Renishaw Plc achieves record revenue of £691.3m in FY24 results

Renishaw plc (LON:RSW) has announced its preliminary results for the year ended 30 June 2024.

Solid strategic progress in challenging market conditions

Performance highlights

·      Revenue of £691.3m (FY2023: £688.6m):

•     Record revenue, 0.4% higher than FY2023, boosted by a strong final quarter;

•     Revenue at constant exchange rates, excluding the impact of forward contracts, was £25.4m (3.7%) higher than the previous year; and

•     Good revenue growth from systems sales, offset by weaker demand from the semiconductor sector for Position Measurement products.

·      Manufacturing technologies revenue flat at £648.1m, with:  

•     Record revenue for shop-floor gauging and co-ordinate measuring machine (CMM) inspection systems;

•     Good growth in sales of multi-laser additive manufacturing (AM) systems, with a strong second half for sales from key customers in the medical sector; and

•     Weaker demand for Position Measurement products overall, but with four quarters of sequential growth amid signs of recovering demand from the semiconductor sector.

·      Analytical instruments and medical devices revenue increased by 7% to £43.2m, with:

•     Record sales for our Spectroscopy product line, with stronger demand in EMEA where we have expanded our sales team;

•     Growth for our Neurological product line, including sales of our neuromate® surgical robot to diagnose patients with epilepsy.

·      Adjusted^* profit before tax 13% lower at £122.6m (FY2023: £141.0m):

•     Profit reduction primarily resulting from a combination of the impact of currency on revenues and increased employee pay, including £2.1m of severance costs.

•     Gross engineering expenditure increased by 6% as we continue to invest in innovation, whilst distribution cost were 2% higher and administration costs were flat.

·    Statutory profit before tax of £122.6m (FY2023: £145.1m).

·    Strong balance sheet with cash and cash equivalents and bank deposit balances of £217.8m, compared with £206.4m at 30 June 2023:

•     Invested £65.2m (FY2023: £73.8m) in capital expenditure, including completion and occupation of the first phase of expansion of our production facility in Miskin, Wales.

·    Proposed final dividend of 59.4p per share.

Strategic progress

·    Renishaw’s ambition is to deliver high single-digit growth through the business cycle, combined with >20% operating margins.  This year, we introduced a long-term value creation model to explain how we will achieve these goals, including three areas of strategic focus:

1.    Growing in our existing markets – aiming to increase revenue by driving up probe fitment levels, offering higher value sensors, and by winning more machine builder customers.

•       Launched the RMP24-micro, the world’s smallest wireless machine tool probe, designed for compact machine tools that make high-precision miniature components, where probe fitment was not previously possible.

•       We also continued to grow revenue from our FORTiS™ enclosed position encoders, where we see significant opportunities, and won new business for our magnetic, optical and laser position encoders from machine builders in a wide range of sectors.

2.     Increasing the value of the technology we sell – aiming to provide our end-user customers with complete solutions to capture a greater proportion of their investment.

•     Strong growth in sales of our Equator™ gauge, helped by the continuing trend for greater automation of process control on shop-floor machinery.

•     Began rolling out our new generation of metrology software, MODUS™ IM Gauge & Control, which aims to simplify programming of our Equator gauging system.

•     Launched the RenAM 500 Ultra additive manufacturing machine, featuring our new TEMPUS™ technology, which reduces build times by up to 50%.

3.    Extending into new, high-growth markets – aiming to diversify into close-adjacent markets where we have strong market understanding and brand awareness.

•     Our new industrial automation products, which we launched at the end of FY2023, have generated a positive response from customers during the first year, and we are now focused on expanding our sales teams and developing routes to market.

·    Other strategic progress this year includes:

•     Completed the first phase of expansion of production facility at Miskin on time and under budget.  The first of two new halls is now operational, providing additional production capacity for our physically larger CMM, AM and encoder products.  

•     Established a comprehensive new ESG strategy and continued to make progress on reducing carbon emissions in line with our Net Zero targets.

Will Lee, Renishaw Chief Executive, commented:

“The start of FY2025 has seen continuing improvement in demand for our encoder products from the semiconductor manufacturing sector, primarily in the APAC region. This, together with a range of growth opportunities that we are pursuing, especially for metrology and additive manufacturing systems, means that we are expecting to achieve solid revenue growth in the year ahead. 

We continue to focus on improving productivity in all areas. We expect these efforts, together with higher sales volumes, to drive our operating profit margin towards our target, although inflationary pressures, especially people costs, will affect the rate of improvement in the near term. 

The progress we’ve made against our three key strategic focus areas this year gives me confidence in our organic growth strategy, and we continue to invest for long-term success.”