Oxford Instruments (OXIG) H2 2026 earnings summary

Executive summary

• Achieved strong full-year performance with significant improvement in the second half, overcoming early market headwinds and delivering results ahead of expectations.

• Orders grew 8% year-over-year to £450.4m, with revenue at £423.2m, down 3% on an organic constant currency basis.

• Strategic transformation included divesting the NanoScience business, simplifying operations into two divisions, and focusing on commercial and high-volume manufacturing customers.

• Operational execution and restructuring, especially in Belfast, drove margin improvement, cost efficiencies, and a 60% productivity gain.

• Positioned for further growth in FY 2027, with a robust order book and strong momentum in key markets.

Financial highlights

• Group gross margin increased to 55.8%, up 90 basis points year-over-year on a constant currency basis.

• Revenue declined 3% year-over-year at constant currency, but recovered in Q4/H2, especially in Advanced Technologies.

• Cash conversion remained strong at 89%, with robust free cash flow of £41.9m despite lower operating profit.

• Adjusted operating margin improved to 18.2% after NanoScience divestment, up 150 basis points.

• Adjusted EPS fell 7.7% to 100.7p; full-year dividend up 6.3% to 23.6p.

Outlook and guidance

• Expecting strong H1 FY27 revenue growth as order backlog converts, with high teens revenue growth in Advanced Technologies and margin targets raised to 12%-15% medium term.

• Imaging & Analysis anticipated to deliver low single-digit revenue growth in FY 2027.

• Order book at year-end covers the majority of FY 2027 revenue expectations, supporting strong execution focus.

• Adjusted tax rate expected to stabilize at 24%-24.5% in FY 2027, about 100 basis points below previous guidance.