The soaring share price of Renishaw, one of Britain’s most specialist precision engineers, has come to an abrupt halt despite its half year numbers putting it on track to hit City estimates.
Shares in Renishaw dived 820p to £48.20 as investors continue to digest the news that Sir David McMurtry, the company’s founder, largest shareholder, chairman and chief executive is paring back his command. He has named a new chief executive but remains executive chairman.
The fall ended a two-year surge in the stock, from £16.95 to Monday’s £57.75.
Renishaw, based in Gloucestershire and employing 2,700 people in the UK, makes measuring instruments as well as microtools used in neurosurgery. Its market value of about £3.5 billion, 25 times its profits, indicates the high ratings it enjoys in the City.
Yesterday it said, with a minor warning on “current economic conditions”, that it expected revenues in the financial year to end of the June to come in between £575 million and £605 million. On that income it said it expected to make pre-tax profits of between £127 million and £147 million, numbers fairly in line with analysts’ thinking.
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The interim dividend was up from 12.5p to 14p on half year results showing a 73 per cent increase in profits to £62 million on revenues in the six months 20 per cent better at £279 million. Revenues in the Far East rose 21 per cent to £125 million, and the Americas were 26 per cent better at £58 million.
The last time, the company had a scare about its prospects was two years ago when there was a dip in China in smartphone growth, in which Renishaw’s microtechnology is involved.
Earlier in the week, Renishaw had announced that Will Lee will take over as chief executive from February 1 with Sir David stepping back to concentrate on “innovation and product strategy.”
Mr Lee, an Oxford physician, joined Renishaw 22 years ago. Sir David said: “I am confident that Will can inspire the next generation to build on Renishaw’s heritage and we are looking forward to working closely together.”