Wednesday 26 June 2019

Renishaw ups its direct sales after downturn in Asia

Measurement tool maker issues second profit warning in three months due to the dip, writes John Reynolds

David McMurtry
David McMurtry

Renishaw, the engineering company co-founded by Irish billionaire inventor David McMurtry, has issued its second profit warning in three months due to a downturn in sales of its measurement tools to manufacturers in Asia.

The firm - which manufactures medical robots and 3D metal printers - is increasing its sales direct to end customers in a bid to increase profitability and to counteract the sales dip.

Speaking to the Sunday Independent at the firm's Gloucestershire HQ, Clontarf native McMurtry said that a downturn in manufacturing of smartphones, microchips and flat-panel TVs had been exacerbated by US President Donald Trump's increased tariffs on exports from China, which are now at a rate of 25pc.

"This is a trough, but we don't know how long it will carry on for.

"Perhaps we will have to look to the history books for guidance on this one," he said.

Since January, the company's forecasted full-year revenues have been revised from £635m (€724m) to £665m down to £580m to £600m, with predicted profits revised from £140m-£160m down to £105m-£120m.

Renishaw executives emphasised that the company is pursuing more direct sales to its customers, which include car manufacturer Renault. One of its devices reduced the manufacturing process time for one of the carmaker's engine blocks by 73pc, to 19 seconds.

McMurtry's firm was positive about increasing sales in the US and EMEA, with an office in Silicon Valley assisting manufacturers of electric vehicles, in-car systems, smartphones and other consumer electronics.

Analysts suggested the firm has worked with Apple and Tesla there, and may have worked with components makers for the latest generation of spacecraft backed by the likes of Elon Musk.

One of Ireland's wealthiest entrepreneurs, McMurtry has invested in a small electronic car startup. It's staffed by a small group of engineers who have worked in motor racing and for various sports car manufacturers.

"I'm fascinated by the trillion-dollar bet China has made on making electric cars and batteries for them.

"There has also been a huge amount of investment into various new components such as inverters.

"This investment of mine is my folly, I joke. We are trying to do something that no-one else has thought of. My team here in Gloucestershire are all very dedicated and hard-working."

Renishaw employs more than 260 people in Swords, Co Dublin, where the firm has a building ready to start shipping to European customers, depending on the outcome of Brexit. Its Equator measuring devices are manufactured there.

McMurtry also criticised the British government for not supporting "the real wealth creators in manufacturing" enough, in comparison to, say, China.

The London-listed firm founded by the 79-year-old Dubliner employs more than 4,800 people around the world.

Sunday Indo Business

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