Renishaw PLC (LON:RSW) has warned that its full-year results will miss the group’s previous guidance as a slow-down in demand in Asia flagged with its interims in January has continued.
In a brief trading update, the FTSE 250-listed precision engineer said it now expects its full-year revenue to be in the range of £595mln to £620mln, with adjusted pre-tax profit to be in a range of £117mln to £135mln, and statutory pre-tax profit expected to be in the range of £123mln to £141mln.
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In its half-year results announcement, released on 31 January 2019, Renishaw had said its expected revenue range for the full-year was £635mln to £665mln, with an expected adjusted pre-tax profit range of £140mln to £160mln, and statutory pre-tax profit expected to be in the range of £146mln to £166mln.
The company said then that it had experienced a slow-down in demand in Asia for its encoder products and from large end-user manufacturers of consumer electronic products.
It added that, based on recent order trends and customer feedback, the group now expect these conditions to continue through the remainder of the financial year.
Renishaw, however, concluded: “Notwithstanding current economic uncertainties, the Board remains confident in the future prospects of the Group.”
The group said it will release a trading statement for the nine months to 31 March 2019 will be released on 14 May.
Shares slump
In early morning trading, Renishaw shares dropped 12.4% lower to 3,680p.
Russ Mould, investment director at AJ Bell said: “Today’s warning will raise fears over the prospects of the wider engineering sector given Renishaw is probably better positioned than most of its peer group, with a level of expertise which sets up barriers to any potential competitive threats.”
He added: “After a tricky 2018, shareholders will be hoping the company can eventually weather the current economic uncertainty and return to a growth path.
“The market reaction this morning suggests that a degree of patience remains, with the sell-off fairly measured when you consider the typical response to a growth company which reveals disappointing performance.”
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