Highlights

  • Group H1 order intake up 1% OCC with Q2 growth of nearly 6%.
  • Imaging & Analysis H1 revenue down 9% OCC; AT revenue impacted by tariffs.
  • Full year revenue and AOP expected to remain similar to prior year on OCC basis.

Oxford Instruments’ (LSE:OXIG) H1 order intake increased slightly by just over 1% on an organic constant currency (OCC) basis compared to the prior year. While Q1 declined by around 3%, Q2 returned to growth of nearly 6%. The Group’s half-year book-to-bill ratio is projected at approximately 1.1, up from 1.0 in H1 last year.

H1 revenues are projected to fall approximately 8% on an OCC basis (10% reported). The loss of high-margin Imaging & Analysis revenue leads to an OCC-adjusted operating profit margin of around 14.5% (13.5% reported). Management anticipates improved margins in H2 due to modest revenue growth, seasonal factors, Belfast cost savings, and other margin initiatives.

Imaging & Analysis Division
The I&A division faced order delays in Q1, with intake down 11%, followed by Q2 in line with the prior year. H1 order intake fell roughly 6% OCC, resulting in revenues about 9% lower OCC (nearly 11% reported).

“The pace of any recovery of the healthcare and life sciences market continues to be a key uncertainty for the Belfast business this year, with conditions remaining challenging. Our priority remains on winning greater market share through focused sales effort and new products,” the company noted.

Business improvements in Belfast, including workforce reductions and a refocused product portfolio, are expected to positively influence H2 margins. Teams have adapted to tariff and supply challenges, including rare earth materials, to mitigate potential impacts.

Advanced Technologies Division
The AT division saw continued order growth, driven by compound semiconductor demand, augmented reality, and datacomms applications. H1 order intake rose 25% OCC, with the full H2 order book already secured. Revenue for H1 is expected to be around 7% lower OCC, mainly due to US-China shipment delays and the timing of high-value deliveries into Q3.

“The start of our financial year coincided with the beginning of a turbulent time in our markets, as others in the sector have commented on. I am proud of our team's proactive and customer-focused approach to this very dynamic global trading landscape, driving an improving picture in Q2, albeit we are now assuming that we will not recover the H1 revenue shortfall. At the same time, it has been particularly pleasing to see demand for our compound semiconductor business continuing to grow at a fast pace. Our new Severn Beach facility, and the performance of our market-leading technologies, have proved to be clear differentiators for Oxford Instruments in the market,” commented CEO Richard Tyson.

Currency Impact and Divestment
Currency movements are expected to reduce operating profit by an additional £1m beyond prior guidance. The planned sale of the NanoScience business is progressing and is expected to complete in Q3, in line with earlier guidance.

Outlook
Oxford Instruments anticipates full-year revenue, adjusted operating profit, and AOP margin to be broadly in line with last year on an OCC basis, supported by a recovery in H2 following Q1 disruptions.

Share Performance

The company is currently trading at 1,880 GBX, down approximately 5.05% from its previous close of 1,980 GBX.