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Oxford Instruments FY profits fall amid tough trading

Oxford Instruments blames weaker Japan demand for "testing year"
Oxford Instruments FY profits fall amid tough trading
Oxford sees return to growth in 2015/16 as new products gain traction

High-tech group Oxford Instruments (LON:OXIG) reported a tough year and said a slow start to 2015/16 had offset faster cost cuts, hitting its shares.

The group, which provided x-ray technology for Nasa's Mars Curiosity rover, said it had faced weaker demand in Japan and difficult trading in its industrial analysis business.

It also said it had taken a hit from the sudden tightening of Western trade sanctions against Russia.

While orders rose 13% to £386.6mln and revenue lifted 7.1% to £385.5mln in the year to March 31, adjusted pre-tax profit fell to £35.6mln from £47.1mln a year ago.

It also said trading in the first two months of the new financial year had been slow, although it expected a return to growth later in the year as new products gain traction.

Chief executive Jonathan Flint said the group was confident that nanotechnology would drive long-term demand for its high-tech equipment.

"This, together with the benefit of announced cost savings, mean our expectations for the current year are unchanged," he said.

Despite that, shares fell 34p or more than 3% to 1032p in early trading in London.

Analysts at Liberum Capital said the stock looked fully valued. "While Oxford Instruments remains an exciting play on scientific markets and self-help should drive the margin, residual lumpiness and tough trading conditions raise questions over the sector premium," they said in a note.

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