Oxford Instruments firing on all cylinders

published 12 June 2012

High-tech firm Oxford Instruments said back in April its full year results would be good, and so it has proved.

The provider of high technology tools and systems for research and industry delivered adjusted profit before tax of £42.0m in the year to March 31st, up 60% on the previous year's £26.2m and better than the £39.8m the market had been expecting.

Revenue rose 28.6% to £337.3m from £262.3m, topping expectations of £336.9m, as the group saw a record performance across all three of its business sectors. Organic revenue growth clocked in at 15.1% and was achieved across all territories.

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Divisional performanceRevenue in the Nanotechnology Tools division rose to £153.9m from £121.8m the year before, while operating profit improved to £17.3m from £14.6m.

The Industrial Products division upped revenue to £129.1m from £100.5m the preceding year, while operating profit more than doubled to £13.8m from £6.1m.

The group's Service arm also put in a good shift, lifting revenue to £56.3m from £42.5m the year before, while operating profit rose to £11.0m from £7.4m a year earlier.

Dash for growth on targetOrder intake across the group was £337.8m (2011: £273.5m) and the order book for future delivery now stands at £136.8m (2011: £115.3m).

Adjusted earnings per share were up 48.4% to 61.6p from 41.5p the year before, ahead of the market consensus forecast of 59.52p. That paved the way for an 11.6% hike in the final dividend to 7.23p, making the full year pay-out 10p, up from 9p the year before. Brokers following the stock had expected a full year divi of 9p.

"We are now two months into the second year of our 14 Cubed plan," said Jonathan Flint, Chief Executive of Oxford Instruments, referring to the group's stated objective of achieving compound growth of 14% and a return on sales of 14% by 2014.

"Trading to date has been in line with our expectations and our markets remain strong despite continued economic uncertainty, particularly in Europe," Flint added.

Recent product releases have been well received, with 44% of revenue coming from products launched or acquired in the last three years - up from 34% the year before - and the group has plenty more new products in the pipeline. It also remains on the look-out for suitable bolt-on acquisitions, with ample firepower to hand, as it has net cash of £35.1m, and access to up to £84.5m of credit facilities.