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CORRECTED-UPDATE 1-Engineering group Renishaw returns to quarterly profit growth
January 30, 2014 / 1:50 PM / 4 years ago

CORRECTED-UPDATE 1-Engineering group Renishaw returns to quarterly profit growth

(Corrects paragraph 10 to remove reference to Renishaw competing with Sweden’s Hexagon in the 3D printing market)

* First-half pretax profit slumps 65 pct

* Second-quarter pretax profit rises marginally

* Second-quarter revenue rises about 9 percent

* Sees revenue rising in second half

* Shares rise 6 pct, top gainer on FTSE-250 Midcap Index

By Tasim Zahid

Jan 30 (Reuters) - British engineering company Renishaw Plc returned to profit growth in the second quarter and forecast a jump in revenue in the second half of the year, sending its shares up as much as 8 percent.

Renishaw’s stock was up 6 percent at 1908 pence at 1248 GMT on Thursday, making it the biggest percentage gainer on the FTSE-250 Midcap Index.

Earlier in the session, the stock had fallen 2 percent after the company reported a 65 percent drop in first-half profit. The stock reversed direction after investors digested the strong second-quarter results.

“The main reason (for the stock movement) is that ... when you dig deeply, there is a massive difference in the way they performed in the first quarter and how they performed in the second quarter,” N+1 Singer analyst Jo Reedman told Reuters.

The company, which makes machine tool probes and gauges, said second-quarter pretax profit rose 3.4 percent to 15 million pounds ($25 million). Profit had slumped 62 percent in the first quarter.

However, pretax profit fell to 25.6 million pounds in the six months ended Dec. 31, from a restated 42.2 million pounds a year earlier.

Renishaw had posted strong first-quarter and first-half results a year earlier mainly due to a large number of orders from China in the consumer electronics market.

“Good demand in most of (Renishaw‘s) end markets is being driven by increasing requirements to improve manufacturing sophistication and automation,” Numis Securities analyst Scott Cagehin said in a note to clients.

Cagehin said he expect the company’s growth rate to improve in the second half due to easier comparisons with the year-ago period.

The Gloucestershire, England-based company also said it was seeing strong demand for 3D additive manufacturing products.

“We are very early in the development of a major redesign (of 3D printing ) and this could be a substantial part of Renishaw’s future,” Ben Taylor, assistant chief executive, told Reuters.

The company, which also makes robots used in neurosurgeries, restated its 2013 results due to a change in accounting practises. ($1 = 0.6041 British pounds) (Reporting by Tasim Zahid in Bangalore; Editing by Savio D‘Souza)

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