There's no other way to look at them, half-year figures from Renishaw (RSW) today are exceptional, fact! Revenues rose 36% and profits more than doubled. So why aren't the shares racing away, you might wonder, virtually unmoved at £23.44. Well they have, just not today, up 50% since mid-October driven a swathe of upbeat trading updates. Today the market is rightly pausing for thought.

The precision engineering and metrology specialist is seeing exceptional demand, but it is encouragingly spread over several products. New launches later in the year support the theory that the good times will keep on rolling. Large and lumpy orders remain the biggest imponderable for Renishaw and its investors.


Analysts at Investec are already pencilling in 7% upgrades to their £480 million revenue and £130.7 million 2015 pre-tax profit forecasts, and is mulling whether to up estimates beyond too. Renishaw is ploughing hefty investment into research and development (R&D) for new product lines plus extra staff, so the challenge is maintaining margins.

Management is asking investors to trust it, and back its judgement. Investors enriched by the shares recent racing success must make up their minds independently of this past performance.

Issue Date: 29 Jan 2015