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UPDATE 2-Strong fourth quarter boosts UK engineer Renishaw
July 23, 2014 / 8:31 AM / 3 years ago

UPDATE 2-Strong fourth quarter boosts UK engineer Renishaw

* Full-year pretax profit rises 17 pct to 96.4 mln stg

* Full-year revenue up 2 pct at 355.5 mln stg

* Q4 revenue rises 18 pct, pretax profit up 43 pct

* Stock rises as much as 19.5 pct; top percentage gainer in London (Adds details, assistant CEO and analyst comments, updates share movement)

By Roshni Menon

July 23 (Reuters) - British engineering company Renishaw Plc reported a 17 percent jump in full-year profit as large orders from a customer in Asia in the fourth quarter took the sting out of a stronger pound.

Shares in the company, whose products include precision measurement and calibration systems and spectroscopy devices, rose as much as 19.5 percent, making the stock the top percentage gainer on the London Stock Exchange.

Renishaw, which generates about 90 percent of its revenue from outside the UK, said it received large “unpredictable” orders in the fourth quarter from an Asian customer.

The company did not disclose the value of the orders or the name of the customer.

Assistant Chief Executive Ben Taylor said it was difficult to predict the timing of orders from this particular customer.

“This customer will work with us for many months on a project, then ‘bang!’ - give us an order and we have to ship, in some cases, the very next day a rather large order,” Taylor told Reuters.

UBS analysts estimated the orders to be worth 17 million-20 million pounds ($29-$34 million), with about 50 percent of that flowing through to adjusted pretax profit.

Renishaw said on Wednesday its pretax profit increased 43 percent to 30.1 million pounds in the fourth quarter. Revenue rose 18 percent to 107 million pounds.

The orders were mainly in the company’s metrology division, which makes precision equipment and accounts for more than 90 percent of revenue. Revenue in the division rose 2.7 percent in the year to June 30.

“We are not sure how much, if at all, this can be extrapolated into FY15E, but this is good news nevertheless,” Investec analyst Michael Blogg said in a note.


The company’s statutory full-year pretax profit rose 17 percent to 96.4 million pounds. Total revenue rose 2 percent to 355.5 million pounds for the year.

The company said its revenue would have been 11.2 million pounds higher and profit 6.8 million higher if the pound’s exchange rate had remained at prior-year levels.

The pound rose 12.4 percent against the dollar over the period.

In the third quarter, a stronger pound hurt the bottomline of many British industrials that have exposure to foreign markets but report earnings in sterling.

Numis Securities analysts upgraded their rating on Renishaw’s stock to “add” from “hold” saying the underlying revenue momentum had continued into the current financial year.

Renishaw also booked a gain of 26.3 million pounds on the disposal of its 19.4 percent stake in industrial design software maker Delcam Plc, which was bought by Autodesk Inc in February.

Renishaw’s shares were up 18 percent at 1,741 pence at 1038 GMT. The stock has shed a quarter of its value since the end of the third quarter. ($1 = 0.5859 British pounds) (Additional reporting by Aashika Jain; Editing by Ted Kerr and Saumyadeb Chakrabarty)

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