Britain's Renishaw cuts annual profit forecast as lockdown bites

British engineering group Renishaw Plc cut its full-year profit forecast on Tuesday, saying the coronavirus-induced downturn was set to harm sales in the automotive and aerospace sectors after three quarters marred by Sino-U.S. trade tensions.

The company, part of a consortium to produce ventilators to help the National Health Service cope with the coronavirus outbreak, said it now expects an adjusted pretax profit of between 45 million pounds ($55.41 million) and 55 million pounds, from an earlier forecast of 50 million-70 million pounds. Earlier in the year, Renishaw had also warned of lower earnings due to lean demand in its machine-tool sector and uncertainties surrounding the Sino-U.S. trade dispute.

The company said it has seen a "good recovery" in China from an earlier drop in demand due to the lockdown but expects to feel the impact of the pandemic in Europe, the Middle East, and Africa later this year. Revenue for the nine months ended March was down 9.6% at 389.9 million pounds, the company said, adding that it expects annual revenue to be in the range of about 490 million pounds to 505 million pounds, down from 574 million pounds reported in 2019.

"However, despite subdued demand conditions overall, we have seen growth in our optical and laser encoder product lines due to a recovery in the semiconductor market," the company said in a statement. Renishaw, which canceled its dividend in March, has also cut board and management pay to cope with the crisis. It ended March with 94 million pounds in net cash balance.

($1 = 0.8121 pounds)