Oxford Instruments, a leading manufacturing and research company, has experienced a notable surge in its share price despite reporting a significant decline in profits for the first half of the year. The company’s shares rose by 9.93% in early trading, reaching 1,970, as it began to recover from substantial disruptions earlier in the year.
The FTSE 250 company reported a 7.9% drop in revenue to £185.5 million, attributed to delayed shipments and market volatility resulting from US tariffs. Profit before tax decreased by 22.5% from £26 million to £25.4 million, although cash flow increased from £39.3 million to £45.1 million.
Despite the weaker profits, Oxford Instruments has upheld its full-year operating profit guidance of £5.5 million and increased its dividend by 5.9% to 5.4 pence. However, basic earnings per share fell by 29.9% from 46.6 pence to 33 pence.
Richard Tyson, the company’s chief executive, commented, “Our trading performance reflects that we, like others, have had to navigate the impact of tariffs and the related global economic disruption.”
Order momentum and sales growth have been credited for the company’s optimism in the latter half of the year. The business, based in Oxfordshire, reported a 1.4% increase in orders to £205.2 million, driven by strong semiconductor sales to the US and Europe through its advanced technologies division.
The company completed its move to a new semiconductor site in Bristol, enhancing its production and manufacturing capabilities after selling its Somerset factory for £4.8 million. The Imaging and Analysis division also launched new products, expanding customer reach following the refurbishment of its Belfast facility.
Oxford Instruments anticipates completing the sale of its Nano Science branch in the third quarter, with proceeds to be reinvested in high-performing sectors, such as semiconductors and life sciences.
Looking ahead, the company has completed £32 million of its £50 million share buyback programme and plans to increase the initiative to £100 million. Oxford Instruments remains committed to investing 8% to 9% of its revenue in research and development to drive growth.
Analysts maintain a buy rating for the company, attributing the revenue downgrade to early trading issues unlikely to persist. Peel Hunt’s morning note stated, “We see the recent setback as an opportunity to build earnings momentum, which should be very supportive for the shares.”
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