UPDATE 1-Renishaw year meets forecasts, sees new markets

(Adds more detail, comment, background)

By Dan Lalor

LONDON, July 23 (Reuters) - British engineer Renishaw Plc (RSW.L) met forecasts with a 26 percent rise in core annual profit and said it was finding more markets for its technology, lifting its shares to a three-week high on Wednesday.

"It is clear that many of our customers who traditionally have much longer lead-times than ourselves are still very buoyant," Renishaw, which makes measurement systems for industries ranging from cars to dentistry, said in a statement.

The company has been moving outside traditional engineering markets to drive growth, and has started making devices to help neurosurgeons implant deep brain stimulation electrodes with more accuracy.

Renishaw said operating profit before exceptional items rose to 37.3 million pounds ($75 million) in the year to end-June, on revenue up 11 percent to 201 million pounds. The operating margin rose to 18.6 percent from 16.4 percent.

Some 95 percent of sales are made overseas, and sterling's decline meant Renishaw made 1.4 million pounds of additional profit due to favourable exchange rates.

The final dividend was set at 17.63 pence, making the total dividend 11 percent higher at 25.39 pence.

By 0900 GMT, Renishaw shares, which had outperformed other London-listed electronic and electrical equipment makers .FTASX2730 by 61 percent over the past 12 months, were up 2 percent at 730p to value it at 528 million pounds.

UBS analysts, who have a 'neutral' rating and 800 pence target on Renishaw stock, said the company had delivered a reassuring set of results.

"Organic growth accelerated in the second half to 11 percent year-on-year, following 7 percent in the first half. We view this as extremely encouraging.

That acceleration in growth "should put upside pressure on consensus estimates for 2008/08 despite the uncertain macro outlook," UBS said.

Renishaw is 36 percent-owned by Chairman and Chief Executive David McMurtry and 17 percent-owned by Deputy Chairman John Deer, who together founded the company in 1973 when McMurtry invented a probe for Concorde's jet engines inspections. (Editing by Louise Ireland)