Renishaw H1 FY2026: record Q2, stronger order book, upbeat guidance
Renishaw has delivered a tidy first half, capped by a record Q2, and says momentum has continued into early Q3. Revenue rose 7.1% to £365.6 million (11.5% at constant currency – calculated using last year’s exchange rates), with growth across all three segments and a bigger order book. Adjusted profitability improved despite chunky currency and tariff headwinds, while statutory numbers were dragged by one-off restructuring and other costs.
Management guides to full-year revenue of £740 million to £780 million and adjusted profit before tax of £132 million to £157 million, noting H2 is typically stronger.
Key numbers investors should know
| Metric | H1 FY2026 | H1 FY2025 | YoY |
|---|---|---|---|
| Revenue | £365.6m | £341.4m | +7.1% (+11.5% constant currency) |
| Adjusted operating profit (margin) | £57.5m (15.7%) | £51.6m (15.1%) | +11.4% (+0.6%pt) |
| Adjusted profit before tax | £64.1m | £57.5m | +11.5% |
| Statutory profit before tax | £46.0m | £57.5m | (20.0%) |
| Adjusted EPS | 68.8p | 63.2p | +8.9% |
| Interim dividend | 16.8p | 16.8p | Unchanged |
| Cash and deposits | £240.9m | £273.6m (30 Jun 2025) | Lower, reflecting dividend and working capital |
| Return on invested capital | 13.2% | 12.6% | +0.6%pt |
| Adjusted cash flow conversion | 68% | 100% | (32%pt) |
Adjusted results exclude one-off items such as restructuring costs and a loss of office payment (see note 12 in the RNS). That gives a cleaner view of underlying trading.
What powered growth: segments and regions
Segment performance: metrology steady, encoders building, AM inflecting
- Industrial Metrology: Revenue £212.1m (+4.3% reported, +8.8% constant currency). Strong demand for 5-axis AGILITY CMMs in the Americas and Equator shop-floor gauging in APAC. Machine calibration saw good growth; sensors were flat with EMEA softness. Adjusted operating profit £32.2m (+3.9%), margin 15.2% (down 0.1%pt).
- Position Measurement: Revenue £110.5m (+7.4% reported, +11.9% constant currency). Open optical and magnetic encoders grew well; laser encoders were down against a tough comparator. Enclosed FORTiS optical encoders and new ASTRiA inductive encoders gained traction, including defence applications. Adjusted operating profit £25.9m (down 9.1%), margin 23.4% (down 4.3%pt) on mix and FX – still above FY2025’s 22.5%.
- Specialised Technologies: Revenue £43.0m (+22.2% reported, +25.9% constant currency). Additive manufacturing (AM) was the star, with stronger sales and order intake, especially in defence across EMEA and the Americas. Adjusted operating loss narrowed to £0.6m (from a £7.9m loss), a 21.0%pt margin improvement, mainly from operating leverage and restructuring benefits.
Regional dynamics: Americas and APAC up, EMEA lagged but recovering
- APAC: £178.0m (+10.3% reported, +16.9% constant currency), driven by encoders for semiconductor and electronics equipment, plus Equator gauging into consumer electronics.
- Americas: £90.6m (+16.6% reported, +22.9% constant currency), helped by high-value CMM and AM systems, and c. £5m of surcharges/price rises to offset new US tariffs.
- EMEA: £97.0m (down 5.2%), impacted by softer general industrial demand and a September ERP transition that disrupted deliveries. Order intake improved notably in Q2.
Margins, costs and cash: what’s under the bonnet
Adjusted operating margin ticked up to 15.7% despite a hefty 3.8%pt headwind from currency and tariffs. The margin bridge is telling:
- Currency and tariffs: a 3.6%pt drag from lower forward contract income (£8.0m year-on-year) and adverse FX, plus a small margin reduction from US tariffs (fully offset in profit terms by pricing).
- Self-help: 4.4%pt of organic margin uplift from fixed cost reduction, productivity and operating leverage as volumes rose.
Restructuring is flowing through. Headcount fell from 5,347 to 4,975 by 31 December 2025, delivering c. £9m of H1 savings, with c. £23m p.a. annualised savings expected, partially offset by c. £5m higher pay in H2.
Gross margins excluding engineering costs were 58.8% (61.5% prior year), reflecting FX, tariff effects and mix. Adjusted cash flow conversion from operating activities was 68% (100% prior year) – a deliberate working capital build to support record Q2 sales and a growing order book. Cash and deposits were a robust £240.9m after the FY2025 final dividend (£44.6m) and restructuring outflows.
Statutory PBT fell 20.0% to £46.0m due to £18.0m of adjusting items (cost reduction, closure of drug delivery, loss of office, and interest on historical tax matters). Adjusted PBT rose 11.5% to £64.1m. Adjusted EPS increased 8.9% to 68.8p; statutory EPS was 49.9p.
Product momentum: encoders, gauging and AM doing the heavy lifting
The growth engines are clear. Established open optical and magnetic encoders are building momentum with semicon and electronics equipment makers. Emerging lines – FORTiS enclosed optical encoders and ASTRiA inductive encoders – are opening adjacent markets, including defence.
On the metrology side, Equator shop-floor gauging is seeing strong APAC demand, while 5-axis AGILITY CMMs are gaining in the Americas. In AM, RenAM 500 series systems saw higher sales and even stronger orders, aided by software to reduce supports and a long-life filter to maximise uptime. In spectroscopy, the new Strada intelligent Raman microscope will ship to early adopters in H2 and is positioned as the future mainstay of the line.
FY2026 outlook: guidance ranges and what to watch
- Revenue: £740m to £780m
- Adjusted profit before tax: £132m to £157m
Management says H2 is typically stronger and that positive momentum has continued into early Q3. The backdrop remains mixed – strength in defence, semiconductors and selected product lines versus more subdued general industrial demand – but the enlarged order book and Q2 record should support a solid second half.
Dividend, balance sheet and ownership
The interim dividend is maintained at 16.8p per share, payable on 7 April 2026 to holders on 6 March 2026. Capital expenditure was £17.3m in H1, with c. £40m expected for the year. ROIC improved to 13.2%, edging towards the 15% target.
Founder families have consolidated their holdings into Deltam Holdings Limited, now owning 50.25% of the company. The RNS states this facilitates generational transfer and reaffirms a long-term shareholder commitment. Governance changes are also in train, with a new CFO and an independent Chair to be appointed.
My take: positives, pressure points and the investment angle
- Positives: record Q2, double-digit constant-currency growth, stronger order book, and clear momentum in AM and encoder franchises. Self-help is working, with 4.4%pt organic margin uplift, and ROIC is improving.
- Pressure points: FX and tariff headwinds clipped margins; EMEA demand is softer; Position Measurement margins eased on mix; and cash conversion dipped as Renishaw gears up for H2. There is an ongoing provision for historical tax matters, with additional interest recognised in H1.
- Why it matters: Renishaw is exposed to structural growth drivers – precision manufacturing, automation, semiconductors, and electrification. H2 bias and guidance ranges suggest confidence without overpromising. If AM and enclosed/inductive encoders keep scaling, mix should turn more favourable.
Net-net, this is a quality print: broad-based growth, accelerating Q2, and an order book to support a stronger second half. Execution on cost, product launches and supply-chain pricing looks sound. Keep an eye on FX, EMEA demand and cash conversion, but the FY2026 set-up looks constructive.
