Renishaw Plc, the scientific measurement and optoelectronic specialist in Wotton-under-Edge, Gloucestershire, has reported full year pre-tax profits to June 30 up 15% at UKP8.2m; sales rose 6.0% to UKP51m. The company’s business remains predominantly international, with 90.7% of sales overseas, though the UK is now 9.3% of the total, up from 7.6%, and UK turnover was up 30% to UKP4.7m. Renishaw saw particular demand growth for its new scanning products and Raman microscope, and geographic growth in the Far East, with the exception of Japan, where turnover fell 6% to UKP5.8m. Sales in the US also grew 15% to UKP109.7m while the biggest faller was Germany with turnover down 19% at UKP6.8m. The company attributes the rise in pre-tax profits not only to increased turnover but also the firm control of overhead costs. Net interest receivable fell 52.3% to UKP1.05m, because of lower interest rates, on cash of UKP22.2m. Renishaw’s new manufacturing facility at New Mills is now fully operational while the factory at Cwmbran, South Wales, with a book value of UKP907,000, has a purchase option agreement with the current lessee for UKP3.0m, a non-returnable UKP250,000 deposit has already been paid. Research and development and associated engineering totalled UKP6.0m, 12% of turnover. Since the results, further investment in CAD/CAM technology has been made, with more staff taken on. The company will pay a final dividend of 4.4 pence, giving a total for the year of 6.9 pence, up 6.1%. Renishaw is also proposing a capitalisation issue of one share for every 10 held, also known as a bonus issue or scrip issue. This fairly cheap accountancy exercise will increase the total issued share capital to around 54m. It will not affect the value of the company, and subsequently the share price should realign itself down by 10%. The lower price and the increased number may increase marketability for a fairly tightly held share – but as they don’t appear unduly heavy at 280p and realignment is only about 28 pence, the exercise appears rather marginal. The move adjusts the balance between the share premium account and the ordinary share capital account. Ordinary share capital represents the nominal cost of the share, the share premium account is the difference between the nominal price and the price at which the shares were first sold. A capitalisation issue of one for 10 increases the value of the ordinary share account 10%. And if the share price fails to realign, shareholders won’t be too disappointed! The move is generally only carried out by healthy companies; the risk is that the share price falls very close to or below par, where all sorts of heavy accounting sanctions come into play.
