Oxford Instruments PLC
21 September 2004
21 September 2004
Oxford Instruments plc
AGM Trading Update
Oxford Instruments plc will be holding its Annual General Meeting today, at
which the Chairman, Nigel Keen, will make the following statement:
Business Strategy and Focus
Oxford Instruments has made a successful return to consistent profitability
through a series of internal programmes designed to create a stable and
cost-effective operational base. While we will continue to drive hard for
further operational improvements, we are reviewing our business, taking into
account both the investment opportunities and our focus on improving shareholder
Our technology strengths are widely acknowledged. However, we are most
successful in creating value when we develop a deep understanding of our
end-user customer requirements and then use our technology to deliver
differentiated technology-based solutions through a cost-effective organisation.
This defines our focus towards two key areas of the business:
Firstly, we need to grow our product lines where we are already supplying
complete solutions and services to customers who have materials processing and
measurement problems. In particular, we are looking to expand our solutions
business in the customer segments of life sciences, nanotechnology and
industrial and environmental quality control. We announced last week the
acquisition of Metorex International Oy, a business specialising in industrial
chemical analysis. We also announce today the acquisition of Resonance
Instruments, a leading supplier of advanced industrial quality control
Secondly, we will continue to grow our key components businesses in areas where
they support our solutions strategy. For example, the acquisition of Metorex
International Oy gives us proprietary technology for X-ray detectors, a key
component in our X-ray based measurement products.
Acquisition of Resonance Instruments Limited
We announce today that we have completed the acquisition of the entire share
capital of Resonance Instruments Limited ("Resonance").
Resonance, a privately owned company established twelve years ago which is based
in Witney, Oxfordshire, is a market leader in instruments for quality control
and research applications using low resolution nuclear magnetic resonance
("NMR"). It also supplies components and subsystems for research applications of
magnetic resonance imaging ("MRI").
We have made an initial payment on completion of £1.8m. The total consideration
payable for the shares of Resonance will be a maximum of £3.0m in cash. The
annual management accounts of Resonance for the year to 30 September 2003
reported sales of £2.7m and an operating loss of less than £0.1m. Net assets
acquired at completion are estimated to be £0.2m. The acquisition is expected to
be slightly earnings enhancing in 2004/05, with a growing contribution in 2005/
06 and beyond.
By acquiring Resonance, we will strengthen our existing range of bench-top, low
resolution NMR products and we will also acquire important complementary skills
to enhance our development of novel sample preparation techniques for the life
sciences market, using technology licensed earlier this year from GE Healthcare.
Total order levels for the first half are expected to be close to internal
forecasts. We have previously stated that volumes in the Superconductivity
business will be well down on last year and as forecast the magnet inventory
reduction programme by Varian, a magnet customer, has held back magnet shipments
in the first half.
We have now regained control over the quality problems previously reported in
the supply base of our wire business, which affected one specific product used
only by Siemens. We expect to take an exceptional charge not exceeding £1.7m
associated with this in the first half.
As indicated at the time of our preliminary results in June, turnover and hence
pre-tax profits in the first half for continuing operations before goodwill and
before exceptional items will be below the same period last year. However, our
current review indicates that the outcome for the full year is expected to be in
line with market expectations.
Oxford Instruments plc 01865 881437
Andrew Mackintosh, Chief Executive
Martin Lamaison, Finance Director
Hogarth Partnership Limited 020 7357 9477
Notes to editors
Oxford Instruments plc
Oxford Instruments is a global leader in advanced instrumentation. It is a
recognised world leader in several technologies, including the application of
superconductivity, the creation of low temperatures, the production and
detection of X-rays and in neurological measurements. The Company's products are
used around the world in scientific research, industrial chemical analysis and
quality control, healthcare and semiconductor processing. Its customers include
most of the world's major international companies, as well as the leading
hospitals and research institutes.
Born out of Oxford University, with over 40 years of continuous product
development, Oxford Instruments today comprises three businesses: Analytical,
Medical and Superconductivity.
This information is provided by RNS
The company news service from the London Stock Exchange