Potential bidders could soon emerge again for Oxford Instruments (OXIG) as confidence builds around the scientific equipment maker’s financial performance.
The company was recently the subject of a takeover bid by fellow FTSE 250 constituent Spectris (SXS), but the deal fell through, with Spectris backing off due to ‘significant uncertainty in global economic conditions.’ Oxford Instruments saw its share price rally 12% to an 18-month high £26.65 as news of Spectris’ possible buyout emerged, yet within 10 days the stock had plunged to £17.60 as the potential buyer walked away.
Oxford Instruments was back in demand with investors on Wednesday (13 April 2022) after the company said it expected its annual revenue and adjusted operating profit to be ‘marginally’ ahead of internal expectations, despite experiencing supply chain disruption and cost inflation.
‘This full year performance reflects good progress in the second half of the financial year, with continued strong order growth, supported by resilient end-markets, leaving the group with a healthy order book as it enters the current financial year,’ the company added.
The share price rallied more than 8% to £22.45.
UPBEAT ANALYSTS RAISE ESTIMATES
Analysts responded by increasing forecasts for the year just closed (31 March 2022), with Numis raising its operating profit projection from £63.5 million to £65.5 million, while lifting its March 2023 estimates by 7%, putting the company on course for £70 million operating profit and 92.6p per share of earnings.
This improving performance picture could potentially see Spectris rekindle its interest in buying Oxford Instruments, although other buyers could also emerge.
These could perhaps include US-based science tools specialists Thermo Fisher Scientific (TMO:NYSE) and Brucker (BRKR:NASDAQ), or Germany’s Aixtron (AIXA:ETR). Fair value estimates of Oxford Instruments range from £26.35 (Shore Capital) to £26.50 (Numis).
