advice on this
matter and will act appropriately to obtain retrospective actuarial
confirmation where appropriate. At the date of approving these financial
statements, the possible implications, if any, for the UK scheme not having
all Section 37 certificates have not been investigated in detail. Accordingly,
no amendments for this matter have been included in the IAS 19 actuarial
valuation as the impact, if any, cannot be reliably assessed.
Reimbursement right
The Group has recognised a reimbursement right in respect of its pension
obligation for the German scheme. At 30 June 2025, the value of reimbursement
right is £12,909,000 (2024: £12,116,000). This asset relates to an insurance
policy that reimburses the Group for pension payments made to scheme members.
The reimbursement right is not classified as a plan asset as it is not a
qualifying insurance policy. The insurance policy is held with a regulated
insurer and covers a portion of the pension benefits payable under the plan.
The reimbursement right is considered virtually certain and has been measured
at fair value.
24. Share-based payments
The Group provides share-based payment arrangements to certain employees in
accordance with the Renishaw plc deferred annual equity incentive plan. The
Governance section, in the Annual Report, provides information of how these
awards are determined.
Accounting policy
Renishaw shares are granted in accordance with the Renishaw plc deferred
annual equity incentive plan (the DAEIP). The share awards are subject only to
continuing service of the employee and are equity settled. The fair value of
the awards at the date of grant, which is estimated to be equal to the market
value, is charged to the Consolidated income statement on a straight-line
basis over a three-year vesting period, with appropriate adjustments made to
reflect expected or actual forfeitures. The corresponding credit is to Other
reserve.
The number of shares to be awarded is calculated by dividing the relevant
amount of annual bonus under the DAEIP by the average price of a share during
a period determined by the Remuneration Committee of not more than five
dealing days ending with the dealing day before the award date. These shares
must be purchased on the open market and cannot be satisfied by issuance of
new shares or transfer of existing treasury shares.
The Renishaw Employee Benefit Trust (EBT) is responsible for purchasing shares
on the open market on behalf of the Company to satisfy the DAEIP awards. These
are held by the EBT until transferring to the employee, which will normally be
on the third anniversary of the award date, subject to continued employment.
Malus and clawback provisions can be operated by the Committee within five
years of the award date. During the vesting period, no dividends are payable
on the shares. However, upon vesting, employees will be entitled to additional
shares or cash, equivalent to the value of dividends paid on the awarded
shares during this period. This amount is accrued over the vesting period.
Own shares held are recognised as an element in equity until they are
transferred at the end of the vesting period, and such shares are excluded
from earnings per share calculations.
The total cost recognised in the FY2025 Consolidated income statement in
respect of the DAEIP was £0.8m (2024: £0.9m). See Note 26 for
reconciliations of amounts recognised in Equity.
In accordance with the DAEIP, shares equivalent to £0.9m (2024: £0.2m) are
to be awarded in respect of FY2025.
25. Financial instruments
The Group has exposure to credit risk, liquidity risk and market risk arising
from its use of financial instruments. This note presents information about
the Group's exposure to these risks, along with the Group's objectives,
policies and processes for measuring and managing the risks.
Accounting policy
The Group measures financial instruments such as forward exchange contracts at
fair value at each balance sheet date in accordance with IFRS 9 'Financial
Instruments'. Fair value, as defined by IFRS 13 'Fair Value Measurement', is
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. This note provides detail on the IFRS 13 fair value
hierarchy.
Trade and other current receivables are initially recognised at fair value and
are subsequently held at amortised cost less any provision for bad and
doubtful debts and expected credit losses according to IFRS 9. Trade and other
current payables are initially recognised at fair value and are subsequently
held at amortised cost.
Financial liabilities in the form of loans are initially recognised at fair
value and are subsequently held at amortised cost. Financial liabilities are
assessed for embedded derivatives and whether any such derivatives are closely
related. If not closely related, such derivatives are accounted for at fair
value in the Consolidated income statement.
Foreign currency derivatives are used to manage risks arising from changes in
foreign currency rates relating to overseas sales and foreign
currency-denominated assets and liabilities. The Group does not enter into
derivatives for speculative purposes. Foreign currency derivatives are stated
at their fair value, being the estimated amount that the Group would pay or
receive to terminate them at the balance sheet date, based on prevailing
foreign currency rates.
Changes in the fair value of foreign currency derivatives which are designated
and effective as hedges of future cash flows are recognised in Other
comprehensive income and in the Cash flow hedging reserve, and subsequently
transferred to the carrying amount of the hedged item or the Consolidated
income statement. Realised gains or losses on cash flow hedges are therefore
recognised in the Consolidated income statement within revenue in the same
period as the hedged item.
Hedge accounting is discontinued when the hedging instrument expires or when
the hedging instrument or hedged item no longer qualify for hedge accounting.
If the forecast transaction is still expected to occur, but is no longer
highly probable, the cumulative gain or loss in the cash flow hedge reserve
remains in that reserve until the transaction occurs. If the forecast
transaction is no longer expected to occur, the cumulative gain or loss in the
cash flow hedge reserve is immediately reclassified to the Consolidated income
statement.
Changes in fair value of foreign currency derivatives, which are ineffective
or do not meet the criteria for hedge accounting in IFRS 9, are recognised in
the Consolidated income statement within Gains/losses from the fair value of
financial instruments.
In addition to derivatives held for cash flow hedging purposes, the Group uses
short-term derivatives not designated as hedging instruments to offset gains
and losses from exchange rate movements on foreign currency-denominated assets
and liabilities. Gains and losses from currency movements on underlying assets
and liabilities, realised gains and losses on these derivatives, and fair
value gains and losses on outstanding derivatives of this nature are all
recognised in Financial income and expenses in the Consolidated income
statement.
Key estimate - Estimates of highly probable forecasts of the hedged item.
Derivatives are effective for hedge accounting to the extent that the hedged
item is 'highly probable' to occur, with 'highly probable' indicating a much
greater likelihood of occurrence than the term 'more likely than not'.
Determining a highly probable sales forecast for Renishaw plc and Renishaw UK
Sales Limited, being the hedged item, over a multiple year time period,
requires judgement of the suitability of external and internal data sources
and estimations of future sales.
Fair value
There is no significant difference between the fair value of financial assets
and financial liabilities and their carrying value in the Consolidated balance
sheet. All financial assets and liabilities are held at amortised cost, apart
from the forward foreign currency exchange contracts, which are held at fair
value, with changes going through the Consolidated income statement unless the
contracts are subject to hedge accounting.
The fair values of the forward foreign currency 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. The IFRS 13 level categorisation
relates to the extent the fair value can be determined by reference to
comparable market values. The classifications are: level 1 where instruments
are quoted on an active market; level 2 where the assumptions used to arrive
at fair value have comparable market data; and level 3 where the assumptions
used to arrive at fair value do not have comparable market data.
Credit risk
The Group's liquid funds are substantially held with banks with high credit
ratings and the credit risk relating to these funds is therefore limited. The
Group carries a credit risk relating to non-payment of trade receivables by
its customers. The Group's policy is that credit evaluations are carried out
on all new customers before credit is given above certain thresholds. Risk is
spread across a large number of customers with no significant concentration
with one customer or in any one geographical area. The Group establishes an
allowance for impairment in respect of trade receivables where recoverability
is considered doubtful.
An analysis by currency of the Group's financial assets at the year end is as
follows:
Trade and finance lease receivables Other receivables Cash and cash equivalents and bank deposits
2025 2024 2025 2024 2025 2024
Currency £'000 £'000 £'000 £'000 £'000 £'000
Pound Sterling 17,076 17,258 30,438 24,807 223,491 168,781
US Dollar 50,034 57,209 970 1,613 11,322 8,261
Euro 30,669 30,699 3,525 2,320 5,153 10,532
Chinese Yuan 13,592 11,179 512 574 17,069 11,284
Japanese Yen 13,181 13,135 136 144 2,730 3,358
Other 21,057 20,398 5,151 4,618 13,881 15,619
145,609 149,878 40,732 34,076 273,646 217,835
The above Trade and finance lease receivables, Other receivables and Cash and
cash equivalents bank deposits are predominately held in the functional
currency of the relevant entity, with the exception of £13.2m (2024: £21.3m)
of US Dollar-denominated trade receivables being held in Renishaw (Hong Kong)
Limited and £1.6m (2024: £1.6m) of Euro-denominated trade receivables being
held in Renishaw UK Sales Limited, along with some foreign currency cash
balances which are of a short-term nature.
The ageing of trade receivables past due at the end of the year was:
2025 2024
£'000 £'000
Past due zero to one month 13,601 13,250
Past due one to two months 5,935 7,763
Past due more than two months 8,538 13,041
Balance at the end of the year 28,074 34,054
Movements in the provision for impairment of trade receivables during the year
were:
2025 2024
£'000 £'000
Balance at the beginning of the year 4,479 3,438
Changes in amounts provided 3,215 2,264
Amounts used (1,800) (1,223)
Balance at the end of the year 5,894 4,479
The Group applies the simplified approach when measuring the expected credit
loss for trade receivables, with a provision matrix used to determine a
lifetime expected credit loss.
For this provision matrix, trade receivables are grouped into credit risk
categories, with category 1 being the lowest risk and category 5 the highest.
Risk scores are allocated to the customer's country of operation, their type
(such as distributor, end user and OEM), their industry and the proportion of
their debt that was past due at the year-end. These scores are then weighted
to produce an overall risk score for the customer, with the lowest scores
being allocated to category 1 and the highest scores to category 5. The matrix
then applies an expected credit loss rate to each category, with this rate
being determined by adjusting the Group's historic credit loss rates to
reflect forward-looking information.
Where certain customers have been identified as having a significantly
elevated credit risk these have been provided for on a specific basis. Both
elements of expected credit loss are shown in the matrix below and have been
shown separately so as not to distort the expected credit loss rate.
Risk category 1 Risk category 2 Risk category 3 Risk category 4 Risk category 5 2025
Total
Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000 £'000
Gross trade receivables 14,397 31,663 82,780 5,518 - 134,358
Expected credit loss rate 0.55% 0.61% 0.66% 0.71% - 0.52%
Expected credit loss allowance 80 192 531 39 - 842
Specific loss allowance - - 4,730 322 - 5,052
Total loss allowance 80 192 5,261 361 - 5,894
Net trade receivables 14,317 31,471 77,519 5,157 - 128,464
Risk category 1 Risk category 2 Risk category 3 Risk category 4 Risk category 5 2024
Total
Year ended 30 June 2024 £'000 £'000 £'000 £'000 £'000 £'000
Gross trade receivables 14,215 38,781 84,049 1,508 - 138,553
Expected credit loss rate 0.46% 0.50% 0.54% 0.58% - 0.52%
Expected credit loss allowance 65 193 447 9 - 714
Specific loss allowance - 4 3,440 322 - 3,766
Total loss allowance 65 197 3,887 331 - 4,480
Net trade receivables 14,150 38,584 80,162 1,177 - 134,073
Finance lease receivables are subject to the same approach as noted above for
trade receivables.
Derivative assets are assessed based on the credit risk of the banks
counterparty to the forward contracts.
Other receivables include mostly prepayments and indirect tax receivables.
Prepayment balances are reviewed at each reporting date to confirm that
prepaid goods or services are still expected to be received, while tax
balances are reviewed for recoverability.
Other receivables at the year end comprised:
2025 2024
£'000 £'000
Indirect tax receivable 10,959 7,206
Software maintenance 10,181 7,816
Grants 885 875
Research and development tax credit ('RDEC') recoverable 1,224 4,969
Contract assets 1,509 309
Other prepayments 15,974 12,901
Total other receivables 40,732 34,076
The maximum exposure to credit risk is £482.2m (2024: £416.7m), comprising
the Group's trade, finance and other receivables, cash and cash equivalents
and bank deposits, and derivative assets.
The maturities of non-current other receivables, being only derivatives, at
the year end were:
2025 2024
£'000 £'000
Receivable between one and two years 7,878 1,387
Receivable between two and five years - -
7,878 1,387
Liquidity risk
Our 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.
With Cash and cash equivalents and bank deposits at 30 June 2025 totalling
£273.6m and £147.9m cash flows generated from operating activities in the
period, the Group remains in a strong liquidity position.
In respect of Cash and cash equivalents and bank deposits, the carrying value
is materially the same as fair value because of the short maturity of the bank
deposits. Bank deposits are affected by interest rates that are either fixed
or floating, which can change over time, affecting the Group's interest
income. A decrease of 1% in interest rates would result in a reduction in
interest income of approximately £2.5m.
The contractual maturities of financial liabilities at the year end were:
Contractual cash flows
Carrying amount Effect of discounting Gross maturities Up to 1-2 2-5
1 year years years
Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000 £'000
Trade payables 25,943 - 25,943 25,943 - -
Other payables 57,132 - 57,132 57,132 - -
Borrowings 2,884 85 2,969 764 754 1,451
Forward exchange contracts 1,246 - 1,246 150 1,096 -
87,205 85 87,290 83,989 1,850 1,451
Contractual cash flows
Carrying Effect of discounting Gross Up to 1-2 2-5
amount maturities 1 year years years
Year ended 30 June 2024 £'000 £'000 £'000 £'000 £'000 £'000
Trade payables 21,330 - 21,330 21,330 - -
Other payables 50,344 - 50,344 50,344 - -
Borrowings 3,522 138 3,660 756 745 2,159
Forward exchange contracts 625 - 625 448 177 -
75,821 138 75,959 72,878 922 2,159
Market risk
The Group operates in several foreign currencies with the majority of sales
being made in these non-Sterling currencies, but with most manufacturing being
undertaken in the UK, Ireland and India.
A large proportion of sales are made in US Dollar, Euro and Japanese Yen,
therefore the Group enters into US Dollar, Euro and Japanese Yen derivative
financial instruments to manage its exposure to foreign currency risk,
including:
i. forward foreign currency exchange contracts to hedge a significant
proportion of the Group's forecasted US Dollar, Euro and Japanese Yen revenues
over the next 24 months; and
ii. one-month forward foreign currency exchange contracts to offset the
gains/losses from exchange rate movements arising from foreign
currency-denominated intragroup balances of the Company held in US Dollar,
Euro, Japanese Yen and Canadian Dollar.
The amounts of foreign currencies relating to these forward contracts and
options are, in Sterling terms:
2025 2024
Nominal value Fair value Nominal value Fair value
£'000 £'000 £'000 £'000
US Dollar 299,987 18,954 332,679 7,388
Euro 146,500 613 173,089 4,661
Japanese Yen 21,947 1,354 15,581 2,260
Canadian Dollar 5,133 56 - -
473,567 20,977 521,349 14,309
The following are the exchange rates which have been applicable during the
financial year:
2025 2024
Average forward contract rate Year end exchange rate Average exchange rate Average forward contract rate Year end exchange rate Average exchange rate
Currency
US Dollar 1.28 1.37 1.30 1.25 1.27 1.26
Euro 1.14 1.17 1.19 1.13 1.18 1.17
Japanese Yen 178 198 193 140 203 189
Canadian Dollar 1.85 1.87 1.82 - - -
Hedging
In relation to the forward currency contracts in a designated cash flow hedge,
the hedged item is a layer component of forecast sales transactions. Forecast
transactions are deemed highly probable to occur and Group policy is to hedge
around 75% of net foreign currency exposure for USD, EUR and JPY. The hedged
item creates an exposure to receive USD, EUR or JPY, while the forward
contract is to sell USD, EUR or JPY and buy GBP. Therefore, there is a strong
economic relationship between the hedging instrument and the hedged item. The
hedge ratio is 100%, such that, by way of example, £10m nominal value of
forward currency contracts are used to hedge £10m of forecast sales. Fair
value gains or losses on the forward currency contracts are offset by foreign
currency gain or losses on the translation of USD, EUR and JPY based sales
revenue, relative to the forward rate at the date the forward contracts were
arranged. Foreign currency exposures in HKD and USD are aggregated and only
USD forward currency contracts are used to hedge these currency exposures.
Sources of hedge ineffectiveness according to IFRS 9 Financial Instruments
include:
- changes in timing of the hedged item;
- reduction in the amount of the hedged sales considered to be highly
probable;
- a change in the credit risk of Renishaw or the bank counterparty to the
forward contract; and
- differences in assumptions used in calculating fair value.
No contracts have become ineffective during the period. A decrease of 10% in
the highly probable forecasts would result in no ineffective contracts.
For both the Group and the Company, the following table details the fair value
of these forward foreign currency derivatives according to the categorisations
of instruments noted previously:
2025 2024
Nominal value Fair value Nominal value Fair value
£'000 £'000 £'000 £'000
Forward currency contracts in a designated cash flow hedge (i)
Non-current derivative assets 137,417 7,878 140,109 1,387
Current derivative assets 218,870 13,606 245,577 13,338
Current derivative liabilities 19,339 (37) 790 -
Non-current derivative liabilities 33,559 (1,096) 54,852 (177)
409,185 20,351 441,328 14,548
Amounts recognised in the Consolidated statement of comprehensive income and
expense
- 5,804 - 5,812
Forward currency contracts not in a designated cash flow hedge (ii)
Current derivative assets 56,873 739 17,614 209
Current derivative liabilities 7,509 (113) 62,407 (448)
64,382 626 80,021 (239)
Amounts recognised in Financial income/(expense) in the Consolidated income
statement
- 3,360 - 318
Total forward contracts and options
Non-current derivative assets 137,417 7,878 140,109 1,387
Current derivative assets 275,743 14,345 263,191 13,547
Current derivative liabilities 26,848 (150) 63,197 (448)
Non-current derivative liabilities 33,559 (1,096) 54,852 (177)
473,567 20,977 521,349 14,309
The total recognised in Revenue in the Consolidated income statement relating
to cash flow hedges previously recognised through Other comprehensive income
amounted to £19.2m gain (2024: £0.1m gain).
For the Group's foreign currency forward contracts at the balance sheet date,
if Sterling appreciated by 5% against the US Dollar, Euro, Japanese Yen and
Canadian Dollar, this would increase pre-tax equity by £19.2m and increase
profit before tax by £3.1m, while a depreciation of 5% would decrease pre-tax
equity by £21.3m and decrease profit before tax by £3.4m.
26. Share capital and reserves
The Group defines capital as being the equity attributable to the owners of
the Company, which is captioned on the Consolidated balance sheet. The Board's
policy is to maintain a strong capital base, ensuring the security of the
Group, and to maintain a balance between returns to shareholders, with a
progressive dividend policy. This note presents figures relating to this
capital management, along with an analysis of all elements of Equity
attributable to shareholders and non-controlling interests.
Share capital
2025 2024
£'000 £'000
Allotted, called-up and fully paid 72,788,543 ordinary shares of 20p each 14,558 14,558
The ordinary shares are the only class of share in the Company. Holders of
ordinary shares are entitled to vote at general meetings of the Company and
receive dividends as declared. The Articles of Association of the Company do
not contain any restrictions on the transfer of shares nor on voting rights.
Dividends paid
Dividends paid comprised:
2025 2024
£'000 £'000
FY2024 final dividend paid of 59.4p per share (2023: 59.4p) 43,205 43,195
Interim dividend paid of 16.8p per share (2024: 16.8p) 12,219 12,217
Total dividends paid 55,424 55,412
A final dividend of 61.3p per share is proposed in respect of FY2025, which
will be payable on 5 December 2025 to shareholders on the register on 31
October 2025.
Own shares held
The EBT is responsible for purchasing shares on the open market on behalf of
the Company to satisfy the DAEIP awards, see Note 24 for further detail. Own
shares held are recognised as an element in equity until they are transferred
at the end of the vesting period.
Movements during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year (2,963) (2,963)
Acquisition of own shares (154) -
Disposal of own shares on vesting of awards 977 -
Balance at the end of the year (2,140) (2,963)
In November 2022, 54,582 shares were purchased on the open market by the EBT
at a price of £40.24, costing a total of £2,212,831. The fair value of these
awards at the grant date, being 26 October 2022, was £1,915,000. A total of
5,082 vested early in FY2025, based on the performance conditions being met.
The remaining shares will vest on 26 October 2025, with no forfeitures
expected at 30 June 2025.
In December 2024, 4,902 shares were purchased on the open market by the EBT at
a price of £31.40, costing a total of £153,923. The fair value of the awards
at the grant date, being 23 October 2024, was £162,177. A total of 656 vested
early in FY2025, based on the performance conditions being met. The remaining
shares will vest on 23 October 2027, with no forfeitures expected at 30 June
2025.
Other reserve
The other reserve relates to share-based payments charges according to IFRS 2
in relation to the DAEIP, along with historical amounts relating to
investments in subsidiary undertakings not eliminated on consolidation.
Movements during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year 1,380 497
Disposal of own shares on vesting of awards (977) -
Share-based payments charge in respect of shares vesting in 2024 80 245
Share-based payments charge in respect of shares vesting in 2025 656 638
Share-based payments charge in respect of shares vesting in 2027 54 -
Balance at the end of the year 1,193 1,380
Currency translation reserve
The currency translation reserve comprises all foreign exchange differences
arising from the translation of the financial statements of the overseas
operations and currency movements on intragroup loan balances classified as
net investments in overseas operations.
Movements during the year were: 2025 2024
£'000 £'000
Balance at the beginning of the year 2,480 6,772
Loss on net assets of foreign currency operations (6,295) (3,811)
Loss on intragroup loans classified as net investments in foreign operations - (227)
Tax on translation of net investments in foreign operations - 57
Loss in the year relating to subsidiaries (6,295) (3,981)
Currency exchange differences relating to joint ventures 169 (311)
Balance at the end of the year (3,646) 2,480
Cash flow hedging reserve
The cash flow hedging reserve, for both the Group and the Company, comprises
all foreign exchange differences arising from the valuation of forward
exchange contracts which are effective hedges and mature after the year end.
These are valued on a mark-to-market basis, are accounted for in Other
comprehensive income and expense and accumulated in Equity, and are recycled
through the Consolidated income statement and Company income statement when
the hedged item affects the income statement, or when the hedging relationship
ceases to be effective. See Note 25 for further detail.
Movements during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year 10,911 6,552
Losses on contract maturity recognised in revenue during the year 19,176 133
Revaluations during the year (13,372) 5,679
Deferred tax movement (1,451) (1,453)
Balance at the end of the year 15,264 10,911
Non-controlling interest
Movements during the year were:
2025 2024
£'000 £'000
Balance at the beginning of the year (577) (577)
Share of profit for the year - -
Balance at the end of the year (577) (577)
The non-controlling interest represents the minority shareholdings in Renishaw
Diagnostics Limited - 7.6%.
27. Capital commitments
At the end of a financial year, we typically have obligations to make payments
in the future, for which no provision is made in the financial statements. We
have committed to renovating and expanding our warehousing operation in
Germany, which includes expenditure on sustainability initiatives.
Authorised and committed capital expenditure at the end of the year were:
2025 2024
£'000 £'000
Freehold land and buildings 13,856 26,199
Plant and equipment 6,411 16,206
Motor vehicles 129 135
Total committed capital expenditure 20,396 42,540
28. Related parties
We report transactions with related parties, which mostly comprise our joint
venture companies, RLS and MSP.
Joint ventures and other related parties had the following transactions and
balances with the Group:
2025 2024
£'000 £'000
Purchased goods and services from the Group during the year 219 250
Sold goods and services to the Group during the year 22,794 23,026
Interest paid from the Group during the year 371 55
Paid dividends to the Group during the year 1,500 498
Amounts owed to the Group at the year end 223 243
Amounts owed by the Group at the year end 17,462 11,422
Amounts owed by the Group include a 14-day notice deposit agreement with RLS
for EUR 17.0m (£14.5m equivalent) (FY2024: £8.5m), see Note 13 for further
details. The total interest payable on amounts owed to joint ventures during
the year was £371,000 (FY2024: £55,000). There were no bad debts relating to
related parties written off during FY2025 or FY2024.
Sold goods and services to the Group during the year include an operating
lease arrangement with McMurtry Automotive Limited for a property owned by the
Group. The operating lease commenced on 1 April 2025 and has a 10-year term.
The rental income is £187,500 per annum. The property has been reclassified
to investment property in the Consolidated balance sheet, with the rental
income and direct operating expenses recognised in Consolidated income
statement. At 30 June 2025, rental income of £46,875 has been recognised,
with no amounts owed to the Group.
By virtue of a longstanding voting agreement, the estate of the late Sir David
McMurtry (Non-executive Director, 36.23% shareholding), and John Deer
(Non-executive Deputy Chairman, together with his wife, 16.59%), are the
ultimate controlling party of the Group. The only significant transactions
between the Group and these parties are in relation to their respective
remuneration, as detailed in the Governance Report of the Annual Report.
29. 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.
Key judgement - Whether items are appropriate to exclude from adjusted
measures
Our APM policy allows us to adjust for 'infrequently occurring events that can
significantly affect profit and earnings'. This year, we've had to carefully
consider the nature and intention of some events and transactions, to
determine whether they should be 'adjusted for'.
We continue to report Revenue at constant exchange rates, Adjusted profit
before tax, Adjusted earnings per share, Adjusted operating profit (including
by segment), Adjusted operating profit at constant exchange rates, Adjusted
cash flow conversion from operating activities, and Return on invested capital
as APMs. These are calculated consistently with previous years. Aside from
Revenue at constant exchange rates, all other APMs exclude infrequently
occurring events which impact our financial statements, recognised according
to applicable IFRS, that we believe should be excluded from these APMs to give
readers additional useful and comparable views of our underlying performance.
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.
2025 2024
Revenue at constant exchange rates: £'000 £'000
Statutory revenue as reported 713,044 691,301
Adjustment for forward contract (gains)/losses (19,176) (133)
Adjustment to restate current year at previous year exchange rates 23,119 -
Revenue at constant exchange rates 716,987 691,168
Year-on-year revenue growth at constant exchange rates 3.7% -
Year-on-year revenue growth at constant exchange rates for FY2024 was 3.7%.
Adjusted profit before tax, Adjusted profit after tax, Adjusted earnings per
share and Adjusted operating profit are defined as the profit before tax,
earnings per share and operating profit after excluding:
- costs relating to the closure of the drug delivery business (a);
- costs relating to the closure of the Edinburgh research facility (b);
- costs relating to the Other interest payable related to liabilities
recognised for historical and non-recurring tax matters (c); and
- costs related to the Taxation prior year adjustment related to historical
and non-recurring tax matters (c).
a) Restructuring costs, where applicable during the year, are excluded
from adjusted measures on the basis that they do not frequently recur. During
FY2025, the Group made the decision to close the drug delivery business, which
has resulted in costs of £2,059,000. The amount comprises redundancy payments
of £1,108,000, intangible asset impairment of £864,000 and other expenses of
£87,000. These amounts are recognised within Cost of sales, in Gross
engineering expenditure, within the Consolidated income statement.
b) Restructuring costs, where applicable during the year, are excluded
from adjusted measures on the basis that they do not frequently recur. During
FY2025, the Group made the decision to close the Edinburgh research facility,
which has resulted in costs of £2,320,000. The amount comprises redundancy
payments of £1,066,000, Property, plant and equipment impairment of £759,000
and Other payables of £495,000. These amounts are recognised within Cost of
sales, in Gross engineering expenditure, within the Consolidated income
statement.
c) There may be other items which do not frequently occur, for which it
may be appropriate to exclude from adjusted measures. During FY2025, the Group
recognised an interest charge of £4,852,000 and a Taxation charge of
£9,154,000 relating to historical and non-recurring tax matters. The tax
matters relate to specific legacy arrangements which we would not expect to
recur. Applicable accounting standards require a full provision for tax and
the associate interest, however, we continue to seek resolution to these
matters which would reduce these amounts. As the historical and non-recurring
tax matters do not relate to current year trading performance, the amounts
have been excluded from adjusted measures. The amounts have been recognised in
Financial expenses and Income tax expense within the Consolidated income
statement respectively.
2025 2024
Adjusted profit before tax: £'000 £'000
Statutory profit before tax 118,000 122,594
Closure of drug delivery business 2,059 -
Closure of the Edinburgh research facility 2,320 -
Other interest payable on historical and non-recurring tax matters 4,852 -
Adjusted profit before tax 127,231 122,594
2025 2024
Adjusted earnings per share: pence pence
Statutory earnings per share 115.2 133.2
Closure of drug delivery business (net of tax) 2.1 -
Closure of the Edinburgh research facility (net of tax) 2.4 -
Other interest payable on historical and non-recurring tax matters (net of tax) 5.5 -
Taxation prior year adjustments 12.6 -
Adjusted earnings per share 137.8 133.2
2025 2024
Adjusted operating profit: £'000 £'000
Statutory operating profit 107,885 108,667
Closure of drug delivery business 2,059 -
Closure of the Edinburgh research facility 2,320 -
Other interest payable on historical and non-recurring tax matters - -
Adjusted operating profit 112,264 108,667
Adjustments to the segmental operating profit:
2025 2024
Manufacturing technologies £'000 £'000
Operating profit 107,593 103,181
Closure of Edinburgh research facility 2,320 -
Adjusted manufacturing technologies operating profit 109,913 103,181
2025 2024
Analytical instruments and medical devices £'000 £'000
Operating profit 292 5,486
Closure of drug delivery business 2,059 -
Adjusted analytical instruments and medical devices operating profit 2,351 5,486
Adjusted operating profit at constant exchange rates is defined as Adjusted
operating profit recalculated using the same rates as applied to the previous
year and excluding forward contract gains and losses.
2025 2024
Adjustments to operating profit at constant exchange rates: £'000 £'000
Adjusted operating profit 112,264 108,667
Adjustment for forward contract (gains)/losses (19,176) (133)
Adjustment to restate current year at previous year exchange rates 16,784 -
Adjusted operating profit at constat exchange rates 109,872 108,534
Year-on-year adjusted operating profit increase at constant exchange rates 1.2% -
Year-on-year adjusted operating profit at constant exchange rates was a
reduction for FY2024 of 8.8%.
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.
2025 2024
Adjusted cash flow conversion from operating activities: £'000 £'000
Cash flows from operating activities 147,896 124,079
Income taxes paid 6,207 21,752
Purchase of property, plant and equipment and intangible assets (56,558) (74,774)
Proceeds from sale of property, plant and equipment and intangible assets 4,887 4,475
Adjusted cash flow from operating activities 102,432 75,532
Adjusted cash flow conversion from operating activities 91.2% 69.5%
Return on invested capital is the Adjusted 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.
Adjusted profit after tax before bank interest receivable is calculated as
follows:
2025 2024
£'000 £'000
Statutory profit after tax 83,757 96,889
Closure of drug delivery business (net of tax) 1,544 -
Closure of the Edinburgh research facility (net of tax) 1,740 -
Other interest payable on historical and non-recurring tax matters (net of tax) 4,026 -
Prior year adjustment taxation charge on historical and non-recurring tax matters 9,154 -
Adjusted profit after tax 100,221 96,889
Bank interest receivable (net of tax) (8,805) (6,832)
Adjusted profit after 91,416 90,057
tax before bank interest received
2025 2024 2023
Return on invested capital (ROIC): £'000 £'000 £'000
Total non-current assets 506,926 464,765 470,430
Total current assets 628,300 586,618 573,107
Total current liabilities (137,461) (100,948) (102,320)
Less cash and cash equivalents (87,420) (122,293) (81,388)
Less bank deposits (186,226) (95,542) (125,000)
Invested capital 724,118 732,600 734,829
Average invested capital 728,359 733,715 670,869
Return on invested capital 12.6% 12.3% 16.1%
Average invested capital in the year is the average of the invested capital at
the beginning of the year and at the end of the year.
30. Events after the reporting period
Key judgement - When termination benefits should be recognised
Determining when termination benefits should be recognised requires judgement
as there are different recognition points.
A cost reduction programme was initiated in June 2025, which aims to achieve
annualised labour cost savings of £20m through a voluntary and compulsory
redundancy programme. The cost of the voluntary redundancy programme will be
recognised in FY2026 as the employee has the right to withdraw from the
voluntary redundancy programme until the 'notice of redundancy' was signed by
the employee. The compulsory redundancy will be recognised in FY2026 as there
was no constructive obligation at the balance sheet date, as all communication
took place after the balance sheet date.
The total estimated cost of the voluntary and compulsory redundancy programme
is estimated to be £16.0m.
Cautionary statement
This document contains statements about Renishaw plc that are or may be
forward-looking statements.
These forward-looking statements are not guarantees of future performance.
They have not been reviewed by the auditors of Renishaw plc. They involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person to be
materially different from any results, performance or achievements expressed
or implied by such statements. They are based on numerous assumptions
regarding the present and future business strategies of such persons and the
environment in which each will operate in the future. All subsequent oral or
written forward-looking statements attributable to Renishaw plc or any of its
shareholders or any persons acting on its behalf are expressly qualified in
their entirety by the cautionary statement above. All forward-looking
statements included in this document speak only as of the date they were made
and are based on information then available to Renishaw plc. Investors should
not place undue reliance on such forward-looking statements, and Renishaw plc
does not undertake any obligation to update publicly or revise any
forward-looking statements.
No representation or warranty, express or implied, is given regarding the
accuracy of the information or opinions contained in this document and no
liability is accepted by Renishaw plc or any of its directors, members,
officers, employees, agents or advisers for any such information or opinions.
This information is being supplied to you for information purposes only and
not for any other purpose. This document and the information contained in it
does not constitute or form any part of an offer of, or invitation or
inducement to apply for, securities.
The distribution of this document in jurisdictions other than the United
Kingdom may be restricted by law and persons into whose possession this
document comes should inform themselves about, and observe any such
restrictions. Any failure to comply with these restrictions may constitute a
violation of laws of any such other jurisdiction.
Registered office:
Renishaw plc
New Mills
Wotton-under-Edge
Gloucestershire
GL12 8JR
UK
Registered number: 01106260
LEI number: 21380048ADXM6Z67CT18
Telephone: +44 1453 524524
Email: communications@renishaw.com
Website: www.renishaw.com
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