- Full year 2023 operating profit to be above prior expectations
- Strong trading expected to lead to broker upgrades
- CEO Barkshire to be succeeded by Richard Tyson
Technology products and services provider to industry and scientific research communities Oxford Instruments (OXIG) saw its shares gain over 5% to £25.80 on Thursday after it increased operating profit guidance above prior expectations.
The company said its increased focus on US, European and Japanese markets to meet customer demand has resulted in ‘significant growth’ in orders and revenues from these regions.
Despite Covid-related disruptions in China orders and revenues have remained in line with the prior year while global supply challenges have improved in the second half.
Consequently, the company sees revenue growth for the year to 31 March to be around 22% with an adjusted operating margin of 18%, unchanged on the year despite cost headwinds and increased investment.
BROKER UPGRADES LIKELY
Shore Capital said stronger than expected trading will likely lead to consensus analyst upgrades in adjusted operating profit of around 15% to £81 million.
The broker anticipates increasing its operating profit forecasts for the outer years by around 10% and upping its price target by 25% to between £29 and £30.
‘We expect Oxford to continue to benefit operationally from its restructuring programme, increasingly focusing on driving margins to economically sustainable levels, as well as the long-term secular growth trends seen in instrumentation/global expertise in critical areas of technology’ the broker said.
CEO SUCCESSION
The company announced the retirement of CEO Ian Barkshire who will be replaced by Richard Tyson, CEO of electronics components maker TT Electronics (TTG).
Shares in TT Electronics fell 4% to 188p.
Barkshire has led the nanotechnology tools maker for the past seven years and has been with the company for over 25 years. ‘It has been an honour to steer one of the UK's most innovative companies, and to work with some of the most dedicated and talented people in our industry.
‘I am fully committed to continuing our growth trajectory through my remaining time in post, and to supporting Richard, the Board and my colleagues during the forthcoming period of transition’, said Barkshire.
The two companies are working together to agree a date for the formal handover.
