Final Results

Renishaw PLC
22 July 2004

                                                                  22nd July 2004
                                       
Renishaw plc and subsidiary undertakings
Preliminary announcement of results for the year ended 30th June 2004


PROFIT AND LOSS ACCOUNT
                                                                              
                                                           2004         2003  
                                                                              
                                                          £'000        £'000  
                                                                              
Turnover                                                127,701      110,640  
                                                                              
Cost of sales                                            69,188       59,941  
                                                                              
Gross profit                                             58,513       50,699  
                                                                              
Distribution costs                                       25,201       22,880  
                                                                              
Administration costs *                                   15,259       12,175  
                                                                              
Operating profit                                         18,053       15,644  
                                                                              
Interest receivable less payable                          2,043        1,925  
                                                                              
Other finance income                                         50          230  
                                                                              
Profit on ordinary activities before taxation            20,146       17,799  
                                                                              
Tax on profit on ordinary activities                      4,023        3,454  
                                                                              
Profit for the financial year                            16,123       14,345  
                                                                              
Dividends                                                13,100       12,156  
                                                                              
Retained profit for the financial year                    3,023        2,189  


                           *************************                            

                                                                              
Earnings per share (basic and diluted)                     22.1p        19.7p 
                                                                              
Dividend per share                                         18.0p        16.7p 


 

* Administration costs include one-off currency profits arising on forward
foreign exchange contracts totalling £0.4m this year (2003 £3.0m).


 
                                                                                 
BALANCE SHEET                                             2004             2003  
                                                                                 
                                                         £'000            £'000  
                                                                                 
Fixed assets                                            58,496           50,877  
                                                                                 
Current assets:                                                                  
                                                                                 
    Stock                                               22,288           20,171  
    Debtors                                             32,820           29,600  
    Cash (net)                                          32,833           37,235  
    Creditors due within one year                      (26,031)         (20,534) 
                                                                                 
Net current assets                                      61,910           66,472  
                                                                                 
Provisions for liabilities and charges                  (4,306)          (3,503) 
                                                                                 
Pension liability                                       (8,390)          (8,620) 
                                                                                 
Net assets, equal to shareholders' funds               107,710          105,226  

                           *************************                            
                                                                                 
CASH FLOW STATEMENT                                       2004             2003
                                                                                 
                                                         £'000            £'000  
                                                                                 
Net cash inflow from operating activities               22,159           20,481  
                                                                                 
Interest received (net)                                  2,026            1,906  
                                                                                 
Tax paid                                                (3,096)          (1,380) 
                                                                                 
Capital expenditure:                                                             
                                                                                 
    Purchase of tangible fixed assets                  (14,899)          (8,184) 
    Proceeds from sale of tangible fixed assets            163              158  
                                                                                 
                                                       (14,736)          (8,026) 
                                                                                 
Equity dividends paid                                  (12,351)         (11,763) 
                                                                                 
(Decrease)/increase in cash before currency             (5,998)           1,218  
differences                                                                      
                                                                                 
Analysis of changes in cash at bank during the                                   
year:                                                                            
                                                                                 
(Decrease)/increase in cash before currency             (5,998)           1,218  
differences                                                                      
                                                                                 
Currency differences                                     1,596              361  
                                                                                 
                                                        (4,402)           1,579  
                                                                                 
Net funds at 1st July                                   37,235           35,656  
                                                                                 
Net funds at 30th June                                  32,833           37,235  


 

TURNOVER ANALYSIS
                                                                              
                                                  2004       2003       2004
                                                                    sales at
                                                 £'000      £'000       2003
                                                                    exchange
                                                                       rates
                                                                       £'000  
                                                                              
Continental Europe                              48,983     41,619     47,973  
                                                                              
Far East, including Japan & Australia           34,099     26,407     35,812  
                                                                              
North & South America                           33,305     31,163     36,384  
                                                                              
Other overseas regions                           2,494      1,780      2,507  
                                                                              
UK and Ireland                                   8,820      9,671      8,820  
                                                                              
Total Group turnover                           127,701    110,640    131,496  


                           *************************                            

NOTES:
 1. The financial information set out above does not constitute the
    Company's statutory financial statements for the years ended 30th June
    2004 or 30th June 2003 but is derived from those financial statements.
    Statutory financial statements for 2003 have been delivered to the
    Registrar of companies, whereas those for 2004 will be delivered
    following the Company's annual general meeting. The auditors have
    reported on those financial statements; their reports were unqualified
    and did not contain a statement under section 237(2) or (3) of the
    Companies Act 1985.

 2. The proposed final dividend of 12.39 net per share for the year ended 30th
    June 2004 will be paid on 18th October 2004 to shareholders on the register
    on 17th September 2004.


                            **********************

The Chairman's statement to be included in the 2004 Annual report and financial
statements:

I have pleasure in announcing a successful set of results for the 12 months
ended 30th June 2004.

Turnover rose by 15% to £127.7m (2003 £110.6m), an increase of 19% if measured
at constant exchange rates. This represents the highest turnover in the
Company's history. Sales rose in all markets with the exception of the UK, most
notably in the Far East (including Japan), but also in the emerging markets of
Eastern Europe and Russia. This reflected growth in all our product lines, but
with above-average growth in Digitising (including dental), Encoders,
Calibration and Machine Tool products.

Operating profit increased by 15% to £18.1m (2003 £15.6m) despite a reduction in
one-off currency profits on forward foreign exchange contracts of £0.4m this
year and £3.0m in 2003. Profit before tax rose by 13% to £20.1m (2003 £17.8m).
Profit after tax amounted to £16.1m compared with £14.3m in the previous year,
giving rise to earnings per share growth of 12% to 22.1p (2003 19.7p).

Manufacturing
There has been significant investment at the New Mills and Woodchester sites in
additional capacity and capability, including CNC lathes, additional machines
for incorporation into the Company's automated milling, turning and inspection
system and surface-mount electronic assembly inspection and test equipment.
Phase II development at Woodchester is now complete; a further 30,000 sq feet of
manufacturing space will become available at this site later in the year.

Marketing
Our activity in marketing throughout the world has continued at a high level.
All our recently established subsidiaries in Czech Republic, Poland, Russia,
Austria, Sweden, Canada, Israel and South Korea have grown well in their markets
and are already making a significant contribution to the Group's overall results
and distribution infrastructure. The Group is planning to open additional
offices in both China and Russia.

Research and development
The Group's ongoing commitment to research and development, which has continued
through the recent economic downturn, has resulted in the successful launch of a
number of new products during the year, including the UCC2 and SPA2 CMM
controller system, the NC4 non-contact laser system for high speed toolsetting
and tool breakage detection, RMP60/RMI radio system, the inVia reflex Raman
microscope interfaced with scanning electron microscopes for precision single
point sample analysis, a range of rotary magnetic encoder products and
additional software products.

Expenditure on our research and development increased to £22.0m (2003 £20.2m)
including related engineering costs.

Capital expenditure
Capital expenditure, including that on new manufacturing equipment, amounted to
£15.6m (2003 £8.2m), of which £6.5m (2003 £2.7m) was spent on freehold property,
with the new offices in Japan costing £5.1m. Further investment was made in IT
hardware and software throughout the Group, but particularly for design systems,
marketing and management systems and group infrastructure.

Liquidity
The Group continues to maintain a high level of liquidity, with net bank
balances at the year end of £32.8m (2003 £37.2m).

Awards
I am delighted to report that the Group has again won a number of awards. The
Queen's Award for Enterprise was won in respect of the OMP40 compact scanning
probe. This, I am pleased to say, was the 10th Queen's Award in the Company's
history. The Metalworking and Production Award at the Mach 2004 Exhibition was
awarded in respect of the SP25 scanning probe for 'The Best Quality Control
Product or System'. The Worshipful Company of Scientific Instrument Makers
awarded their 2003 Annual Achievement Award in respect of the RESR rotary
encoder.

In addition, the Company won the 2003 National Training Award and was the
regional winner of the National Languages for Export Award.

Personnel
With recruitment primarily targeted at local production and overseas sales
personnel, particularly in the Far East and our recently established subsidiary
companies, numbers employed in the Group worldwide have grown to 1,754 (2003
1,639). To all of them I express my gratitude for their commitment and drive in
maintaining Renishaw as a world leader in its field.

I should also like to congratulate Joe McGeehan on his recent award of a CBE.

Prospects and dividend
Activity picked up considerably in the second half of the year and forward order
books have continued to increase. Although exchange rates continue to limit the
Group's ultimate profitability, we are optimistic for the current year and
confident of the Group's longer term prospects.

Your Board proposes a final dividend of 12.39p per share, giving a total for the
year of 18.0p (2003 16.7p).

 

Sir David R McMurtry, CBE, RDI, CEng, FIMechE, FREng
Chairman & Chief Executive
21st July 2004

Enquiries:            B R Taylor                 01453 524445
                      A C G Roberts              01453 524445

Registered office: New Mills, Wotton-under-Edge, Gloucestershire. GL12 8JR

Telephone:  [phone]



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