Interim Management Statement

RNS Number : 1968N

Oxford Instruments PLC

12 February 2009

 



Oxford Instruments plc

Interim Management Statement

Oxford Instruments plc, a leading provider of high technology tools and systems for industry and research, issues today an Interim Management Statement which covers the period from 1 October 2008 to 12 February 2009 as required by the UK Listing Authority's Disclosure and Transparency Rules.

Performance in the period was in line with the Board's expectations and above the same period in the prior year with revenues being aided by favourable currency movements. Our superconducting wire business delivered a strong trading performance. Also, those businesses driven by emerging technologies, such as next generation photovoltaic devices, have showed continued growth. This has compensated for a slowdown in order intake in our businesses serving industrial markets.

The current economic environment creates more uncertainty as our supply chain partners come under pressure within their own businesses and customers re-examine the timing of their purchases. To respond to the uncertainty created by the global downturn, we have taken steps to reduce our cost base:  

• In our Half Year Report we announced the loss of 50 roles from our Oxfordshire site.
  
  
• Before the year end we plan to close our site in Chicago and move its operations to our other sites in the US and to our facility in China. 
  
  
• We will also close our facility in Hobro, Denmark and move those operations to our site in High Wycombe, UK. 
  
  
• The Group has decided to curtail further research and development in the area of Hyperpolarisation within the Group’s BioTools division, due to the significant reduction in Research and Development spend within the pharmaceutical industry.  

The net effect of the above restructuring and other streamlining across the Group will be a reduction in headcount of 230 which is 15% of the Group's workforce. The cash outflow associated with the above restructuring to date has been £1.7 million with an additional £1.8 million to be spent this year and £1.9 million falling into the next financial year. Cash savings from these changes are anticipated to be in the region of £11.4 million for the financial year to March 2010. The one off charge to the Income Statement of these redundancies and associated write downs is expected to be of the order of £7.8 million in this financial year.  

Net debt at the end of January stood at £36.4 million. This is supported by a 5 year revolving credit facility of £50 million which runs until July 2012 and additional overdraft facilities totalling £15 million. As the Group has historically held its debt in Euro and US dollar, the decline in Sterling in the period covered by this IMS has had the effect of increasing our net debt expressed in Sterling by £9.4 million. In January the Group converted its debt into Sterling to prevent further erosion of facility headroom due to currency movements.  

In November, the Group announced the retirement from the Board of Steven Parker and the appointment of Jock Lennox as an independent non-executive director. The appointment will take effect from 1 April 2009, with a view to Jock Lennox succeeding Peter Morgan as Chairman of the Audit Committee.

We are acting decisively in response to the downturn in industrial markets and in anticipation of difficult conditions ahead. Our reduced cost base and more efficient operating structure should mitigate the impact on profits if we suffer a decline in revenues. This, together with the expected positive effects of the current level of Sterling, means that the business is well positioned during the downturn and will benefit swiftly from a future strengthening of demand.

  - Ends -

Enquiries:

Oxford Instruments plc                                                  Tel: [phone]

Jonathan Flint, Chief Executive

Kevin Boyd, Group Finance Director

Hogarth Partnership Limited                                          Tel: [phone]

Rachel Hirst / Andrew Jaques / Ian Payne

This Interim Management Statement contains certain forward-looking statements 

which have been made by the Directors in good faith using information available 

up until the date they approved the Statement. Forward-looking statements 

should be regarded with caution as by their nature such statements involve risk 

and uncertainties relating to events and circumstances that may occur in the 

future. Actual results may differ from those expressed in such statements, 

depending on the outcome of these uncertain future events.

 

END

 

 

IMSGGGDDGXBGGCD