Engineering firm Renishaw (LSE: RSW) reported a 27% drop in pretax profit for the first half of its financial year as revenues fell nearly 5% and costs continued to climb.
The FTSE 250 company said profit crashed to £56.5 million in the six months to December 31, 2023, down from £77.8 million the year before. Revenue also moved lower, declining 4.9% to £330.5 million from £347.7 million a year earlier.
Renishaw said the revenue slump came as solid growth in its Industrial Metrology division was outweighed by continued weak demand for its position encoders used in semiconductor manufacturing equipment.
At the same time, the company saw its cost base expand, with the cost of sales rising 2.0% to £175.9 million, distribution costs increasing 3.1% to £68.9 million and administrative expenses jumping 9.0% to £38.5 million.
The downbeat first-half results come despite Renishaw leaving its interim dividend unchanged at 16.8 pence per share.
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Looking ahead, chief executive William Lee said the company expects its trading performance to improve in the second half of the financial year “as market conditions improve”. Renishaw is also continuing to invest in production facilities and new products to support what it calls its “through-cycle growth strategy”.
Shares in the engineering firm jumped nearly 18% on Tuesday on the back of its first-half update. Renishaw’s share price has now risen around 15% since the start of 2024.
