Renishaw, the precision engineering group, said its new financial year had begun strongly, powered by booming demand for semiconductor manufacturing equipment.
The company expects further gains in revenue, profit and operating margin in the year to June 2027, riding the wave of investment in chipmaking driven by artificial intelligence.
The upbeat outlook came as Renishaw reported record annual results for the year just ended.
Revenue rose 14% to £815.8 million, or 17% at constant currency, while adjusted pre-tax profit jumped 32% to £168 million.
The adjusted operating margin widened to 18.7%, from 15.7%, helped by around £20 million of savings from a cost-reduction programme.
Demand accelerated through the year, culminating in a record fourth quarter with sales of £244.2 million, 28% above a year earlier, and a growing order book.
The standout was Position Measurement, the division making encoders used across semiconductor production, where revenue climbed 26% and profit leapt 53%.
Specialised Technologies, which houses additive manufacturing, was the fastest-growing arm, up 43%, swinging into profit on strong demand from the aerospace and defence sector.
Industrial Metrology, the largest division, grew more modestly at 4% as sales of measurement sensors stayed flat.
By region, the Americas led the way with 35% growth at constant currency, followed by Asia Pacific at 17%, while Europe lagged at 3%.
Chief executive Will Lee said the performance reflected the strength of an innovation-led strategy and Renishaw's position in attractive markets with long-term growth potential.
He cautioned that some traditional markets remained flat and flagged rising competition, particularly in China, from rivals offering cheaper products.
Renishaw is expanding encoder production capacity to meet demand and expects a quick payback on the investment.
The group ended the year with cash and deposits of £291 million, though cash conversion slipped to 79%, from 91%, as it built inventory to support the order surge.
Shareholders were rewarded with a total dividend of 82p, up 5%, alongside a special dividend of 70p a share.
Renishaw also completed a reorganisation into three divisions during the year and appointed John Shipsey as chief financial officer.
