Renishaw has reported a 13% increase in revenue to £81.6 million for the six month period ended 31 December 2005, and operating profit up by 26% to £13.9 million
These are the first interim results produced by the company under the new International Financial Reporting Standards, and show particular growth in Asia, where revenue increased by 32%, and in North and South America, which saw 20% growth.
There was a 5% net reduction in Renishaw's continental European revenues compared to the same period last financial year, primarily due to the shipment of a large initial stocking order of a dental product launched in the first half of 2004/2005.
With the exception of digitising, including dental, there was good growth in all product lines, especially spectroscopy.
Revenue benefited by £2 million from currency exchange differences compared with the previous year's actual exchange rates.
Profit before tax rose to £15.3 million (2004: £12.4 million), resulting in earnings per share of 16.9p, an increase of 23%.
Net cash balances at 31 December 2005 were £25.7 million (2004: £23.2 million).
Renishaw's chairman and chief executive, David McMurtry, reported that during the period a representative office had been established in Turkey and the sales force has been substantially increased in India and asia, including Japan.
He reinforced that research and development remains key to group strategy: "As I stated at the annual general meeting in October, a number of new products have been introduced at recent exhibitions, in particular, at EMO held in Hannover in September.
"The Gyro range of heads, to complement Revo and Renscan5 introduced in April last year in our co-ordinate measuring machine (CMM) product line, were very well received and we anticipate that they will make a valuable contribution in our next financial year.
"Also introduced were the OMP400 high accuracy strain gauge probe and on-machine verification software launched by our machine tool product line".
Total research and development expenditure, including associated engineering costs, amounted to £13.8 million (2004: £12.1 million).
McMurtry also reported that Renishaw is currently establishing a software product development team at its Pune premises in India.
As previously announced, Renishaw has also acquired a 50% interest in PulseTeq, a small UK company, specialising in radio frequency coil electronics and other enhancements to magnetic resonance scanners for medical purposes.
Commented McMurtry: "This investment illustrates our intention to exploit opportunities in the medical field by applying our in-house metrology expertise to this important new area of activity.
"We have also acquired a 50% interest in Metrology Software Products, another small UK-based company, to strengthen the development programmes for our CMM and machine tool product lines.
"We are very pleased with the developments at these two associates since acquisition".
There has also been significant activity in Renishaw's manufacturing operations.
A new anodising plant has been successfully commissioned at its Stonehouse factory in Gloucestershire, UK, and the manufacturing plant and machinery are now being transferred to this new location from its main site at New Mills, Wotton-under-Edge, UK.
In India, a manufacturing facility is being established at the recently acquired premises in Pune to complement Renishaw's existing manufacturing facilities in the UK and Ireland and to facilitate the introduction of new technologies into the worldwide organisation.
Total capital expenditure in the UK and overseas during the six months was £7.2 million (2004: £10.4 million).
McMurtry also stated that the board is continuing its review of the company's pension arrangements, the results of which are expected to be known during the second half.
In conclusion, he said: "We confidently expect continuing progress in the group's business in the remainder of the financial year".
An interim dividend of 6.71p (2004: 6.10p per share) will be paid on 10 April 2006 to shareholders on the register on 10 March 2006.
