14 Nov

Announcement of interim results for the six months to 30 September 2023

Leading positions in structural growth markets drove revenue, profit and order book increases

Financial highlights

  • Revenue growth of 7.5% at constant currency driven by particularly good growth in Research & Discovery.
  • Constant currency growth in order book of 10% to £332m following positive book-to-bill of 1.07.
  • Orders slightly down (2.3%) at constant currency against strong comparator period (2022: up 18.7%).
  • Adjusted operating profit of £36.5m (2022: £36.8m), growth of 6.5% at constant currency.
  • Constant currency adjusted operating profit margin of 18.2% was broadly in line with last year (2022: 18.4%), reflecting a slightly increased gross margin offset by investments in the period; reported margin at 17.4% after currency headwind.
  • Normalised cash conversion of 41% reflects an adjustment for capital expenditure on capacity expansion and inventory build-up ahead of transfer of operations to new facility and is expected to return to historic rates in the second half.
  • Growth in interim dividend of 6.5% to 4.9p.

Strategic and operational highlights

  • Leading positions in key markets in Healthcare & Life Science, Semiconductor (with a high proportion to compound semiconductor) and Advanced Materials driving good book-to-bill and 7.5% constant currency revenue growth.
  • Strong revenue growth in Healthcare & Life Science (+22% at constant currency) and Advanced Materials (+12%); our robust performance in Semiconductor & Communications (+2%) demonstrates our resilience within the cyclical semiconductor market.
  • Revenue growth primarily driven by Europe and Asia. Strong constant currency revenue growth of 18% in China, where we have begun to pivot to a broader customer base, as demonstrated by order growth of 4% at constant currency.
  • Strong customer demand for our leading product portfolio which supports Advanced Materials research and our latest optical microscopy systems and imaging software for the Healthcare & Life Science market.
  • Strong double-digit growth to academic customers across our markets, offsetting slower phasing of orders from semiconductor and quantum commercial customers.
  • Investment in infrastructure to support future growth: new £75m state-of-the-art facility for compound semiconductor systems in Bristol; beginning £15m extension of production capacity in Belfast to meet growing Life Science demand. Continued investment (£2m in H1) in operational and IT capabilities to drive process and cost efficiencies.

Richard Tyson, Chief Executive Officer of Oxford Instruments plc, said:

“This is a very robust set of results for Oxford Instruments. Our focus on specialist niches within structural growth markets has supported strong revenue and adjusted operating profit growth at constant currency (7.5% and 6.5% respectively), and our positive book-to-bill of 1.07 and order book growth of 10% demonstrates continued strong global demand for our leading products and services.

“We enter the second half with a strong order book and a good pipeline, remaining mindful of the current macroeconomic and political climate. Our operational improvement programme is expected to support an increase in production, underpinning our confidence in an improvement in second half trading, with our normal seasonal second half weighting. Our expectations for the full year trading performance are unchanged.

“Having joined Oxford Instruments six weeks ago, I have been busy getting to know the business. I have already spent a considerable amount of time meeting our people and customers, and immersing myself in the business. These early meetings have reinforced my reasons for joining and the key strengths which drive Oxford Instruments’ leading position in the marketplace. These include differentiated, innovative and value-add technologies, outstanding colleagues with deep expertise, and leading positions in structural growth markets.

“Oxford Instruments has made progress over recent years in becoming more commercial, with increased customer intimacy and end-market focus. This remains an important strategic focus, with further opportunity to enhance the Group’s customer interface and new product development.

“I believe there is a substantial opportunity to pair this with enhanced operational performance and effectiveness to deliver even better outcomes for customers, together with margin expansion and attractive, sustainable growth. Our strong financial position also supports the current elevated levels of organic investment for future growth and our ability to selectively make acquisitions to augment that growth.

“The Group is in a strong position with exciting prospects. We will continue to build on Oxford Instruments’ excellent reputation amongst the world’s leading companies and scientific research communities. I look forward to working with the team to build on these strong foundations.”

The financial information in this preliminary announcement has been prepared in accordance with UK adopted international accounting standards and IAS 34 interim financial reporting. The Group has applied all accounting standards and interpretations issued relevant to its operations and effective for accounting periods beginning on 1 April 2023. The IFRS accounting policies have been applied consistently to all periods. 

Issued for and on behalf of Oxford Instruments plc

View the full release here.