Renishaw Share Discussion Threads

[masurenguy] 13/10/2011 10:17

RNS Number : 1203Q
Renishaw PLC
13 October 2011

Interim management statement

Trading activity

Revenue for the three months to 30th September 2011 was £70.5m, an increase of 15.0% over the £61.3m for the first quarter of the previous year but below planned-for revenue. The previous year has been restated for the inclusion of Measurement Devices Limited from July 2010, which was initially accounted for as an associate company. Geographically, Europe reported growth of 26% over the comparable period last year and the Americas a growth of 21%. The Far East, an area of significant growth last year, showed revenue for this quarter at a similar level to the corresponding quarter last year. By market sector, we have seen a slowdown in one of our product lines sold to the electronics industries.
Profit before tax for the first quarter amounted to £13.6m, compared with £15.1m last year.

The Group has increased its cost base compared with the comparable period last year, mainly by the addition of personnel to support its growing revenue and production demands, and investment in its research and development programmes. Headcount at the end of September 2011 was 2,745, an increase of 70 from the start of the financial year at 1st July 2011 and an increase of 538 over the 2,207 personnel at 30th September 2010.

Significant events and financial position

We are reviewing our healthcare business and have refocused part of the activities to a smaller number of projects, with some resources diverted to our metrology business. The purchase of the Miskin premises, close to Cardiff in South Wales, was completed on 30th September 2011 and the Group also acquired premises for its Canadian and Italian subsidiaries. The aggregate cost of these acquisitions was £9.0m.

The Group continues to have a strong balance sheet with net cash balances at 30th September 2011 of £29.3m (30th June 2011 £34.6m). I should like to thank our staff for their continuing efforts and support.

Outlook

It is still very early in the financial year and the Group traditionally has an order book of a little over one month's sales value. During the first quarter order intake has exceeded revenue and the Group has an order book of £31.9m at the end of September 2011. Due to current uncertainties surrounding the global economy, the Board is closely monitoring the Group's costs and future recruitment strategy. Despite near-term challenges caused by the economic environment, we remain focused on positioning the Group for further long-term growth.

[alter ego] 13/10/2011 10:11

you might have got the date wrong but the time was spot on

here it is
www.investegate.co.uk/Article.aspx?id=201110131105581203Q

[whitestone] 13/10/2011 09:41

ego,

Quite right last year released at 10:37am...



I seem to be getting a little careless in my old age...

[motchjv] 13/10/2011 09:13

10:15

Just spoke to a finance lady, board meeting at the moment, statement out within the hour.

[alter ego] 13/10/2011 08:12

whitestone, that was in 2009. The 2010 statement www.investegate.co.uk/Article.aspx?id=201010141037043872U
was issued at 10:37 so we may have a little less time to wait :-)

[broadwood] 13/10/2011 07:32

white - Thanks. No need to panic then.

Fingers crossed for a positive outlook - confounding the sceptics.

[whitestone] 13/10/2011 07:29

b/w..

Last year the IMS was released at 11.06am – I assume AGM started at 11:00am?

[broadwood] 13/10/2011 07:24

Best be patient then.

[alter ego] 13/10/2011 07:23

OK, never been clear to me what the difference is between a trading update, an IMS or an update issued to coincide with the AGM. However, it is the AGM today so I think that's a factor in the timing of release.

[broadwood] 13/10/2011 07:20

ae - Barclays has it down as an IMS as do the company themselves on their own website.

Puzzled.

[alter ego] 13/10/2011 07:15

The "IMS" is actually an AGM statement - not sure what time the AGM is but if it's 2pm, perhaps the RNs will not appear for a hour or two.

[broadwood] 13/10/2011 07:11

Rog - interesting. I noticed their buying of TTG the other day,which I've also got.

Where is the IMS today?

[rogerrail] 12/10/2011 10:51

Crystal Amber, the "activist investment fund" is building a sizeable holding in RSW as they have done recently in TTG (now 3.1% holding). Being an activist fund they tend to invest a high proportion in their top 5 shares and RSW have only recently crept into this category , I would expect more buying from them especially as OMEGA their largest holding is subject of a takeover and they are already flush with cash.

Crystal Amber Top five holdings Pence per share Percentage of investee equity held
Omega Insurance Holdings Ltd 9.9 3.2%
N Brown Group plc 9.5 0.8%
TT Electronics plc 8.3 2.1%
PayPoint plc 7.8 1.5%
Renishaw plc 6.2 0.5%
Total of five largest holdings 41.7
Other investments 38.5
Cash and accruals 21.2
Total NAV 101.4

[motchjv] 12/10/2011 10:16

Price rising nicely in anticipation of good news tomorrow. Should see +8% by the end if day.

[motchjv] 12/10/2011 09:43

I think we be in for a very pleasant surprise tomorrow, way oversold.

[broadwood] 12/10/2011 09:30

Yep.

Very disappointing performance in the last couple of months despite no adverse comments from anyone in the Company. Mainly Brokers downgrades who seem to expect big disappointments based on worldwide slowdown.

Don't believe it myself.

[pip_uk] 12/10/2011 09:19

Could be an uplifting day tomorrow with a positive management statement and the future order book looking rosy, plus increased divi`s to come in the future.
We wait in anticipation.

[whitestone] 09/10/2011 10:05

Cash conversion rates of 70% or so seem Ok to me. That these cash flows are then reinvested in the business and used to pay a reasonable dividend rather than allowed to simply build up in the business I see as a good thing. Year-end cash and cash equivalents levels have been maintained at satisfactory levels as far as I can see....

[whitestone] 08/10/2011 17:18

Sorry to confuse ...

AGM and Interim Management Statement due next Thursday 13th October 2011




Thursday 13th is the day .....

Westcountryboy will look at the cash flow as you suggest..

[westcountryboy] 08/10/2011 16:33

I looked hungrily at RSW again this week as I guess I have done every five years since c 1990 when Quentin Lumsden recommended it in the Independent (as I recall). People wax lyrical about its quality as a holding and I really wanted to like it. But I was reminded again why I don't: the very high capex. If you add very high capex to normally negative working capital you see that every year the cashflow is all eaten up before it gets to add to net cash. They throw off free cash but then are cavalier with the capex. I wonder if their R&D department sees itself as like a university lab and perhaps is not really ruthless with itself when it comes to measuring business efficiency?

Put another way, the capex does not justify itself in a rate of return. Net assets have only doubled in the last eleven years which is not that great a rate of growth, especially since I think 2011 will probably turn out to be an exceptional year. Between 2000 and 2010 net assets only grew from £97m to £158m.

Net cash has not grown at all over the last decade - in fact it has shrunk. I love net cash in a business but if it is not growing or being invested in a higher rate of return or being returned in dividends then that's not a good sign. In fact net cash in 2011 (£23m) was only just over half the pension liability (£37m).

Finally I think the 2011 eps figure may turn out to be a snare and a delusion. Orders were delayed from the terrible years 2009 and 2010. If you add together operating profit in the three years 2009-11 it only comes to £114m, whereas operating profit in 2006-8 was £123m.

That's my take on the figures, but the fact that I have been compiling them since 1995 suggests I may succumb to invest one of these days! I would be interested to hear more positive views.

[alter ego] 08/10/2011 10:41

Did you mean Tuesday? Thursday is 13th.

[whitestone] 08/10/2011 10:37

AGM and Interim Management Statement due next Thursday 11th October 2011

[alter ego] 06/10/2011 10:39

Have long admired RSW and took advantage of what I think will prove to be an excellent entry point today. P/e under 10 - madness. Cracking company with first rate products and good long term prospects.

[electronica] 04/10/2011 16:10

There is no way that, even in a recession, RSW should trade on a P/E of less than 15. The product pipeline & expanding sales network pretty much guarantee an average 20% eps growth even allowing for the possible arrival of a couple of v tough years.

With 95-100p eps looking good for the current year (to end June 12) then an share price of 1400-1500p would be "normal".

As a long term holder (with an entry price of just over 600p) I'm not going to be paniced into selling in todayt's mad market.