Interim Results

Renishaw PLC
24 January 2007




Renishaw plc and subsidiary undertakings                       24th January 2007

Interim results 2007
Interim results for the half year ended 31st December 2006


Consolidated income statement

                                            6 months to            6 months to
                                          December 2006          December 2005
                                                  £'000                  £'000

Revenue                                          87,120                 81,625
Cost of sales                                   (48,128)               (43,341)
                                              -----------            -----------
Gross profit                                     38,992                 38,284
                                              -----------            -----------

Distribution costs                              (16,407)               (14,785)
Administrative expenses                         (10,572)                (9,617)
                                              -----------            -----------
Operating profit                                 12,013                 13,882

Financial income                                  3,978                  3,330
Financial expenses                               (2,478)                (1,872)
                                              -----------            -----------
Profit before tax                                13,513                 15,340

Income tax expense                               (2,703)                (3,068)
                                              -----------            -----------
Profit for the period                            10,810                 12,272
                                              -----------            -----------

Earnings per share (basic and diluted)            14.9p                  16.9p
Proposed dividend per share                       7.05p                  6.71p



Consolidated statement of recognised income and expense

                                                  6 months to      6 months to
                                                December 2006    December 2005
                                                        £'000            £'000

Foreign exchange translation differences                 (394)             326

Actuarial loss in the pension schemes                 (13,693)          (2,660)
Changes in fair value of cash flow hedges                 511              (83)
Deferred tax on items recognised on income and
expense                                                 4,014              825
                                                    -----------      -----------
Loss recognised in equity                              (9,562)          (1,592)
Profit for the period                                  10,810           12,272
                                                    -----------      -----------
Total recognised income and expense for the
period                                                  1,248           10,680
                                                    -----------      -----------
Opening adjustment on adoption of IAS 32 and
IAS 39                                                                   2,234
                                                                     -----------
                                                                        12,914
                                                                     -----------

Consolidated balance sheet

                                               At December        At December
                                                      2006               2005
                                                     £'000              £'000

Assets
Property, plant and equipment                       69,779             67,615
Intangible assets                                   13,654              7,530
Investments in associates                              908                928
Deferred tax assets                                 14,633             10,940
                                                 -----------        -----------
Total non-current assets                            98,974             87,013
                                                 -----------        -----------

Inventories                                         30,995             28,195
Trade receivables                                   32,814             33,134
Current tax                                            298                360
Other receivables                                    7,656              6,109
Cash and cash equivalents                           26,549             25,708
                                                 -----------        -----------
Total current assets                                98,312             93,506
                                                 -----------        -----------
                                                 -----------        -----------
Total assets                                       197,286            180,519
                                                 -----------        -----------
Equity
Issued capital                                      14,558             14,558
Share premium                                           42                 42
Currency translation reserve                          (129)               981
Cash flow hedging reserve                            2,365              2,176
Retained earnings                                  116,179            110,642
                                                 -----------        -----------
Total equity                                       133,015            128,399
                                                 -----------        -----------
Liabilities
Employee benefits                                   32,058             22,200
Deferred tax liabilities                            11,756             10,481
                                                 -----------        -----------
Total non-current liabilities                       43,814             32,681
                                                 -----------        -----------

Trade payables                                      10,926              9,444
Current tax                                          2,177              2,064
Provisions                                             891                642
Other payables                                       6,463              7,289
                                                 -----------        -----------
Total current liabilities                           20,457             19,439
                                                 -----------        -----------

Total liabilities                                   64,271             52,120
                                                 -----------        -----------
Total equity and liabilities                       197,286            180,519
                                                 -----------        -----------



Consolidated statement of cash flow

                                                  6 months to      6 months to
                                                December 2006    December 2005
                                                        £'000            £'000

Cash flows from operating activities
Profit for the period                                  10,810           12,272
                                                    -----------      -----------
Adjustments for:
Amortisation of development costs                       1,052              724
Amortisation of other intangibles                         493              302
Depreciation                                            3,765            3,743
Profit on sale of fixed assets                             (8)             (14)
Financial income                                       (3,978)          (3,330)
Financial expenses                                      2,478            1,872
Tax expense                                             2,703            3,068
                                                    -----------      -----------
                                                        6,505            6,365
                                                    -----------      -----------

Increase in inventories                                (2,636)            (799)
Decrease/(increase) in trade and other
receivables                                             2,471            1,830
(Decrease)/increase in trade and other
payables                                               (2,951)          (1,169)
Difference between pension charge and
contributions                                             259             (720)
Increase in provisions                                     98               10
                                                    -----------      -----------
                                                       (2,759)            (848)
                                                    -----------      -----------

Income taxes paid                                      (2,018)          (3,637)
                                                    -----------      -----------
Cash flows from operating activities                   12,538           14,152
                                                    -----------      -----------
Investing activities
Purchase of tangible fixed assets                      (5,902)          (7,082)
Development costs capitalised                          (2,240)          (1,177)
Purchase of other intangibles                            (416)            (187)
Investment in associates                                    -             (928)
Sale of tangible fixed assets                              93              313
Interest received                                         785            1,040
                                                    -----------      -----------
Cash flows from investing activities                   (7,680)          (8,021)
                                                    -----------      -----------
Financing activities
Interest paid                                             (20)             (12)
Dividends paid                                        (10,969)          (9,972)
                                                    -----------      -----------
Cash flows from financing activities                  (10,989)          (9,984)
                                                    -----------      -----------

Net decrease in cash and cash equivalents              (6,131)          (3,853)

Cash and cash equivalents at beginning of
period                                                 30,728           30,072
Effect of exchange rate fluctuations on cash
held                                                    1,952             (511)
                                                    -----------      -----------
Cash and cash equivalents at end of period             26,549           25,708
                                                    -----------      -----------


Revenue analysis
                             6 months to       6 months to          First half
                           December 2006     December 2005          revenue at
                                                                 previous year
                                                                exchange rates
                                   £'000             £'000               £'000

Continental Europe                31,672            26,884              31,897
Far East, including Japan &
Australia                         25,766            25,029              28,303
North & South America             22,025            22,095              23,703
Other overseas regions             2,425             2,593               2,544
UK and Ireland                     5,232             5,024               5,232
                               -----------       -----------         -----------
Revenue                           87,120            81,625              91,579
                               -----------       -----------         -----------

                           *************************

NOTES:

1. The Interim report was approved by the directors on 24th January 2007.

This interim financial information has been prepared on the basis of the
accounting policies adopted in the most recent annual financial statements,
these being for the year ended 30th June 2006, as revised for the implementation
of specified new amended endorsed standards or interpretations.

The interim financial information for the six months to 31st December 2006 and
the comparative figures for the six months to 31st December 2005 are unaudited.
The comparative figures for the financial year ended 30th June 2006 are an
abridged version of the statutory accounts for that financial year. Those
accounts have been reported on by the Company's auditors and delivered to the
registrar of companies. The report of the auditors was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.

2.  The interim dividend of 7.05p net per share for the year
ended 30th June 2007 will be paid on 9th April 2007 to shareholders on the
register on 9th March 2007.


                           **************************


Chairman's statement

I report the Company's results for the first six months of the current financial
year ended 31st December 2006.

Revenue in this period increased 7% to £87.1m (2005: £81.6m), representing
growth of 12% at constant exchange rates and demonstrating good progress in all
our major geographic markets. There was above average growth in dental, styli,
machine tool and encoder products which offset a softening in the market for
co-ordinate measuring machine (CMM) products.

Operating profit for the period was £12.0m (2005: £13.9m).The adverse impact of
the strong pound on the profit for the period, which was highlighted at the AGM
in October, is estimated to be £3.1m. Profit before tax amounted to £13.5m
(2005: £15.3m). Profit after tax was £10.8m resulting in earnings per share of
14.9p (2005: 16.9p). Net cash balances at 31st December 2006 were £26.5m (2005:
£25.7m).

We remain committed to a high level of research and development which, including
associated engineering costs, amounted to £14.8m (2005: £13.8m), an increase of
7%. New products introduced include the UCClite controller from our CMM product
line, an optical toolsetter (OTS) and optical interface (OMI-2T) from our
machine tool product line and the REXM high accuracy angle encoder.

Capital expenditure during the six months amounted to £5.5m (2005: £7.2m).

The refurbishment at Woodchester is complete and equipment for the new automated
stores is being commissioned. The laser and calibration product line has been
successfully relocated to Woodchester. At New Mills, the former machine shop has
been refurbished and now provides pre-production machining and assembly
facilities with further investment being made in the Group's rapid prototyping
facility.

In India, we have expanded our sales and procurement activities and the
production facility at Pune is now operational and the software development team
has been established.

The Company has continued to strengthen its worldwide marketing representation,
in particular a new subsidiary has been established in Singapore and two
additional regional offices in Brazil.

The Company announced on 19th January 2007 that agreement had been reached with
the Trustees of the Company's defined benefit pension scheme to cease future
accrual for current members of the scheme and future employees. The pension fund
liability as at 31st December 2006, measured under the rules for IAS19
accounting purposes, has increased to £32.1m (30th June 2006: £18.8m) reflecting
the latest triennial valuation undertaken by the scheme actuary on 29th
September 2006. This valuation resulted in a £41m funding deficit on an ongoing
basis which reduces to £24m after the proposed changes. This change should
reduce the reported deficit at the end of our financial year and reduce the
Group's exposure to future volatility. The Company and Trustees are now in the
process of consultation with members to establish a new defined contribution
scheme (with a Company contribution of 11%) within the existing pension scheme
trust to take effect from 6th April 2007.

Although we remain very confident for the longer term, at this stage it appears
likely that the adverse effects of currency exchange rates, together with the
softening of demand for our products in the CMM market (with some development
delays in delivering certain of our new and in-demand products, in particular
the REVO(TM) and GYRO(TM)), will result in profits for the full year being below
those for last year.

An interim dividend of 7.05p per share (2006: 6.71p per share) will be paid on
9th April 2007 to shareholders on the register on 9th March 2007.

Sir David R McMurtry, CBE, RDI, CEng, FIMechE, FREng
Chairman & Chief Executive
24th January 2007



Enquiries:             B R Taylor           01453 524445
                       A C G Roberts        01453 524445

Registered number:     1106260
Registered office:     New Mills, Wotton-under-Edge, Gloucestershire. GL12 8JR
Telephone:             01453 524524





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