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Summary
- Renishaw’s revenue declined by 11 percent year on year to £510.2 million in FY2020 due to macroeconomic conditions and pandemic.
- The profit after tax stood at £0.3 million in FY2020.
- Morgan Advanced Materials reported revenue of £477.8 million, which declined by 9.1 percent year on year in H1 FY2020.
- The loss per share stood at 9.9 pence in H1 FY2020.
Renishaw PLC (LON:RSW) - Cancelled the final dividend for FY2020
Renishaw PLC is a UK based company that is engaged in the business of metrology and healthcare technology. The Company provides solutions, systems and metal 3D printing. Renishaw has offices in 36 countries and employs 4,500 people worldwide. It is included on the FTSE 250 index.
FY2020 results (ended 30 June 2020) as reported on 13 August 2020
(Source: Company website)
In FY20, the Company reported revenue of £510.2 million, which fell by 11 percent year on year from £574.0 million in FY19. The revenue was impacted by challenging macroeconomic conditions and pandemic. The gross profit was £238.6 million, which declined by 16 percent year on year from £284.1 million in FY19. The profit after tax fell from £92.2 million in FY19 to £0.3 million in FY20. The Company cancelled the interim dividend and decided not to pay a final dividend. As on 30 June 2020, Renishaw had net cash of £120.4 million. In FY20, it did a capital expenditure of £38.7 million of which £24.6 million was spent on property, and £14.0 million was spent on the plant and machinery. The Company spent £82.4 million on engineering that included the research and development cost. In FY20, the Renishaw Innovation Centre was completed at New Mills in the UK, which has an area of close to 94,000 sq feet. The Company purchased land in Pune, India for future expansion. The Company underwent restructuring, and the total cost related to reorganization was £23.8 million, which included redundancy costs, write-down of fixed assets and inventories.
Business activity and Regional Performance in FY2020
Metrology division generated revenue of £475.2 million, and Healthcare division reported revenue of £35.0 million in FY20. Metrology products are used in industrial automation and motion systems. Healthcare products are used in craniomaxillofacial surgery, dentistry, neurosurgery and biofluid analysis. The APAC region reported revenue of £227.7 million, EMEA region reported revenue of £167.3 million and Americas reported revenue of £115.2 million in FY20.
Share Price Performance Analysis
1-Year Chart as on September-2-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Renishaw PLC's shares were trading at GBX 4,966.00 and were up by close to 3.89 percent against the previous closing price (as on 2 September 2020, before the market close at 11:50 AM GMT+1). RSW's 52-week High and Low were GBX 5,345.50 and GBX 2,234.51, respectively. Renishaw had a market capitalization of around £3.48 billion.
Business Outlook
The Company expects the global macroeconomic conditions to remain challenging over the short-term and the business activity in the automotive and aerospace sector would remain subdued. It is confident about the financial position, and it would continue to invest in production and marketing across the world. Renishaw has an extensive range of products, and the market for Raman spectroscopy is growing in many sectors.
Morgan Advanced Materials PLC - Sold assets of Diamonex business in Allentown Pennsylvania
Sale of assets in Allentown, Pennsylvania
On 1 September 2020, the Company reported the sale of assets for Diamonex business in Allentown Pennsylvania, US to BEST Engineering Surface Technologies LLC. The facility was producing chemical mechanical planarization pad conditioners that had an application in the semi-conductor business, scratch and wear-resistant windows and a diamond-like carbon coating. The facility in Allentown generated revenue of £6.8 million in 2019.
H1 FY2020 results (ended 30 June 2020) as reported on 30 July 2020
(Source: Company website)
In H1 FY20, Morgan Advanced Materials generated revenue of £477.8 million, which declined by 9.1 percent year on year from £525.8 million in H1 FY19. Headline operating profit was £52.9 million that reflected the headline operating profit margin of 11.1 percent in H1 FY20. The operating loss was £19.7 million in H1 FY20 against operating profit of £63.3 million in H1 FY19. Loss per share from the continued operation was 9.9 pence. The cash generated from the continued operation was £59.0 million, and free cash flow before acquisition disposal and the dividend was £26.4 million in H1 FY20. Morgan Advanced Materials did not declare the interim dividend in H1 FY20. As on 30 June 2020, Morgan Advanced Materials had net debt of £211.8 million, and no debt is maturing before 2023. It had cash of £122.7 million and an undrawn credit facility of £116.6 million. During the reported period, the sales volume fell in all the regions. The sales in the chemical, healthcare and the defence segment grew, whereas the demand fell in the traditional end-market segments.
Performance by business division in H1 FY2020
Thermal Products division reported revenue of £195.7 million in H1 FY20, which was down from £232.5 million reported in H1 FY19. Thermal Ceramics added £175.3 million, and Molten Metal Systems added £20.4 million to Thermal Products division in H1 FY20. Carbon and Technical Ceramics division reported revenue of £282.1 million in H1 FY20, which fell from £293.3 million in H1 FY19. Technical Ceramics, Electrical Carbon and Seals & Bearings segments added revenue of £126.8 million, £77.7million, and £77.6 million, respectively to Carbon and Technical Ceramics division.
Share Price Performance Analysis
1-Year Chart as on September-2-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Morgan Advanced Materials PLC's shares were trading at GBX 225.00 and were up by close to 0.45 percent against the last closing price (as on 2 September 2020, before the market close at 11:50 AM GMT+1). MGAM's 52-week High and Low were GBX 339.40 and GBX 168.80, respectively. Morgan Advanced Materials had a market capitalization of around £639.23 million.
Business Outlook
Given the subdued demand, the Company is undergoing a restructuring programme that would result in cost savings of close to £20 million by 2022 against a cash cost of £30 million. The restructuring plan is focused on operational efficiency and capacity alignment across the business segments as the Company expects lower demand. The Company would shut down the underutilized sites.
