Renishaw plc

Reported revenue increased 7.1% in H1, or 11.5% at constant currency. Operating profit rose 11.4% to GBP 57.5 million, profit before tax rose 11.5% to GBP 64.1 million, and operating margin improved by 0.6 percentage points. Gross engineering costs fell 8.5%, reflecting cost reduction actions. By region, the Americas grew 15% reported and more than 20% constant currency, APAC grew more than 10% reported and more than 15% constant currency, and EMEA turnover fell around 5%. Free cash conversion was just below target at 68%, CapEx was GBP 17 million in H1 and is expected to be about GBP 40 million for the full year, and cash balances ended just over GBP 240 million. The dividend was unchanged at 16.8p. Management said it expects strong revenue and profit growth for the year ahead, with currency still a headwind but offset by cost savings and revenue flow-through.

William Lee emphasized that the quarter showed a real pickup in Q2, especially in businesses tied to semiconductor/electronics manufacturing equipment and defense. He framed the company’s strategy around long-term growth through product innovation, focusing on adjacent new markets, higher technology value, and emerging businesses that can scale over time. His tone was optimistic but measured, repeatedly noting uncertainty in end markets while stressing that the innovation pipeline and emerging product traction are increasingly encouraging.

Marc Saunders highlighted record first-half revenue growth, improved operating profit, and a margin step-up driven by cost actions and operating leverage. He said the GBP 20 million company-wide cost reduction program and the shutdown of the loss-making drug delivery business are delivering, with GBP 9 million of savings coming through in H1 and GBP 23 million of annualized savings expected going forward. He also pointed to currency as a significant headwind, with roughly GBP 8 million less contract income and GBP 5.2 million of FX movement translating to a 3.6-point margin impact, while tariffs hurt revenue but not operating profit. Cash ended just over GBP 240 million, working capital increased as production ramped, and CapEx is running lower than in prior years.

Analysts focused on China entry-level products, the pace and size of the additive manufacturing opportunity, defense exposure, and whether FX might be addressed through manufacturing footprint changes rather than hedging. Management said China testing is limited but they are developing lower-cost, entry-level designs; on additive, both existing and new customers matter, and defense is helping accelerate demand. They also said defense is still a relatively small share, roughly 5% historically but rising, and that a humanoid-robot market was not seen as significant for Renishaw. On the ERP rollout, management said the UK implementation was difficult but the worst is likely past, with Germany next.