Renishaw’s FY2025: record sales, steady margins, clearer path to 20%
Renishaw has delivered record revenue and higher adjusted profits despite a tough backdrop for industrials. The numbers are solid, cash generation is stronger, and there is a credible plan to lift margins through FY2026. Below I unpack the print, highlight what really moved the dial, and flag what to watch next.
Headline results and why they matter
| Metric | FY2025 | FY2024 | Change |
|---|---|---|---|
| Revenue | £713.0m | £691.3m | +3.1% (constant currency +3.7%) |
| Adjusted operating profit | £112.3m | £108.7m | +3.3% |
| Adjusted operating margin | 15.7% | 15.7% | Flat |
| Adjusted profit before tax | £127.2m | £122.6m | +3.8% |
| Statutory profit before tax | £118.0m | £122.6m | -3.7% |
| Adjusted EPS | 137.8p | 133.2p | +3.5% |
| Statutory EPS | 115.2p | 133.2p | -13.5% |
| Cash and deposits | £273.6m | £217.8m | +£55.8m |
| Total dividend | 78.1p | 76.2p | +2.5% |
Quick jargon check: “Adjusted” strips out one-offs to show underlying trading; “statutory” is the IFRS number. Constant currency removes exchange rate effects; useful in a year when Sterling strengthened.
What drove the year: semis strength and product mix
Revenue hit a new high at £713.0m, up 3.1% reported and 3.7% at constant currency. The standout was Position Measurement in APAC, where semiconductor equipment demand picked up. APAC grew 7.2% at constant currency (including good growth in China), Americas rose 2.2%, and EMEA was flat.
- Manufacturing technologies: £671.5m, up 3.6%. Growth in position encoders and 5‑axis CMM systems offset softer demand in additive manufacturing (AM).
- Analytical instruments and medical devices: £41.5m, down 3.8%. Higher neurological product sales couldn’t fully counter lower spectroscopy.
On pricing and costs, Renishaw managed to keep adjusted operating margin flat at 15.7%. Behind the scenes, gross margin excluding engineering ticked up to 61.7% (from 61.0%), helped by automation and logistics upgrades. Engineering spend rose 8.3% to £115.7m as the company leaned into innovation.
Innovation pipeline: faster, easier, more automated
This year’s launches were targeted at speed, ease of use and integration – exactly what factory customers want.
- Opti-Logic in twin probe systems makes machine tool setup faster via a smartphone app.
- Next‑gen laser encoders with improved metrology and plug‑and‑play installation, addressing semiconductor wafer inspection.
- AGILITY CMMs and Equator gauges gained traction amid shop-floor automation trends.
- RenAM 500D dual‑laser AM machine; when fitted with TEMPUS, it prints up to three times faster than conventional single laser systems.
- Equator‑X dual‑method gauging and MODUS IM Equator software aim to make systems easier to use and reduce support costs.
- ASTRiA inductive encoder targets harsh environments such as robotics and defence, developed under the new MVP approach to speed up time‑to‑market.
In short, the product roadmap is aligned to structural drivers like industrial automation, AI‑driven semis demand and process control on the shop floor.
Costs, cash and dividends: the housekeeping is working
Two items pulled statutory profit lower: £4.4m of closure costs (Edinburgh research facility and the drug delivery aspect of Neurological) and £4.9m of interest on historical and non‑recurring tax matters. The tax issues also pushed the effective tax rate up to 29.0% (from 21.0%). Adjusted measures strip these out.
Cash generation was a bright spot. Adjusted cash flow conversion from operating activities improved to 91% (from 70%), capex stepped down to £46.3m, and cash and deposits rose to £273.6m. Return on invested capital nudged up to 12.6% (from 12.3%). The dividend is up 2.5% to 78.1p, with a proposed final of 61.3p.
Margin ambition: how they get from 15.7% to 20%
Management reiterated the medium‑term targets: high single‑digit through‑cycle revenue growth and adjusted operating margins of 20%. The levers are clear:
- Annualised payroll reduction of £20m to take effect in H1 FY2026 via redundancy programmes (estimated cost £16.0m in FY2026).
- Exiting drug delivery in Neurological expected to benefit Group operating profit by around £3m per year; the CFO says combined closures should lift operating profit by around £4m annually.
- More manufacturing automation, tighter R&D prioritisation, and new software (Microsoft Dynamics 365) and AI tools to reduce support and admin overhead.
- Targeted price increases to offset cost inflation, while maintaining competitiveness against lower‑cost rivals.
The plan is sensible: bank cost savings, scale newer systems like AGILITY and AM machines within the existing footprint, and make products simpler to install and support.
Segment and regional colour worth noting
- Additive manufacturing was softer this year, but Renishaw enters FY2026 with a “good order book” in the Americas and EMEA. That is one to watch for a rebound.
- China delivered “good growth” despite rising low‑cost competition. Renishaw’s approach is to address new segments with the right spec/price, while defending value with IP and long‑term supply agreements.
- The USA remains key – 20% of revenue – with tariffs largely mitigated by surcharges.
Positives and negatives, plainly
What I like
- Record revenue with improved gross margin (ex‑engineering) and higher adjusted PBT in a choppy year.
- Cash discipline: 91% cash conversion, lower capex, strong balance sheet (£273.6m cash and deposits).
- Clear, near‑term cost actions – £20m payroll run‑rate saving kicking in from H1 FY2026.
- Product cadence aimed squarely at automation and semis, with MVP speeding time‑to‑market.
What to keep an eye on
- Statutory EPS fell 13.5% to 115.2p due to closure and historical tax items; resolution of those tax matters is important.
- AM systems demand needs to re‑accelerate to support mix and operating leverage.
- Competitive pressure in APAC from lower‑cost players; Renishaw must keep proving its value proposition.
- Delivery of ERP transformation (Dynamics 365) without disruption – the prize is productivity, but execution risk is real.
Outlook and valuation thoughts
Management reports a steady start to FY2026 and expects “further steady revenue growth”. The big swing factor for margins is the £20m annualised payroll saving and ongoing productivity work, which should begin to show through from H1. If revenue momentum holds – helped by semis, shop‑floor automation and the AM order book – the 20% adjusted operating margin target looks progressively more achievable.
For income investors, a 2.5% dividend increase and a robust cash pile underline balance sheet strength. For growth‑minded investors, the innovation pipeline and regional diversification (China, USA, Germany, Japan remain large end‑markets) provide multiple shots on goal.
Key takeaways for retail investors
- Underlying performance improved: adjusted PBT up 3.8% to £127.2m; constant currency revenue up 3.7%.
- Balance sheet muscle: £273.6m in cash and deposits gives resilience and optionality.
- Margin pathway: tangible savings in FY2026, plus software and automation to further lower costs.
- Innovation matters: products aimed at speed, ease and automation should help defend pricing and win share.
- Watch the moving parts: AM recovery, China competition, ERP roll‑out, and the timing of tax issue resolution.
Net-net, this is a quietly confident set of numbers: not flashy, but disciplined and forward‑leaning. If Renishaw executes on costs while its newer systems and encoders continue to gain traction, FY2026 could be a year of margin progress on top of record sales.
