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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Renishaw Plc | LSE:RSW | London | Ordinary Share | GB0007323586 | ORD 20P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 130.00 | 3.20% | 4,195.00 | 4,175.00 | 4,185.00 | 4,200.00 | 4,095.00 | 4,115.00 | 109,990 | 16:35:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Electrical Machy, Equip, Nec | 688.57M | 116.1M | 1.5966 | 26.21 | 3.04B |
From Apr 2019 to Apr 2024
TIDMRSW
RNS Number : 1340V
Renishaw PLC
26 January 2017
Renishaw plc
26th January 2017
Interim report 2017 - for the six months ended 31st December 2016
Highlights
Hot Features
Premium
6 months to Restated* Restated*
31st December 6 months Year ended
2016 to 30th June
GBP'000 31st December 2016
2015 GBP'000
GBP'000
Revenue 240,424 198,488 436,598
Operating profit 35,568 28,455 85,171
Profit before taxation 35,694 28,595 85,694
Earnings per share 41.0p 32.4p 98.4p
Proposed dividend per
share 12.5p 12.5p 48.0p
* Previous year figures have been restated for the following:
1. The results of Renishaw Diagnostics Limited have been excluded, as this business has been reclassified as a discontinued activity, see Chairman's statement below and note 5.
2. The R&D tax credit, previously accounted for within the Income tax expense line has been reclassified to be part of administration expenses, thereby showing it as part of the profit before tax. This reclassification increased the Profit before tax by GBP1,100,000 for the current first half year, by GBP938,000 for the six months ended 31st December 2015 and by GBP2,420,000 for the year ended 30th June 2016.
Chairman's statement
I am pleased to report our group results for the six months to 31st December 2016.
Highlights
-- First half year revenue of GBP240.4m, compared with previous year of GBP198.5m. -- Revenue growth of 21%, 12% at constant exchange rates. -- First half year profit before tax of GBP35.7m, compared with restated* GBP28.6m last year.
Trading results
Revenue for the six months ended 31st December 2016 was GBP240.4m, compared with GBP198.5m for the corresponding period last year, an increase of 21%, reflecting an underlying growth of 12% and a currency benefit of 9%.
Geographically, there was revenue growth in all regions. Revenue in the Far East grew by 27%, from GBP85.5m last year to GBP108.7m (18% at constant exchange rates). In Europe, revenue increased by 18%, from GBP52.1m to GBP61.3m (3% at constant exchange rates), in the Americas, revenue was higher by 11%, from GBP43.7m to GBP48.6m (6% at constant exchange rates) and in the UK revenue was up by 20%, from GBP11.0m to GBP13.2m.
Group profit before tax for the first half year increased by 25% to GBP35.7m (GBP26.5m at constant exchange rates), compared with a restated GBP28.6m last year. Earnings per share were 41.0p, compared with 32.4p last year.
The Group's cost base increase largely reflects investments made in the previous year, including an increase in labour costs supporting global marketing expansion, further strategic investment in our research and development programmes and investment in skills for future growth. Across the Group, we continue to focus on our operating costs. Exchange rate movements have given rise to higher overseas operating costs in Sterling terms.
Metrology
Revenue in our metrology sector for the first six months was GBP227.1m, compared with GBP184.9m last year. Operating profit was GBP41.6m, compared with GBP30.6m for the comparable period last year.
There was particularly strong growth in our encoder and laser calibration products lines.
In our laser calibration products line, we launched the XM-60 multi-axis calibrator. Designed for the machine tool market, it is a highly accurate laser system used to capture multiple machine errors in a single set-up.
We have also established a new subsidiary in Turkey to expand our marketing, sales, service and distribution infrastructure.
Healthcare
Revenue in our healthcare sector for the first six months was GBP13.3m, compared with GBP13.6m last year and there was an operating loss of GBP6.0m, compared with a loss (restated) of GBP2.2m for the comparable period last year.
We have experienced growth in our neurological products line, including the sale of two stereotactic robots during the period, one in the UK and one in the USA.
In our spectroscopy products line, we introduced the RA802 pharmaceutical analyser, designed exclusively for the pharmaceutical industry, enabling users to formulate tablets more efficiently by speeding up the analysis of tablet composition and structure.
Healthcare revenue prospects for the second half are positive with a strong order book in each of our neurological, spectroscopy and medical dental products lines.
Renishaw Diagnostics Limited (RDL)
As reported in our trading update in October 2016, the Board decided to discontinue operations at RDL, resulting in the closure of the business. Subsequently, certain assets of the business were sold.
In the first half year results, the RDL business has been accounted for as a discontinued activity, with comparative figures for the previous year being restated accordingly. The after tax loss of GBP3.5m accounted for as a discontinued activity comprises the running costs for RDL, including cessation costs and impairment write offs for assets and goodwill, less amounts received. The after tax loss in the equivalent period of the prior year was GBP1.2m.
Continued investment for long-term growth
We continue to maintain our investment in research and development, where net engineering expenditure increased by 15% to GBP38.3m, compared with GBP33.3m last year.
Capital expenditure for the first half year was GBP25.9m. Expenditure on property totalled GBP16.4m and included completion of our new USA headquarters in Chicago, which is now being occupied.
Expenditure on plant and equipment was GBP9.5m, where we continued to expand our manufacturing facilities, mainly in the UK, and continued investment in our global IT and distribution infrastructure.
Working capital
Net cash balances at 31st December 2016 were GBP14.0m, compared with GBP33.3m at 31st December 2015 and GBP21.3m at 30th June 2016.
Additionally, there is an escrow account of GBP15.3m (31st December 2015: GBP13.9m, 30th June 2016: GBP15.3m) relating to the provision of security to the UK defined benefit pension scheme, which was closed to future accrual in 2007.
Inventory balances at 31st December 2016 were GBP90.8m, a reduction of GBP4.2m compared with 30th June 2016.
Employees
The workforce at the end of December 2016 was 4,358, an increase of 72 since June 2016. Included in the net increase were 76 graduates and apprentices. The directors thank employees for their valued support and contribution as the Group continues to develop and expand.
Outlook
Notwithstanding current economic uncertainties, the Board remains confident in the future prospects of the Group. We continue to anticipate growth in both revenue and profit in this financial year and expect full year revenue to be in the range of GBP500m to GBP530m and Profit before tax to be in the range of GBP85m to GBP105m.
Dividends
A maintained interim dividend of 12.5 pence net per share will be paid on 7th April 2017 to shareholders on the register on 10th March 2017.
Investor Day
An investor day is being held on 11th May 2017 and registration details will be published in due course.
* Previous year figures have been restated for the following:
1. The results of Renishaw Diagnostics Limited have been excluded, as this business has been reclassified as a discontinued activity.
2. The R&D tax credit, previously accounted for within the Income tax expense line has been reclassified to be part of administration expenses, thereby showing it as part of the profit before tax.
Sir David R McMurtry
CBE, RDI, FRS, FREng, CEng, FIMechE
Chairman and Chief Executive,
26th January 2017
Consolidated income statement
Unaudited
Restated Restated
6 months 6 months Year ended
to to 30th June
31st December 31st December 2016
Continuing operations Notes 2016 2015 GBP'000
GBP'000 GBP'000
Revenue 2 240,424 198,488 436,598
Cost of sales (125,077) (104,826) (216,142)
Gross profit 115,347 93,662 220,456
Distribution costs (56,156) (44,717) (97,184)
Administrative expenses (23,623) (20,490) (38,101)
Operating profit 35,568 28,455 85,171
Financial income 3 368 460 872
Financial expenses 3 (1,112) (910) (1,800)
Share of profits from associates 870 590 1,451
Profit before tax 35,694 28,595 85,694
Income tax expense 4 (5,961) (5,282) (14,583)
Profit for the period from continuing
operations 29,733 23,313 71,111
Loss for the period from discontinued
operations 5 (3,503) (1,233) (2,540)
Profit for the period 26,230 22,080 68,571
--------------------------------------- -------- ---------------- --------------- ------------
Profit attributable to:
Equity shareholders of the parent
company 26,360 22,381 69,095
Non-controlling interest (130) (301) (524)
--------------------------------------- -------- ---------------- --------------- ------------
Profit for the period 26,230 22,080 68,571
--------------------------------------- -------- ---------------- --------------- ------------
Pence pence pence
Dividend per share arising in
respect of the period 10 12.5 12.5 48.0
--------------------------------------- -------- ---------------- --------------- ------------
Earnings per share from continuing
operations
(basic and diluted) 6 41.0 32.4 98.4
--------------------------------------- -------- ---------------- --------------- ------------
Loss per share from discontinued
operations
(basic and diluted) 6 (4.8) (1.7) (3.5)
--------------------------------------- -------- ---------------- --------------- ------------
Consolidated statement of comprehensive income and expense
Unaudited Audited
6 months 6 months Year ended
to to 30th June
31st December 31st December 2016
2016 2015 GBP'000
GBP'000 GBP'000
Profit for the period 26,230 22,080 68,571
------------------------------------------------ ---------------- ---------------- ------------
Other items recognised directly in equity:
Items that will not be reclassified to
the Consolidated income statement:
Remeasurement of defined benefit pension
liabilities (2,525) (904) (20,868)
Deferred tax on remeasurement of defined
benefit pension liabilities 728 (150) 3,480
Total for items that will not be reclassified (1,797) (1,054) (17,388)
------------------------------------------------ ---------------- ---------------- ------------
Items that may be reclassified subsequently
to the Consolidated income statement:
Foreign exchange translation differences 5,490 1,000 8,409
Comprehensive income and expense of associates 84 - 753
Effective portion of changes in fair
value of cash flow hedges, net of recycling (18,601) (28,045) (91,168)
Deferred tax on effective portion of
changes in fair value of cash flow hedges 3,534 5,543 17,537
Total for items that may be reclassified (9,493) (21,502) (64,469)
------------------------------------------------ ---------------- ---------------- ------------
Total other comprehensive income and
expense, net of tax (11,290) (22,556) (81,857)
------------------------------------------------ ---------------- ---------------- ------------
Total comprehensive income and expense
for the period 14,940 (476) (13,286)
------------------------------------------------ ---------------- ---------------- ------------
Attributable to:
Equity shareholders of the parent company 15,070 (175) (12,762)
Non-controlling interest (130) (301) (524)
Total comprehensive income and expense
for the period 14,940 (476) (13,286)
------------------------------------------------ ---------------- ---------------- ------------
Consolidated balance sheet
Unaudited
Audited
At 31st December At 31st December At 30th June
2016 2015 2016
Notes GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 7 230,595 191,217 213,917
Intangible assets 8 60,790 58,944 61,255
Investments in associates 9 6,256 3,760 5,658
Deferred tax assets 44,330 20,516 40,996
Derivatives 10 505 4,874 76
------------------------------------- -------- ------------------- ------------------- --------------
Total non-current assets 342,476 279,311 321,902
------------------------------------- -------- ------------------- ------------------- --------------
Current assets
Inventories 90,802 91,704 94,959
Trade receivables 111,753 85,148 114,945
Current tax 2,740 1,042 1,166
Other receivables 16,615 14,606 18,090
Derivatives 10 99 7,325 859
Pension scheme cash escrow
account 11 15,317 13,890 15,279
Cash and cash equivalents 26,490 33,350 31,278
Total current assets 263,816 247,065 276,576
------------------------------------- -------- ------------------- ------------------- --------------
Current liabilities
Trade payables 20,025 16,440 22,379
Overdraft 12,519 - 9,975
Current tax 1,130 1,840 3,558
Provisions 2,793 2,487 2,375
Derivatives 10 31,180 4,681 19,987
Other payables 19,707 17,089 18,345
------------------------------------- -------- ------------------- ------------------- --------------
Total current liabilities 87,354 42,537 76,619
------------------------------------- -------- ------------------- ------------------- --------------
Net current assets 176,462 204,528 199,957
------------------------------------- -------- ------------------- ------------------- --------------
Non-current liabilities
Employee benefits 11 68,725 48,586 67,823
Deferred tax liabilities 21,999 17,271 21,999
Derivatives 10 57,729 14,099 50,652
Other payables - 589 -
------------------------------------- -------- ------------------- ------------------- --------------
Total non-current liabilities 148,453 80,545 140,474
------------------------------------- -------- ------------------- ------------------- --------------
Total assets less total liabilities 370,485 403,294 381,385
------------------------------------- -------- ------------------- ------------------- --------------
Equity
Share capital 10 14,558 14,558 14,558
Share premium 10 42 42 42
Currency translation reserve 10 12,022 (1,714) 6,448
Cash flow hedging reserve 10 (71,527) (5,331) (56,460)
Retained earnings 10 416,442 399,138 420,419
Other reserve 10 (460) (460) (460)
------------------------------------- -------- ------------------- ------------------- --------------
Equity attributable to the
shareholders of the parent
company 371,077 406,233 384,547 Non-controlling interest 10 (592) (2,939) (3,162) Total equity 370,485 403,294 381,385 ------------------------------------- -------- ------------------- ------------------- --------------
Consolidated statement of changes in equity
Unaudited
Currency Cash Non-
Share Share translation flow Retained Other controlling
capital premium reserve hedging earnings reserve interest Total
GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Balance at 1st
July
2015 14,558 42 (2,714) 17,171 402,559 (460) (2,638) 428,518
Profit/(loss)
for the
period - - - - 22,381 - (301) 22,080
Other
comprehensive
income and
expense (net
of tax)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Remeasurement of
defined
benefit pension
liabilities - - - - (1,054) - - (1,054)
Foreign exchange
translation
differences - - 1,000 - - - - 1,000
Changes in fair
value
of cash flow
hedges - - - (22,502) - - - (22,502)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Total other
comprehensive
income - - 1,000 (22,502) (1,054) - - (22,556)
Total
comprehensive
income - - 1,000 (22,502) 21,327 - (301) (476)
Transactions
with owners
recorded in
equity
Dividends paid - - - - (24,748) - - (24,748)
Balance at 31st
December
2015 14,558 42 (1,714) (5,331) 399,138 (460) (2,939) 403,294
Profit/(loss)
for the
period - - - - 46,714 - (223) 46,491
Other
comprehensive
income and
expense (net
of tax)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Remeasurement of
defined
benefit pension
liabilities - - - - (16,334) - - (16,334)
Foreign exchange
translation
differences - - 7,409 - - - - 7,409
Relating to
associates - - 753 - - - 753
Changes in fair
value
of cash flow
hedges - - - (51,129) - - - (51,129)
Total other
comprehensive
income - - 8,162 (51,129) (16,334) - - (59,301)
Total
comprehensive
income - - 8,162 (51,129) 30,380 - (223) (12,810)
Transactions
with owners
recorded in
equity
Dividends paid - - - - (9,099) - - (9,099)
Balance at 30th
June
2016 14,558 42 6,448 (56,460) 420,419 (460) (3,162) 381,385
Profit/(loss)
for the
period - - - - 26,360 - (130) 26,230
Other
comprehensive
income and
expense (net
of tax)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Remeasurement of
defined
benefit pension
liabilities - - - - (1,797) - - (1,797)
Foreign exchange
translation
differences - - 5,490 - - - - 5,490
Relating to
associates - - 84 - - - - 84
Changes in fair
value
of cash flow
hedges - - - (15,067) - - - (15,067)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Total other
comprehensive
income - - 5,574 (15,067) (1,797) - - (11,290)
Total
comprehensive
income - - 5,574 (15,067) 24,563 - (130) 14,940
Acquisition of
non-controlling
interest - - - - (2,700) - 2,700 -
Dividends paid - - - - (25,840) - - (25,840)
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Transactions
with owners
recorded in
equity - - - - (28,540) - 2,700 (25,840)
Balance at 31st
December
2016 14,558 42 12,022 (71,527) 416,442 (460) (592) 370,485
----------------- ---------- ---------- ------------ --------- ----------- ---------- ------------- ----------
Consolidated statement of cash flow
Unaudited
Restated Restated
6 months 6 months Year ended
to to 30th June
31st December 31st December 2016
2016 2015 GBP'000
GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 26,230 22,080 68,571
--------------------------------------- ---------------- --------------- ------------
Amortisation of development costs 5,756 4,417 9,116
Amortisation of other intangibles 2,605 1,149 2,313
Depreciation 10,716 8,736 18,258
Loss/(profit) on sale of property,
plant and equipment 170 (64) 166
Share of profits from associates (870) (590) (1,451)
Financial income (368) (460) (872)
Financial expenses 1,112 910 1,800
Tax expense 5,961 5,282 14,583
--------------------------------------- ---------------- --------------- ------------
25,082 19,380 43,913
--------------------------------------- ---------------- --------------- ------------
Decrease/(increase) in inventories 4,157 (14,031) (17,286)
Decrease/(increase) in trade and
other receivables 8,358 17,569 (2,951)
(Decrease)/increase in trade and
other payables (1,428) (16,688) (12,439)
Increase in provisions 418 772 660
11,505 (12,378) (32,016)
--------------------------------------- ---------------- --------------- ------------
Defined benefit pension contributions (2,415) (1,297) (2,708)
Income taxes paid (9,075) (14,713) (22,581)
Cash flows from operating activities 51,327 13,072 55,179
--------------------------------------- ---------------- --------------- ------------
Investing activities
Purchase of property, plant and
equipment (25,896) (28,734) (52,996)
Development costs capitalised (7,177) (6,032) (12,246)
Purchase of other intangibles (80) (401) (1,294)
Investment in subsidiaries and
associates - - (284)
Sale of property, plant and equipment 1,399 266 826
Interest received 368 460 872
Dividends received from associates 356 310 310
Payments (to)/from pension scheme
escrow account (net) (38) 841 (548)
--------------------------------------- ---------------- --------------- ------------ Cash flows from investing activities (31,068) (33,290) (65,360) --------------------------------------- ---------------- --------------- ------------ Financing activities Interest paid (320) (25) (231) Dividends paid (25,840) (24,748) (33,847) --------------------------------------- ---------------- --------------- ------------ Cash flows from financing activities (26,160) (24,773) (34,078) --------------------------------------- ---------------- --------------- ------------ Net decrease in cash and cash equivalents (5,901) (44,991) (44,259) Cash and cash equivalents at the beginning of the period 21,303 82,171 82,171 Effect of exchange rate fluctuations on cash held (1,431) (3,830) (16,609) --------------------------------------- ---------------- --------------- ------------ Cash and cash equivalents at the end of the period 13,971 33,350 21,303 --------------------------------------- ---------------- --------------- ------------
Responsibility statement
We confirm that to the best of our knowledge:
-- As required by DTR 4.2 of the Disclosure Rules and Transparency Rules, the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole. The Interim report has been prepared in accordance with the EU endorsed standard IAS 34, 'Interim financial reporting'.
-- The Interim report includes a fair review of the information required by:
(a) DTR 4.2.7 of the Disclosure Rules and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8 of the Disclosure Rules and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board
A C G Roberts FCA
Group Finance Director
26th January 2017
Notes
1. Status of Interim report and accounting policies
The Interim report, which has not been audited, was approved by the directors on 26th January 2017.
General information
The Interim report has been prepared in accordance with the EU endorsed standard IAS 34, 'Interim financial reporting'. 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 2016, as revised for the implementation of specified new amended endorsed standards or interpretations.
Given the nature of some forward-looking information included in this report, which the directors have given in good faith, this information should be treated with due caution. The Interim report is available on our website www.renishaw.com.
The interim financial information for the six months to 31st December 2016 and the comparative figures for the six months to 31st December 2015 are unaudited. The comparative figures for the financial year ended 30th June 2016 are not the Company's 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 (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006, relating to the accounting records of the Company.
Going concern
The Group has considerable financial resources at its disposal and the directors have considered the current financial projections. As a consequence, the directors believe that the Group is well placed to manage its business risks successfully.
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the next twelve months. Accordingly, they continue to adopt the going concern basis in preparing the Interim report.
Accounting policies
The accounting policies applied and significant estimates used by the Group in this Interim report are the same as those applied by the Group for the year ended 30th June 2016.
2. Segmental information
Renishaw's business is metrology, the science of measurement. The Group manages its business in two business segments, Metrology, being the traditional core business, and Healthcare.
Our products / Metrology
Our metrology products help manufacturers to maximise production output, significantly reduce the time taken to produce and inspect components, and keep their machines running reliably. In the fields of industrial automation and motion systems, our position measurement and calibration systems allow machine builders to manufacture highly accurate and reliable products.
The product range includes the following:
Co-ordinate measuring machine (CMM) products
Sensors, software and control systems for three-dimensional CMMs, including touch-trigger and scanning probes, automated probe changers, motorised indexing probe heads and 5-axis measurement systems, which enable the highly accurate measurement of manufactured components and finished assemblies.
Machine tool probe systems
Sensors and software for computer numerically controlled (CNC) metal-cutting machine tools that allow the automation of setting and on-machine measurement operations, leading to more productivity from existing machines and reductions in scrap and rework. These include laser tool setters, contact tool setters, tool breakage detectors, touch probes, contact scanning systems and high--accuracy inspection probes.
Styli for probe systems
Precision styli that attach to probe sensors for CMMs, machine tools and Equator(TM) gauging systems to ensure that accurate measurement data is acquired at the point of contact.
Performance testing products
Calibration and testing products to determine the positioning accuracy of a wide range of industrial and scientific machinery to international standards, including a laser interferometer, rotary axis calibrator, wireless telescoping ballbar and software for data capture and analysis.
Gauging
Equator(TM) enables process control by delivering highly repeatable, thermally insensitive, versatile and reprogrammable gauging to the shop floor, both as a standalone device and as part of an automated manufacturing cell. Combined with INTUO(TM) software, Equator is also an ideal alternative to traditional manual gauging, with training in a few hours, allowing engineers to program parts in minutes.
Spatial measurement
High-speed laser measurement and surveying systems for use in extreme environments, such as mine and quarry surveying, marine positioning and mobile mapping.
Fixtures
Modular and custom fixtures used to hold parts securely for dimensional inspection on CMM, vision and gauging systems.
Position encoders
Position encoders that ensure accurate linear and rotary motion control in a wide range of applications from electronics, flat panel displays, robotics and semiconductors to medical, precision machining and print production. These include magnetic encoders, incremental optical encoders, absolute optical encoders and laser interferometer encoders.
Additive manufacturing (AM)
Advanced metal AM systems for direct manufacturing of 3D-printed metallic components. A total solution is offered from systems, materials, ancillaries and software through to consultancy, training and support for a range of industries including industrial, healthcare and mould tooling.
Vacuum casting
Vacuum casting machines from entry-level to high capacity for rapid prototyping and production of polymer end-use parts.
Our products / Healthcare
Our technologies are helping within applications such as craniomaxillofacial surgery, dentistry, neurosurgery, chemical analysis and nanotechnology research. These include engineering solutions for stereotactic neurosurgery, analytical tools that identify and characterise the chemistry and structure of materials, the supply of implants to hospitals and specialist design centres for craniomaxillofacial surgery, and products and services that allow dental laboratories to manufacture high-quality dental restorations.
The product range includes the following:
Dental scanners
3D contact scanners and non-contact optical scanners used for digitising of dental preparations and the measurement of implant locations for tooth-supported frameworks and custom abutments.
Dental computer-aided design (CAD) software
Dental CAD software that allows set--up of scanning routines and enables laboratory staff to design abutments and structures for crowns and bridges, including powerful anatomic design functions.
Dental structures manufacturing service
A central manufacturing service that can handle CAD files from a wide variety of dental CAD systems to produce structures for crowns and bridges in zirconia, cobalt chrome, PMMA (used for temporary restorations) and wax, and abutments in cobalt chrome.
Craniomaxillofacial custom-made implants
Additively manufactured from titanium, custom-made craniomaxillofacial implants are structural implants that are used in the reconstruction of a patient's head, face or jaw. These are most commonly required after oncology treatment or as a result of trauma.
Neurosurgical robot
A stereotactic robot that provides a platform solution for a broad range of functional neurosurgical procedures including deep brain stimulation (DBS), stereoelectroencephalography (SEEG), neuroendoscopy and stereotactic biopsies, and is being used within the context of trials for both neurosurgical disorders and brain oncology.
Neurosurgical planning software
Software that allows advanced planning of targets and trajectories for stereotactic neurosurgery.
Neurosurgical implants
Implantable devices that allow surgeons to verify expected DBS electrode position relative to targeted anatomy using magnetic resonance imaging (MRI) for the treatment of Parkinson's disease, other movement disorders and neuropathic pain.
Neurosurgical accessories
Specialist electrodes and instruments for use in epilepsy neurosurgery, manufactured by DIXI Medical.
Raman microscopes
Scientists and engineers worldwide use Renishaw's research-grade inVia Raman microscope for the non-destructive chemical analysis and imaging of materials. Its high-speed, high-quality results and upgradeability are valued in fields as diverse as nanotechnology, biology and pharmaceuticals.
Hybrid Raman systems
Renishaw's hybrid systems unite the chemical analysis power of Raman spectroscopy with the high spatial resolution of other techniques, such as atomic force microscopy and scanning electron microscopy. These new instruments are vital tools for investigating materials and devices for nanotechnology applications.
Turn-key Raman analysis
The RA800 benchtop platform provides companies with a high performance chemical imaging and analysis system that can be tailored for the needs of their customers. RA800 gives research-grade Raman microscopy performance in a Class 1 laser-safe, simple-to-use form.
Segmental financial results were:
6 months to 31st December 2016 Metrology Healthcare Total
GBP'000 GBP'000 GBP'000
Revenue 227,083 13,341 240,424
Depreciation and amortisation 15,402 1,783 17,185
Operating profit/(loss) 41,588 (6,020) 35,568
Share of profits from associates 870 - 870
Net financial expense - - (744)
Profit before tax - - 35,694
-------------------------------------- ---------- ----------- --------
6 months to 31st December 2015
(restated)
Revenue 184,905 13,583 198,488
Depreciation and amortisation 12,648 1,475 14,123
Operating profit/(loss) 30,612 (2,157) 28,455
Share of profits from associates 590 - 590
Net financial expense - - (450)
Profit before tax - - 28,595
-------------------------------------- ---------- ----------- --------
Year ended 30th June 2016 (restated)
Revenue 408,184 28,414 436,598
Depreciation and amortisation 26,334 2,966 29,300
Operating profit/(loss) 88,000 (2,829) 85,171
Share of profits from associates 1,451 - 1,451
Net financial expense - - (928)
Profit before tax - - 85,694
-------------------------------------- ---------- ----------- --------
There is no allocation of assets and liabilities to operating segments. Depreciation is included within certain other overhead expenditure which is allocated to segments on the basis of the level of activity.
The following table shows the analysis of revenue by geographical market:
6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Far East, including
Australasia 108,677 85,441 195,343
Continental Europe 61,290 52,116 112,075
North, South and
Central America 48,646 43,733 92,198
United Kingdom and
Ireland 13,208 11,009 23,208
Other regions 8,603 6,189 13,774
Total group revenue 240,424 198,488 436,598
--------------------- --------------- --------------- -----------
Revenue in the above table has been allocated to regions based on the geographical location of the customer. Countries with individually material revenue figures in the context of the Group were:
6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
China 58,176 45,510 107,628
USA 41,245 38,576 79,984
Germany 26,194 21,729 48,509
Japan 24,755 23,275 49,328
There was no revenue from transactions with a single external customer amounting to 10% or more of the Group's total revenue
for the period.
The following table shows the analysis of non-current assets, excluding deferred tax and derivatives, by geographical area:
At At At
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
United Kingdom 188,258 180,026 190,396
Overseas 109,383 73,895 90,434
297,641 253,921 280,830
---------------- --------------- --------------- -----------
No overseas country had non-current assets amounting to 10% or more of the Group's total non-current assets.
3. Financial income and expenses
Financial income 6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Bank interest receivable 368 460 872
-------------------------- --------------- --------------- -----------
Financial expenses 6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Interest on pension schemes'
liabilities 792 885 1,569
Bank interest payable 320 25 231
1,112 910 1,800
------------------------------ --------------- --------------- -----------
4. Income tax expense
The income tax expense has been estimated at a rate of 16.7% (December 2015: 18.5%), the rate expected to be applicable for the full year.
5. Discontinued operations
On 13th October 2016, the Group announced that it had decided to discontinue operations at Renishaw Diagnostics Limited (RDL). Financial information relating to the discontinued operation is set out below.
6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Operating loss, comprising
operating costs of RDL 2,142 1,573 3,238
Goodwill impairment 1,784 - -
Loss before tax 3,926 1,573 3,238
Tax credit (423) (340) (698)
Loss for the period from discontinued
operations 3,503 1,233 2,540
--------------------------------------- --------------- --------------- -----------
6 months to 6 months to Year ended
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities (1,613) (1,114) (1,838)
Cash flows from investing
activities 916 (451) (827)
Net decrease in cash and cash
equivalents from discontinued
operations (697) (1,565) (2,665)
-------------------------------- --------------- --------------- -----------
6. Earnings per share
The earnings per share on continuing operations for the six months ended 31st December 2016 is calculated on earnings of GBP29,863,000 (December 2015: GBP23,614,000) and on 72,788,543 shares, being the number of shares in issue during the period.
The earnings per share on continuing operations for the year ended 30th June 2016 is calculated on earnings of GBP71,635,000 and on 72,788,543 shares, being the number of shares in issue during that year.
The loss per share on discontinued operations for the six months ended 31st December 2016 is calculated on losses of GBP3,503,000 (December 2015: GBP1,233,000) and on 72,788,543 shares, being the number of shares in issue during the period.
The loss per share on discontinued operations for the year ended 30th June 2016 is calculated on losses of GBP2,540,000 and on 72,788,543 shares, being the number of shares in issue during that year.
7. Property, plant and equipment
Freehold Plant and Motor Assets Total
land and equipment vehicles in the GBP'000
buildings GBP'000 GBP'000 course
GBP'000 of construction
GBP'000
Cost
At 1st July 2016 142,665 187,048 9,600 14,886 354,199
Additions 2,614 5,223 534 17,525 25,896
Transfers 3,596 1,171 - (4,767) -
Disposals - (3,400) (445) - (3,845)
Currency adjustment 2,697 1,560 191 - 4,448
At 31st December 2016 151,572 191,602 9,880 27,644 380,698
----------------------- ----------- ------------ ----------- ----------------- ----------
Depreciation
At 1st July 2016 27,241 107,045 5,996 - 140,282
Charge for the period 1,360 8,629 727 - 10,716
Released on disposals - (1,916) (360) - (2,276)
Currency adjustment 484 781 116 - 1,381
At 31st December 2016 29,085 114,539 6,479 - 150,103
----------------------- ----------- ------------ ----------- ----------------- ----------
Net book value
At 31st December 2016 122,487 77,063 3,401 27,644 230,595
----------------------- ----------- ------------ ----------- ----------------- ----------
At 30th June 2016 115,424 80,003 3,604 14,886 213,917
----------------------- ----------- ------------ ----------- ----------------- ----------
Additions to assets in the course of construction of GBP17,525,000 (December 2015: GBP23,137,000) comprise GBP13,765,000 (December 2015: GBP10,688,000) for freehold land and buildings and GBP3,760,000 (December 2015: GBP12,449,000) for plant and equipment.
At the end of the period, assets in the course of construction, not yet transferred, of GBP27,644,000 (December 2015: GBP18,374,000) comprise GBP21,484,000 (December 2015: GBP10,673,000) for freehold land and buildings and GBP6,160,000 (December 2015: GBP7,701,000) for plant and equipment.
8. Intangible assets
Goodwill Other intangible Internally Software
on consolidation assets generated
development
costs
licences Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1st July 2016 21,268 11,249 101,463 22,587 156,567
Additions - - 7,177 80 7,257
Disposals (1,784) - - - (1,784)
Currency adjustment 604 40 - 28 672
At 31st December
2016 20,088 11,289 108,640 22,695 162,712
---------------------- ------------------ ----------------- ------------- ---------- ------------
Amortisation
At 1st July 2016 - 10,939 67,682 16,691 95,312
Charge for the
period 1,784 171 5,756 650 8,361
Released on disposal (1,784) - - - (1,784)
Currency adjustment - 7 - 26 33
At 31st December
2016 - 11,117 73,438 17,367 101,922
---------------------- ------------------ ----------------- ------------- ---------- ------------
Net book value
At 31st December
2016 20,088 172 35,202 5,328 60,790
---------------------- ------------------ ----------------- ------------- ---------- ------------
At 30th June 2016 21,268 310 33,781 5,896 61,255
---------------------- ------------------ ----------------- ------------- ---------- ------------
The analysis of acquired goodwill on consolidation is:
Acquisition of: At At At
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
itp GmbH 2,960 2,546 2,886
Renishaw Mayfield S.A. 1,794 1,537 1,738
Measurement Devices Limited 6,661 6,661 6,661
Renishaw Software Limited 1,559 1,559 1,559
R&R Fixtures, LLC 5,585 4,679 5,168
Renishaw Diagnostics Limited
(92.4%) - 1,784 1,784
Other smaller acquisitions 1,529 1,370 1,472
Balance at the end of the
period 20,088 20,136 21,268
------------------------------- --------------- --------------- -----------
During the period, the total amount of goodwill relating to Renishaw Diagnostics Limited was written off, see note 5.
9. Investments in associates
Movements during the period 6 months to 6 months to Year ended
were: 31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Balance at the beginning
of the period 5,658 3,480 3,480
Dividends received (356) (310) (310)
Share of profits of associates 870 590 1,451
Other comprehensive income
and expense 84 - 753
New investments - - 284
Balance at the end of the
period 6,256 3,760 5,658
-------------------------------- --------------- --------------- -----------
10. Capital and reserves
Share capital At At At
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Allotted, called-up and fully
paid
72,788,543 ordinary shares of
20p each 14,558 14,558 14,558
------------------------------- --------------- --------------- -----------
The ordinary shares are the only class of share in the Company. Holders of ordinary shares are entitled to vote at general meetings of the Company and receive dividends as declared. The Articles of Association of the Company do not contain any restrictions on the transfer of shares nor on voting rights.
Currency translation reserve
The currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of the foreign operations, offset by foreign exchange differences on bank liabilities which have been accounted for directly in equity on account of them being classified as hedging items.
Cash flow hedging reserve
The cash flow hedging reserve comprises all foreign exchange differences arising from the valuation of forward exchange contracts which are effective hedges and mature after the period end. These are valued on a mark-to-market basis, are accounted for directly in equity and are recycled through the Consolidated income statement when the hedged item affects the Consolidated income statement. The forward contracts mature over the next three and a half years.
Movements during the period were: 6 months to 6 months Year ended
31st December to 30th June
2016 31st December 2016
GBP'000 2015 GBP'000
GBP'000
Balance at the beginning of the
period (56,460) 17,171 17,171
Amounts transferred to the Consolidated
income statement 8,975 (8,189) (14,125)
Revaluations during the period (27,576) (19,856) (77,043)
Deferred tax movement 3,534 5,543 17,537
Balance at the end of the period (71,527) (5,331) (56,460)
----------------------------------------- --------------- --------------- -----------
The cash flow hedging reserve is analysed as:
At At At
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Derivatives in non-current assets 505 4,874 76
Derivatives in current assets 99 7,325 859
Derivatives in current liabilities (31,180) (4,681) (19,987)
Derivatives in non-current liabilities (57,729) (14,099) (50,652)
(88,305) (6,581) (69,704)
Included in deferred tax assets/liabilities 16,778 1,250 13,244
Balance at the end of the period (71,527) (5,331) (56,460)
--------------------------------------------- --------------- --------------- -----------
Dividends
Dividends paid during the period 6 months 6 months Year ended
were: to to 30th June
31st December 31st December 2016
2016 2015 GBP'000
GBP'000 GBP'000
2016 final dividend of 35.5p
per share (2015: 34.0p) 25,840 24,748 24,748
2016 interim dividend of 12.5p - - 9,099
Total dividends paid during
the period 25,840 24,748 33,847
----------------------------------- --------------- --------------- -----------
An interim dividend for 2017 of GBP9,098,568 (12.5p net per share) will be paid on 7th April 2017 to shareholders on the register on 10th March 2017, with an ex-div date of 9th March 2017.
Other reserve
The other reserve is in relation to additional investments in subsidiary undertakings.
Non-controlling interest
Movements during the period were: 6 months 6 months Year ended
to to 30th June
31st December 31st December 2016
2016 2015 GBP'000
GBP'000 GBP'000
Balance at the beginning of the
period (3,162) (2,638) (2,638)
Acquisition of remaining shareholding 2,700 - -
in Renishaw Mayfield A.G.
Share of loss for the period (130) (301) (524)
Balance at the end of the period (592) (2,939) (3,162)
--------------------------------------- --------------- --------------- -----------
11. Employee benefits
The Group operates a number of pension schemes throughout the world. The major scheme, which covers the UK-based employees, was of the defined benefit type. This scheme, along with the Ireland and USA defined benefit schemes, has ceased any future accrual for current members and all these schemes are now closed to new members. UK, Ireland and USA employees are now covered by defined contribution schemes.
The latest full actuarial valuation of the UK defined benefit scheme was carried out at September 2015 and updated to 31st December 2016 by a qualified independent actuary. The major assumptions used by the actuary were:
At At At
31st December 31st December 30th June
2016 2015 2016
Discount rate 2.9% 4.1% 3.2%
Inflation rate - RPI 3.7% 3.5% 3.3%
Inflation rate - CPI 2.7% 2.5% 2.3%
Retirement age 64 64 64
The assets and liabilities in the defined benefit schemes were:
At At At
31st December 31st December 30th June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Market value of assets 165,641 142,904 149,227
Actuarial value of liabilities
under IAS 19 (226,566) (175,890) (201,650)
-------------------------------- --------------- --------------- -----------
(60,925) (32,986) (52,423)
Increase in liability under
IFRIC 14 (7,800) (15,600) (15,400)
Deficit in the schemes (68,725) (48,586) (67,823)
-------------------------------- --------------- --------------- -----------
Deferred tax thereon 12,860 9,128 12,528
-------------------------------- --------------- --------------- -----------
The movements in the schemes' assets and liabilities were:
6 months 6 months to Year ended
to 31st December 30th June
31st December 2015 2016
2016 GBP'000 GBP'000
GBP'000
Balance at the beginning of
the period (67,823) (48,094) (48,094)
Contributions paid 2,415 1,297 2,708
Interest on pension schemes (792) (885) (1,569)
Remeasurement gain/(loss) under
IAS 19 (10,125) 4,496 (15,668)
Change in remeasurement loss
under IFRIC 14 7,600 (5,400) (5,200)
Balance at the end of the period (68,725) (48,586) (67,823)
---------------------------------- --------------- --------------- -----------
An agreement has been entered into with the trustees of the UK defined benefit pension scheme in relation to deficit funding plans which supersede the previous arrangements.
The Company has agreed to pay all monthly pensions payments and lump sum payments, and transfer payments up to a limit of GBP1,000,000 in each year (Benefits in Payment).
A number of UK properties owned by the Company are subject to registered fixed charges. One or more of the properties may be released from the fixed charge if on a subsequent valuation, the value of all properties under charge exceed 120% of the deficit.
The Company has also established an escrow bank account, which is subject to a registered floating charge. The balance of this account was GBP15,317,000 at the end of the period (December 2015: GBP13,890,000). The funds will be released back to the Company from the escrow account over a period of 6 years.
The agreement continues until 30th June 2031, but may end sooner if the deficit (calculated on a self-sufficiency basis as defined in the agreement) is eliminated in the meantime. At 30th June 2031 the Company is obliged to pay any deficit at that time. All properties will be released from charge when the deficit no longer exists.
The charges may be enforced by the trustees if one of the following occurs: (a) the Company does not pay any Benefits in Payment; (b) an insolvency event occurs in relation to the Company; or (c) the Company does not pay any deficit at 30th June 2031.
Under the Ireland defined benefit pension scheme deficit funding plan, a property owned by Renishaw (Ireland) Limited is subject to a registered fixed charge to secure the Ireland defined benefit pension scheme's deficit.
No scheme assets are invested in the Group's own equity.
The Company has given a guarantee relating to recovery plans for the UK defined benefit pension scheme. The value of the guarantee is greater than the value of the pension scheme's deficit. As such, in line with IFRIC 14, the UK defined benefit pension scheme's liabilities have been increased by GBP7,800,000, to represent the maximum discounted liability as at 31st December 2016 (2015: GBP15,600,000).
12. Deferred tax
On 26th October 2015, the reduction in the UK rate of corporation tax to 19% from 1st April 2017 and 17% from 1st April 2020 was substantively enacted. Deferred tax assets and liabilities have been calculated based on the rate expected to be applicable when the relevant items are expected to reverse.
13. Related party transactions
The only related party transactions which have taken place during the first half year were normal business transactions between the Group and its associates, which have not had a material effect on the results of the Group for this period.
14. Principal risks and uncertainties
As reported in the 2016 Annual report, the business implications of Brexit remain uncertain and any risks arising will be a key focus area for the risk committee for the foreseeable future. Currency fluctuations, trading arrangements, employment issues, research and development project funding and other risks that become apparent over time are under review by the committee and mitigations are being put in place where possible.
Area of Description Potential impact Mitigation
risk
Current Revenue growth Global market The Group is expanding
trading is unpredictable conditions continue and diversifying its
levels and orders from to highlight risks product range in order
and order customers generally to growth and to maintain a world-leading
book involve short demand which can position in its sales
lead-times with lead to fluctuating of metrology products.
the outstanding levels of revenue. Investment in sales and
order book at marketing resources continues
any time being Whilst global in order to support the
around one month's investment in breadth of the product
worth of revenue production systems range.
value. and processes
is expected to The Group is applying
expand, future its measurement expertise
growth is difficult to grow its healthcare
to predict, especially and additive manufacturing
with such a short-term business activities.
order book. This
limited forward The Group retains a strong
order visibility balance sheet and has
leaves the annual the ability to flex manufacturing
revenue forecasts resource levels and shift
uncertain. patterns.
Research The development Being at the leading Patent and intellectual
and development of new products edge of new technology property generation is
and processes in metrology and core to new product developments.
involves risk, healthcare, there R&D programmes are regularly
such as development are uncertainties reviewed against milestones
timescales, meeting whether new developments and, when necessary,
the required will provide an projects are cancelled.
technical specification economic return.
and the impact Medium to long-term R&D
of alternative strategies are monitored
technology developments. regularly by both the
Board and Executive Board,
including reviews of
the allocation of R&D
resource to key projects.
Product development processes
around the Group are
reviewed and aligned
where possible to provide
consistency and efficiency.
New products involve
beta testing at customers
to ensure they will meet
the needs of the market.
Market developments are
closely monitored.
Supply Customer deliveries Inability to meet Production facilities
chain management may be threatened customer deliveries are maintained with fire
by a failure could result in and flood risk in mind.
in the supply loss of revenue
chain. and profit. Critical production processes
are replicated at different
locations where practical.
The Group is highly vertically
integrated, providing
increased control over
many aspects of the supply
chain.
Ability to flex manufacturing
resource levels and shift
patterns.
Regular vendor reviews
are performed for critical
part suppliers.
Stock policies are reviewed
by the Board on a regular
basis.
Product quality is closely
monitored.
Regulatory The expansion Regulatory approval Specialist legal and
legislation of the Group's can be very expensive regulatory staff support
for healthcare business into and time-consuming. the healthcare business.
products the healthcare This area is also
markets involves very complex and Experience of healthcare
a significantly there is a risk regulatory matters at
increased requirement that the correct board level.
to obtain regulatory approvals are
approval prior not obtained. Healthcare operations
to the sale of in UK and France have
these products. ISO13485 certification
for their quality management
systems, with Ireland
and other subsidiary
healthcare operations
falling under the UK
quality management system.
Defined Investment returns Volatility in The investment strategy
benefit and actuarial investment returns is managed by the pension
pension valuations of and actuarial fund trustees who operate
schemes the defined benefit assumptions can in line with a statement
pension fund significantly of investment principles.
liabilities are affect the defined
subject to economic benefit pension A new recovery plan was
and social factors fund deficit, agreed in June 2016 for
which are outside impacting on future the 2015 actuarial valuation
of the control funding requirements. based on funding to
of the Group. self-sufficiency.
Exchange Fluctuating foreign With 95% of revenue The Group enters into
rate fluctuations exchange rates generated outside forward contracts in
may affect the of the UK, there order to hedge varying
results of the is an exposure proportions of forecast
Group. to major currency US Dollar, Euro and Japanese
fluctuations, Yen revenue and other
mainly in respect currencies from time
of the US Dollar, to time.
Euro and Japanese
Yen. Such fluctuations The Group uses currency
could adversely borrowings to hedge the
impact both the main foreign currency
Group's income denominated assets held
statement and in the Group's balance
balance sheet. sheet.
Monthly board review
of currency rates and
hedging position.
Financial calendar
Record date for 2017 interim dividend 10th March 2017 2017 interim dividend payment 7th April 2017 Announcement of 2017 full year results 26th July 2017 Mailing of 2017 Annual report Late August 2017 Annual general meeting 20th October 2017 2017 final dividend payment 23rd October 2017
Registered office:
Renishaw plc
New Mills
Wotton-under-Edge
Gloucestershire
UK
GL12 8JR
Registered number: 1106260
Telephone. +44 1453 524524 Fax. +44 1453 524901 email. uk@renishaw.com Website. www.renishaw.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUCWGUPMGQA
(END) Dow Jones Newswires
January 26, 2017 02:00 ET (07:00 GMT)
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