Interim Results

Renishaw PLC 23 January 2008 Renishaw plc and subsidiary undertakings 23rd January 2008 Interim results 2008 Interim results for the half year ended 31st December 2007 Consolidated income statement 6 months to 6 months to December 2007 December 2006 £'000 £'000 Revenue 91,640 87,120 Cost of sales (52,006) (48,128) ----------- ----------- Gross profit 39,634 38,992 ----------- ----------- Distribution costs (16,540) (16,407) Administrative expenses (9,930) (10,572) ----------- ----------- Operating profit 13,164 12,013 Financial income 4,437 3,978 Financial expenses (2,539) (2,478) ----------- ----------- Profit before tax 15,062 13,513 Income tax expense (3,012) (2,703) ----------- ----------- Profit for the period 12,050 10,810 ----------- ----------- Earnings per share (basic and diluted) 16.6p 14.9p Proposed dividend per share 7.76p 7.05p Consolidated statement of recognised income and expense 6 months to 6 months to December 2007 December 2006 £'000 £'000 Foreign exchange translation differences 1,117 (394) Actuarial loss in the pension schemes (1,458) (13,693) Changes in fair value of cash flow hedges (2,429) 511 Deferred tax on items recognised on income and expense 1,236 4,014 ----------- ----------- Loss recognised in equity (1,534) (9,562) Profit for the period 12,050 10,810 ----------- ----------- Total recognised income and expense for the period 10,516 1,248 ----------- ----------- Consolidated balance sheet At December At December 2007 2006 £'000 £'000 Assets Property, plant and equipment 69,592 69,779 Intangible assets 15,559 13,654 Investments in associates 6,931 908 Deferred tax assets 5,453 14,633 Employee benefits 5,365 - ------------ ----------- Total non-current assets 102,900 98,974 ------------ ----------- Current assets Inventories 35,100 30,995 Trade receivables 38,002 32,814 Current tax 557 298 Other receivables 4,990 7,656 Cash and cash equivalents 16,399 26,549 ------------ ----------- Total current assets 95,048 98,312 ------------ ----------- Current liabilities Trade payables 8,979 10,926 Current tax 1,985 2,177 Provisions 778 891 Other payables 7,209 6,463 ------------ ----------- Total current liabilities 18,951 20,457 ------------ ----------- ------------ ----------- Net current assets 76,097 77,855 ------------ ----------- Non-current liabilities Employee benefits - 32,058 Deferred tax liabilities 11,996 11,756 ------------ ----------- Total non-current liabilities 11,996 43,814 ------------ ----------- ------------ ----------- Total assets less total liabilities 167,001 133,015 ------------ ----------- Equity Issued capital 14,558 14,558 Share premium 42 42 Currency translation reserve 907 (129) Cash flow hedging reserve 96 2,365 Retained earnings 151,398 116,179 ------------ ----------- Total equity 167,001 133,015 ------------ ----------- Consolidated statement of cash flow 6 months to 6 months to December 2007 December 2006 £'000 £'000 Cash flows from operating activities Profit for the period 12,050 10,810 ----------- ----------- Adjustments for: Amortisation of development costs 1,642 1,052 Amortisation of other intangibles 800 493 Depreciation 4,033 3,765 Profit on sale of fixed assets (10) (8) Share of profits from associates (160) - Financial income (4,437) (3,978) Financial expenses 2,539 2,478 Tax expense 3,012 2,703 ----------- ----------- 7,419 6,505 ----------- ----------- Decrease/(increase) in inventories 1,078 (2,636) Decrease in trade and other receivables 885 2,471 Decrease in trade and other payables (4,217) (2,951) Difference between pension charge and contributions - 259 Increase in provisions 85 98 ----------- ----------- (2,169) (2,759) ----------- ----------- Income taxes paid (2,307) (2,018) ----------- ----------- Cash flows from operating activities 14,993 12,538 ----------- ----------- Investing activities Purchase of tangible fixed assets (2,682) (5,902) Development costs capitalised (3,039) (2,240) Purchase of other intangibles (966) (416) Investment in associates, net of dividend received 21 - Sale of tangible fixed assets 75 93 Interest received 721 785 ----------- ----------- Cash flows from investing activities (5,870) (7,680) ----------- ----------- Financing activities Interest paid (84) (20) Dividends paid (11,515) (10,969) ----------- ----------- Cash flows from financing activities (11,599) (10,989) ----------- ----------- Net decrease in cash and cash equivalents (2,476) (6,131) Cash and cash equivalents at beginning of period 20,761 30,728 Effect of exchange rate fluctuations on cash held (1,886) 1,952 ----------- ----------- Cash and cash equivalents at end of period 16,399 26,549 ----------- ----------- Revenue analysis 6 months to 6 months to First half December 2007 December 2006 revenue at previous year exchange rates £'000 £'000 £'000 Continental Europe 33,166 31,672 32,769 Far East, including Japan & Australia 28,253 25,766 29,623 North & South America 21,469 22,025 22,470 UK and Ireland 6,248 5,232 6,248 Other overseas regions 2,504 2,425 2,439 ----------- ----------- ----------- Revenue 91,640 87,120 93,549 ----------- ----------- ----------- ************************* NOTES: 1. The Interim report was approved by the directors on 23rd January 2008. 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 2007, as revised for the implementation of specified new amended endorsed standards or interpretations. The interim financial information for the six months to 31st December 2007 and the comparative figures for the six months to 31st December 2006 are unaudited. The comparative figures for the financial year ended 30th June 2007 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 7.76p net per share for the year ended 30th June 2008 will be paid on 7th April 2008 to shareholders on the register on 7th March 2008. ************************** Half year management report Chairman's statement I am pleased to report Renishaw's results for the first six months of the current year ended 31st December 2007. As anticipated at the AGM last October, performance has continued to improve throughout the first six months with revenue increasing by 5% to £91.6m (2006 £87.1m). At constant exchange rates, revenue would have been £1.9m higher, an increase of 7% reflecting good progress in our major geographic markets, particularly the Far East. Within the product mix, there was above-average growth in laser and calibration, machine tool and styli products, if partly offset by lower revenue from spectroscopy and dental products. Operating profit rose 9.5% to £13.2m (2006 £12.0m). At constant exchange rates the operating profit would have increased to approximately £15.0m, an increase of 25%. Profit before tax increased 11.4% to £15.1m (2006 £13.5m). Profit after tax amounted to £12.1m (2006 £10.8m), resulting in earnings per share up 11.4% to 16.6p (2006 14.9p). A high level of research and development remains integral to Renishaw's progress; research and development, including associated engineering costs, during the period amounted to £15.6m (2006 £14.8m). During this half year we have particularly focussed on the large number of new products recently introduced. The recent and very positive response to REVO(TM) from the aerospace and automotive sectors has reinforced our belief in the Group's current approach to the market. In addition to new sales, the opportunity for significant growth of the retrofit market for REVO(TM) is currently being discussed with our OEM customers, with a view to maximising the market potential. Net cash balances at 31st December 2007 were £16.4m (30th June 2007 £20.8m). Policies have been revised to reduce the level of investment in Group inventory, which at 31st December 2007 stood at £35.1m (30th June 2007 £36.2m). Capital expenditure during the six months reduced to £2.7m (2006 £5.5m). Management is continuing to concentrate on the Group's cost base and operating margins. Whilst performance has improved during the first half, we still expect continuing and improved performance in the second half, aided by resumed orders from a major Japanese customer for its own export sales, growing orders for new products especially the REVO(TM) and the current weakness of sterling. The principal risks remain substantially the same as those referred to in last year's Annual report. An interim dividend of 7.76p (2007 7.05p) per share, an increase of 10%, will be paid on 7th April 2008 to shareholders on the register on 7th March 2008. Sir David R McMurtry, CBE, RDI, CEng, FIMechE, FREng Chairman & Chief Executive 23rd January 2008 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 This information is provided by RNS The company news service from the London Stock Exchange

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