Oxford Instruments plc

On an organic constant-currency basis, full-year order intake finished up 8% and was up 14% in the second half. Revenue declined 3% for the year, driven by order-to-revenue timing, while group margin improved by 30 basis points on a constant-currency basis. Cash conversion was 89%, and free cash flow remained robust. In Imaging and Analysis, full-year order intake was up 1.9% and revenue was down 3%; in Advanced Technologies, order intake rose 28% and revenue was slightly down for the year due to Q4 timing. Looking ahead, management expects Imaging and Analysis to deliver low single-digit revenue growth in FY27 and Advanced Technologies to deliver high-teens revenue growth, with further margin progress despite a GBP 3.2 million FX headwind in FY27.

Richard Tyson framed FY26 as a year of meaningful strategic progress after a difficult start, saying the business is now “very different” from 2023 and is simpler, more commercially focused, and better positioned. He highlighted the shift toward high-volume manufacturing customers, stronger customer intimacy, better service revenue, and the benefits of restructuring and portfolio refocusing, including the NanoScience divestment. His tone was upbeat and confident, with repeated emphasis that the company is in “really good shape” for FY27 and beyond.

Paul Fry emphasized the financial turnaround in the second half: order intake recovered progressively, gross margin improved through Belfast restructuring and operational excellence, and constant-currency operating margin rose 30 basis points. He said cash conversion remained 89% and free cash flow was supported by lower cash tax from prior overpayments and Yatton sale proceeds; even without those items recurring, he expects free cash flow to improve as adjusting items fall and pension contributions have ceased. He also noted a FY27 FX headwind of around GBP 3.2 million, a tax rate stabilizing around 24.5%, an additional GBP 10 million of investment in growth opportunities, a 6.3% dividend increase, and completion of the GBP 100 million buyback program by year-end.

Analysts focused on Advanced Technologies visibility, lead times, and whether the big April order was a one-off. Management said the large orders reflect multiple customers ramping production, not a single isolated event, and that the business is working to add labor capacity and reduce lead times, with current order book and service revenue materially covering FY27. Questions also probed semiconductors in Imaging and Analysis, pricing power in AT, and the mix of datacom versus other compound-semi applications; management said semis are increasingly relevant in I&A through cross-sell and product/software integration, and in AT datacom is growing very quickly but does not dominate the order book, which remains diversified across GaN, augmented reality, quantum, and academia.