Trading Statement

Renishaw PLC
14 October 2005




First quarter trading statement

I am pleased to report that both turnover and profit for the first three months
of this current financial year are ahead of those for the comparable period last
year. The Group has seen growth in all its major markets worldwide, in
particular, the Far East and in all our major product lines.

Progress continues with the preparation of our Stonehouse property for the move
of the manufacturing facility from our New Mills site. The Stonehouse facility
will be fully operational by the end of March 2006.

A number of new products have been introduced at recent exhibitions, in
particular, at EMO held in Hannover in September. The Gyro range of heads, to
complement REVO and RENSCAN5 introduced in April this year in our Co-ordinate
Measuring Machine (CMM) product line were very well received. Also introduced
were the OMP400 High Accuracy Strain Gauge Probe and On-Machine Verification
Software launched by our Machine Tool product line.

The Company has recently acquired a 50% interest in Pulseteq Limited, a small UK
company, specialising in radio frequency coil electronics and other enhancements
to magnetic resonance scanners. This investment illustrates our intention to
undertake further investigations and exploit opportunities in the medical field
by applying our in-house metrology expertise.

Also since the year end we have acquired a 50% interest in Metrology Software
Products Limited, another small UK-based company, to strengthen the software
development programmes for our CMM and Machine Tool product lines.

Following the triennial actuarial valuation of the Company's Pension Fund and
the results of the 2005 FRS17 calculation which were incorporated in the annual
results to 30th June 2005, your Board is currently undertaking a review of the
Company's pension arrangements.

The annual accounts for the year ended 30th June 2005 have been restated under
the International Financial Reporting Standards. These have been issued this
morning and are now available on our website. The overall net effect of these
accounting changes is a small increase in the reported profits before tax from
£31.3m to £31.7m and an increase in earnings per share from 34.3p to 34.9p.

We remain confident of the Company's future prospects.



2005 accounts restated under International Financial Reporting Standards
('IFRS')

Renishaw plc today issues its 2005 accounts restated under IFRS. The first set
of accounts to be prepared under IFRS will be the interim results for the first
half year ending 31st December 2005, with the comparative figures for the first
half year to 31st December 2004 and the full year to 30th June 2005 being
restated.

A full set of accounts for the year ended 30th June 2005, compliant with IFRS
and with accompanying accounting policies, is available on our website
www.renishaw.com.

The major impacts of IFRS accounting standards on income for the year ended 30th
June 2005 and on the balance sheet at 30th June 2005 were:
   
  * Capitalisation of development costs - IFRS requires certain development
    expenditure to be capitalised and subsequently amortised over a period of
    time. This has resulted in an increase in profit before tax of £0.5m for the
    year and an intangible asset of £4.8m at 30th June 2005.

  * Earnings per share increased from 34.3p to 34.9p

  * Dividends - Under IFRS, dividends are only accounted for, once they have
    been approved by shareholders. The 2005 final dividend is therefore not
    accounted for in the 2005 results and equity at 30th June 2005 is thereby
    increased by £10.0m.

  * Treatment of exchange differences. Under IFRS, exchange gains and losses
    resulting from the hedging operation to hedge future foreign currency income
    streams are reflected in turnover, whereas under previous UK generally
    accepted accounting policies ('UK GAAP'), these were shown within
    administrative expenses. This has increased turnover and administrative
    expenses by £0.7m, although the profit before tax is unchanged.

  * Balance sheet reclassifications - IFRS requires a number of assets and
    liabilities to be presented differently. The most significant are -

      + The pension deficit is shown at the gross value, with a related
        deferred tax asset shown as part of non-current assets. Previously, the
        pension deficit was shown net of the deferred tax amount.

      + Software licences, previously part of tangible fixed assets, have been
        reclassified as intangible fixed assets.

      + The deferred tax balance has been analysed between deferred tax assets
        and deferred tax liabilities and these balances are shown separately
        under assets and liabilities.

 

A summarised 2005 income statement reconciliation and a balance sheet
reconciliation at 30th June 2005 are as follows:

2005 income statement

                             Capitalised    Tax on 
                             development intragroup Other
                       UK GAAP    costs    trading  items  Reanalysis  IFRS

                            £m       £m       £m       £m       £m       £m

Turnover                 154.1                                 0.7    154.8

Cost of sales            (81.4)     0.5                               (80.9)
                       ________ ________ ________ ________ ________ ________
Gross profit              72.7      0.5                        0.7     73.9

Overheads                (43.8)                      (0.1)    (0.7)   (44.6)
                       ________ ________ ________ ________ ________ ________
Operating profit          28.9      0.5              (0.1)             29.3

Finance income             2.4                                          2.4
                       ________ ________ ________ ________ ________ ________
Profit before tax         31.3      0.5              (0.1)             31.7

Tax expense               (6.3)    (0.1)     0.1                       (6.3)
                       ________ ________ ________ ________ ________ ________
Net profit                25.0      0.4      0.1     (0.1)             25.4
                       ________ ________ ________ ________ ________ ________
    


Balance sheet at 30th June 2005

                               Capitalised  Reversal
                               development       of  Other
                        UK GAAP    costs    dividend  items  Reanalysis   IFRS

                             £m       £m       £m      £m       £m       £m
Assets
Property, plant            66.7                                (2.4)    64.3
Intangible assets             -      4.8                        2.4      7.2
Deferred tax                  -                        0.7      9.9     10.6
                        ________ ________ ________ ________ ________ ________
Total non-
current assets             66.7      4.8        -      0.7      9.9     82.1
                        ________ ________ ________ ________ ________ ________  
  
Inventories                27.4                                         27.4
Trade receivables          34.6                                         34.6
Current tax                   -                                 0.3      0.3
Other receivables           2.8                                          2.8
Cash                       30.1                                         30.1
                        ________ ________ ________ ________ ________ ________
Total current
assets                     94.9        -        -        -      0.3     95.2
                        ________ ________ ________ ________ ________ ________

Total assets              161.6      4.8        -      0.7     10.2    177.3
                        ________ ________ ________ ________ ________ ________

 
Equity
Issued capital             14.6                                         14.6
Share premium                 -                                            -
Currency reserve              -                                 0.7      0.7
Retained earnings          97.6      3.4     10.0              (0.7)   110.3
                        ________ ________ ________ ________ ________ ________
Total equity              112.2      3.4     10.0        -        -    125.6
                        ________ ________ ________ ________ ________ ________

Liabilities
Employee benefits          14.8                                 5.9     20.7
Deferred tax                4.5      1.4                        4.0      9.9
Provisions                  0.6                                          0.6
                        ________ ________ ________ ________ ________ ________
Total non-
current liabilities        19.9      1.4        -         -     9.9     31.2
                        ________ ________ ________ ________ ________ ________

Trade payable               9.5                                          9.5
Current tax                 2.3                                 0.3      2.6
Other payables             17.7             (10.0)     0.7               8.4
                        ________ ________ ________ ________ ________ ________
Total current
Liabilities                29.5        -    (10.0)     0.7      0.3     20.5
                        ________ ________ ________ ________ ________ ________

Total liabilities          49.4      1.4    (10.0)     0.7     10.2     51.7
                        ________ ________ ________ ________ ________ ________

Total equity
and liabilities           161.6      4.8        -      0.7     10.2    177.3
                        ________ ________ ________ ________ ________ ________

 

For further information, please contact:

Allen Roberts Group Finance Director  01453 524445

Ben Taylor Assistant Chief Executive  01453 524445

Registered office.  New Mills, Wotton-under-Edge, Gloucestershire, UK. GL12 8JR

Telephone.  [phone]



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