UK engineering firm Renishaw (RSW) cut its annual profit forecast after warning of potential disruption to its business from the latest Covid lockdowns in key market China.

Shares in the FTSE 250 company initially fell sharply before recovering as morning trading progressed, marking a 0.5% decline by 9.30am on Tuesday (10 May 2022) to £41.67. The stock had fallen around 15% this year.

The company now anticipates adjusted pre-tax profit of between £155 million and £170 million, down from the £157 million to £181 million range announced in February. It anticipates revenue to fall within the £655 million to £675 million range, narrowed from the £650 million to £690 million previously.

QUARTER OF SALES FROM CHINA

The company, which makes precision measurement equipment used to manufacture jet engines to smartphones, said the uncertainties in China makes trading there difficult to predict. The country made up around 25% of the company’s £565.6 million 2021 revenue.

Renishaw is in the process of exiting operations in Russia and booked a £2 million impairment on its assets in the country during the third quarter.

Adjusted pre-tax profit jumped 47% to £124 million in the nine months to 31 March on strong demand from industries investing in industrial automation, semiconductor and electronics equipment.

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Issue Date: 10 May 2022