Interim profits at scientific measurement and opto-electronic specialist Renishaw Plc have suffered from falling demand in many of the group’s OEM markets. Severe recession in the machine tool sector has led to sales falling by 40% in some cases. But the Wooton-under-Edge, Gloucestershire-based company refuses ‘to compromise its future’ by cutting engineering or research and development expenditure. It has also increased marketing activities into the growing Far Eastern markets of China, Singapore and Taiwan, and has set up a new subsidiary in Hong Kong. Pre-tax profits fell 26.6% to UKP3.1m, although turnover rose 3.3% to UKP22m despite volume sales being down. The company sells some 90% of its products overseas, so revenues in sterling terms grew due to the weakness of the pound. The board has recommended that the interim dividend be maintained at 2.5 pence per share. Renishaw also experienced increased pressure on margins because it has not cut its prices, but has had to absorb the costs of inflation, for example in pay rises, much of which is paid out in foreign currency. The group is focussing on cutting costs across its business, and has introduced new manufacturing technology to increase capacity and so reduce the need for subcontracters. Demand in Japan, France and Germany fell as their economies moved into recession, but sales to the UK and the key US market improved. Sales of co-ordinate measuring machines and laser calibration products increased, and demand for the group’s new products, the Cyclone scanning machine and the Raman microscope, which began shipping at the end of June, were promising.
