Renishaw plc

FY2026 revenue increased 14% to GBP 816 million, or 17% at constant FX. Adjusted operating profit grew 36% to GBP 153 million, adjusted operating margin improved to 18.7% from 15.7% in FY2025, and EPS grew 30%. Gross margin dipped slightly due mainly to product mix, but operating leverage from higher volume lifted profitability, and second-half operating margin was over 21%. Adjusted operating cash flow was GBP 121 million, cash conversion was 79% versus 91% a year ago, and year-end cash and deposit balances were GBP 291 million. The board proposed a 5% increase in the regular dividend plus a special dividend of GBP 0.70 per share, which will reduce H1 FY2027 cash flow by GBP 51 million. Management said FY2027 CapEx will roughly double on production assets, mainly to expand encoder manufacturing capacity, and the capacity is expected to come on stream by the end of the fiscal year. No formal revenue or profit guidance was given, but management said they expect further strong progress on revenue, profit, and operating margin, with continued growth in the order book and investment in productivity.

William Lee framed the year as one of “excellent” progress, led by AI-driven semiconductor investment, but he said he was most pleased by the development of the emerging-business portfolio. He emphasized an innovation-led strategy, targeted capacity investment, and disciplined execution across attractive end markets, while repeatedly noting the company is mindful of cyclicality and wants to support customers through the upcycle without losing sight of long-term productivity. His tone was upbeat and strategic, with confidence in new products like ASTRiA, MODUS IM, and newer sensor and laser encoder launches.

John Shipsey highlighted the financial step-up: revenue up 14% to GBP 816 million, adjusted operating profit up 36% to GBP 153 million, margin at 18.7%, and EPS up 30%. He noted cash conversion at 79%, adjusted operating cash flow of GBP 121 million, and year-end net cash strengthening, with cash and deposits at GBP 291 million even after dividends and other movements. He said the special dividend of GBP 0.70 per share will reduce H1 FY2027 cash flow by GBP 51 million, and that FY2027 CapEx will double on production assets mainly for encoders. He also said the ERP rollout is paused through the end of the calendar year for a diagnostic review after a painful UK go-live.

Analysts focused on China, the competitive position in encoders, order book visibility, ASTRiA’s market opportunity, software growth, and the sustainability of margins. Management said China remains a major opportunity and risk, with domestic competitors increasingly present, and noted plans to explore “China for China” products and domestic supply chains for lower-end sensors. On orders, they said the order book is growing, especially in Position Measurement, but is not disclosed because it is not committed demand; on ASTRiA, they said it could become a significant revenue generator in a few years but refused to size the market. They also said Position Measurement growth was entirely volume-driven, not pricing-driven, and that current strong margins were not boosted by unusual second-half items.