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Investors responded enthusiastically today to the announcement of the preliminary results for Renishaw’s (LSE:RSW) fiscal year ending 30 June 2014. Recording both record quarterly and annual revenues along with a 17% increase in pretax profits sent the Renishaw share price through the roof with an incredible 22.52% (331.00 pence) increase to 1,801.00. Even before the market had opened this morning, Renishaw shares had vaulted by nearly 9% from yesterday’s close of 1,470.00 to 1,600.00.
The Bottom Line
- Fourth quarter revenue was a record £107.0 million
- Annual revenue was a record £355.5 million, up 2% from the previous year
- Pretax profit increased by 17% from £82.1 million to £96.4 million
- Profit from continuing operations increased 21.7% from £67,050 million to £85,666
- Earnings per share (Now we’re talking) increased 27% from 92.9 to 118.4 pence
Between the Lines
Whilst I could spend time talking about how Renishaw’s business has increased in selected geographic markets, that fact that it has done so is readily apparent giving its record operational performance. The question is, “What are the driving factors the produced his performance?” Well, they include:
- The introduction of Renishaw’s new high-speed, ultra-accurate, contact scanning technology, dubbed SPRINT™. One of the standout features of SPRINT™ is its adaptability for on-machine CNC probative measuring. The technology is, as the company advertises it to be, “game changing” for a broad spectrum of manufacturing.
- The release of its highly innovative ATOM™ optical incremental miniature encoder device for both linear and rotary systems. The importance of this new read head is described on the company website as “unique in the marketplace and represents a significant advance in the performance and reliability of miniature encoders” for its “dirt immunity, signal stability and reliability.”
- The approval of the US Food and Drug Administration (FDA) of the company’s neuromate® stereotactic robot for the cranial implantation of electrodes for deep brain stimulation, stereoelectroencephalography, biopsy and neuro-endoscopy. (I think I just drove my spell checker nuts!)
- Significantly increasing demand for its 3D casting systems that are used in rapid prototyping and being espoused more and more by the worldwide MakerMovement to produce high-performance polymer and metal components for an almost limitless range of products from personal prosthetic devices to automotive engine blocks, each manufactured to precision.
As to that last point, I strongly recommend reading my column published on 10 October 2013, “3D Printing: A Sleeping Giant for Investors.”
It is a rare company that has been and continues to be able to introduce exceptional innovation from manufacturing applications to medical diagnostics and neurosurgery. In other words, its products are not mired in a niche that will eventually expire. Rather, the range of applications is so broad and so advanced that, as long as the company continues its development and operational disciplines, its products will be in ever-increasing demand.
On a personal note, I was rather pleased to see that, in Renishaw’s typical manner, the report did not include eloquent executive explanations for why things are the way they are. Renishaw pretty much let the results speak for themselves.
