Oxford Instruments plc Quarter 3 Trading Update
Oxford Instruments plc, a leading provider of high technology tools and systems for industry and research, today issues a Quarter 3 Trading Update which covers the period from 1st October 2014 to date.
In the third quarter organic orders and revenues were similar to the same period last year. In addition, Andor the acquisition made in the fourth quarter last year continues to perform well.
Significant orders, both taken in the year and forecast to be taken in Quarter 4, are for delivery to Russia. Recent tightening in the application of trade sanctions and, in particular the cancelling of certain export licences mean we no longer expect to convert theses orders to sales. We now assume that no sales can be made to Russia for the remainder of this year and we are also assuming no sales to Russia next year.
In addition, our forecast of recovery in the Japanese market has not yet occurred. The effects of Russia and Japan, combined with weaker trading in our short lead-time Industrial Analysis business means that, whilst we expect revenues for the second half to be ahead of the same period last year, we believe they will fall short of market expectations. We now anticipate adjusted profit before tax for the current year will be approximately £35 million.
In response to these challenges we are taking action to reduce costs and improve efficiency. Subject to consultation this may result in the closure of some sites and a reduction in headcount. This project aims to produce a cost saving of £6 million in the next financial year. The one off, cash costs of achieving these savings are expected to be in the region of £5 million which will be taken as an exceptional item in the current year.
Whilst it is not possible to predict when the situation in Russia will recover, order intake in Japan is improving. We expect to see the Group grow next year and beyond as we execute on our nanotechnology strategy.
Oxford Instruments plc
Tel: 01865 393200
Jonathan Flint, Chief Executive
Kevin Boyd, Group Finance Director
Tel: 020 3128 8100
Rachel Hirst/ Jack Holden