Annual financial statement
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RNS Number : 8669VRenishaw PLC23 September 2026 Renishaw plc 23 September 2026 Preliminary announcement of results for the year ended 30 June 2026 Record year with accelerating revenue growth and higher operating margin Will Lee, Chief Executive Officer, commented: "We made excellent progress in FY2026, with growth in all three segments. We are well positioned in attractivemarkets that offer substantial through-cycle growth opportunities. Our innovation-led strategy to achieveoutperformance is also delivering good financial results, with significant growth in our emerging product lines. FY2027 has started strongly as we continue to benefit from the current upturn in demand for semiconductormanufacturing equipment. We expect further strong progress on revenue, profit and operating margin in the yearahead." Performance highlights Record adjusted profit before tax, driven by strong revenue growth and operating margin improvement: Adjusted* Statutory FY2026 FY2025 Growth Constant FXgrowth FY2026 FY2025 Growth Revenue (£m) 815.8 713.0 14% 17% 815.8 713.0 14% Operating profit (£m) 152.9 112.3 36% 63% 135.3 107.9 25% Operating profit margin(%) 18.7% 15.7% 3.0%pt 5.2%pt 16.6% 15.1% 1.5%pt Profit before tax (£m) 168.0 127.2 32% 150.0 118.0 27% Earnings per share(pence) 179.5 137.8 30% 163.5 115.2 42% Adjusted cash flowconversion fromoperating activities (%) 79% 91% (12%pt) Note:%pt = percentage points Return on investedcapital (%) 17.5% 13.2% 4.3%pt Proposed dividend pershare (p) 82.0 78.1 5% · Revenue growth: 14% at actual exchange rates, 17% at constant currency*. · Strong growth in demand from customers in the semiconductor and the aerospace and defence sectors. · Emerging product lines continue to gain traction, notably additive manufacturing (AM) systems, andmetrology systems and software. · Accelerating demand throughout the year, culminating in a record Q4 at £244.2m, 28% above the prioryear, with further order book growth. · Average through-cycle revenue growth rising to 8% (5-year CAGR since FY2021). · Adjusted operating profit margin growth was 3.0%pt at actual exchange rates (and 5.2%pt at constantcurrency*), driven by margin improvement from fixed cost reduction and operational leverage, offset bycurrency headwinds. · Adjusted profit before tax* growth: 32%. · Statutory profit before tax, including £18.0m of redundancy and other one-off costs, was 27% above the prioryear. · Adjusted cash flow conversion from operating activities*: 79% (FY2025: 91%), with lower capital expenditureoffset by higher working capital to support record sales and a growing order book.
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· Strong balance sheet with cash and deposit balances of £291.0m (FY2025: £273.6m), reflecting higheroperating profit, offset by outflows for dividend, income tax paid and cost reduction programme, as well asinvestment in capital expenditure and working capital to support growth. · Return on invested capital* increased by 4.3%pt to 17.5%, driven by strong profit growth. · Proposed final dividend of 65.2 pence per share, bringing total dividend growth to +5%. · Special interim dividend of 70.0 pence per share. Segmental performance summary Record annual revenue, with strong quarterly progression throughout the year: Segmental revenue (£m) Q1 Q2 Q3 Q4 FY2026 FY2025 Growth ConstantFX growth Industrial Metrology 102.0 110.1 115.3 120.0 447.4 430.6 4% 7% Position Measurement 52.1 58.4 68.9 81.5 260.9 207.4 26% 29% Specialised Technologies 16.7 26.3 21.8 42.7 107.5 75.0 43% 46% Group 170.8 194.8 206.0 244.2 815.8 713.0 14% 17% Operating profit growth in all three segments, with significant operating margin improvement in SpecialisedTechnologies and Position Measurement: FY2026 FY2025 Change All figures in £m at actualexchange rates Revenue Adjustedoperatingprofit* Adjustedoperatingprofitmargin* Revenue Adjustedoperatingprofit* Adjustedoperatingprofitmargin* Revenue Adjustedoperatingprofit* Adjustedoperatingprofitmargin* Industrial Metrology 447.4 76.7 17.1% 430.6 75.5 17.5% 4% 2% (0.4%)pt Position Measurement 260.9 71.5 27.4% 207.4 46.6 22.5% 26% 53% 4.9%pt Specialised Technologies 107.5 4.7 4.4% 75.0 (9.9) (13.2%) 43% N/A 17.6%pt Group 815.8 152.9 18.7% 713.0 112.3 15.7% 14% 36% 3.0%pt · Industrial Metrology delivered solid revenue growth, driven by strong demand for our emerging metrologysystems and software product lines. Meanwhile, sales of metrology sensors were flat, and profitability for thesegment was marginally lower. · Position Measurement achieved a significant increase in adjusted operating profit on the back of strongrevenue growth, mainly resulting from AI-driven semiconductor manufacturing demand, driving profitability4.9%pt higher. · Specialised Technologies was our fastest-growing segment, driven mostly by sharply higher demand for ouremerging AM product line, especially into the aerospace and defence sector. This drove a 17.6%ptimprovement in profitability, moving the segment into profit, with all product lines generating a profit this year. * Note 29, Alternative performance measures, defines how each of these measures is calculated. About Renishaw We are a world leader in sensors and systems for measurement and manufacturing. We innovate with ourcustomers to make the products of the future, transforming their capabilities through unparalleled levels ofprecision, productivity and practicality. We are a global business, working closely with our customers around theworld to solve complex engineering and science challenges and improve their products and processes. We havethree segments: Industrial Metrology (IM), Position Measurement (PM), and Specialised Technologies (ST). Weoperate in three regions: APAC, EMEA and the Americas. Most of our R&D and manufacturing takes place in theUK, and we have other major manufacturing sites in Ireland and India. Further information can be found atwww.renishaw.com. Results webcast Will Lee, Chief Executive Officer, and John Shipsey, Chief Financial Officer, will host a results presentation andQ&A session at 08:30 BST today, which will be broadcast live via a webcast. Details of how to register for thiswebcast are available at: https://brrmedia.news/RSW_FY26. A recording of the presentation and Q&A session will be made available by 25 September 2026 at:www.renishaw.com/investors.
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Enquiries: communications@renishaw.com Commentary by the Chief Executive Officer Accelerating demand in many of our markets this year, including the semiconductor and aerospace and defencesectors, has helped deliver strong revenue growth across our segments and regions, with particular progress inour emerging product lines. This performance reflects the strength of our strategy for long-term organic growth. Italso highlights the significant benefits of our commitment to, and investment in, innovation to address largestructural trends, such as increasing precision in manufacturing processes and rising industrial automation totackle skills shortages. There have been challenges along the way, with flat demand in some of our traditional markets. Throughout, ourpeople have shown great resilience, while continuing to navigate geopolitical uncertainty and increasing tradeprotectionism, and supporting our cost reduction programme. This is exemplified by our sales, service andmanufacturing teams, who responded quickly to changing customer needs. I would like to thank all our people fortheir commitment this year. Strong financial performance in FY2026 Turning to this year's headline figures, at a Group level, our total revenue for the year was £815.8m, comparedwith £713.0m in FY2025. Revenue at constant exchange rates*, excluding the impact of forward contracts,increased by 17.3%. This is our first year of reporting on our three segments: Industrial Metrology (IM), Position Measurement (PM) andSpecialised Technologies (ST). We saw solid growth in IM, with a substantial proportion coming from our emergingmetrology products. In PM, we delivered strong sales growth from our established encoder product line, and weare seeing pleasing opportunities in our emerging encoder products, which allow us to address new markets. Additive manufacturing (AM) products were the key driver of performance improvement in ST. As well as achievingmultiple machine orders from existing customers, we are gaining market share, particularly in aerospace anddefence. We explain our new structure and give more performance details in our Segment review in the AnnualReport. Each of our three regions had a positive year. In APAC, revenue grew, by 17% at constant exchange rates,to £381.9m, mainly driven by demand for position encoders from semiconductor and electronics manufacturingequipment builders. The semiconductor market undergoes multi-year business cycles, and our sales andmanufacturing teams have worked hard to capitalise on the current AI-driven upturn. Demand was also strong inthe region for our Equator shopfloor gauging systems, particularly from consumer electronics subcontractmanufacturers. Revenue for the Americas grew, by 35% at constant exchange rates, to £219.0m, led by strongdemand for high-value capital equipment sales, such as our 5-axis CMMs and our metal AM machines. Theaerospace and defence and power generation sectors were the main drivers here, with the automotive sectorstrengthening in the second half of the year. In EMEA, revenue grew, by 3% at constant exchange rates, to£214.9m, with good growth in revenue for AM machines and position encoders, while demand for IM products waslower, especially in the automotive sector. Adjusted* profit before tax for the year was £168.0m (FY2025: £127.2m). Adjusted earnings per share was 179.5p(FY2025: 137.8p). Adjusted measures are the ones the Board uses to measure our underlying tradingperformance. Statutory profit before tax was £150.0m (FY2025: £118.0m), leading to Statutory earnings per shareof 163.5p (FY2025: 115.2p). Read more in the Commentary by the Chief Financial Officer below. Strong strategic progress underpinned by innovation Everything we do at Renishaw is guided by our purpose of Transforming Tomorrow Together and underpinned byour strategy. This year's performance reflects the progress we're making against our three strategic priorities -growing our existing markets, increasing the value of the technology that we sell, and extending into new, high-growth markets - as I explain below. Our long-term commitment to innovation is a key driver across thesepriorities, helping us to unlock the opportunities that arise from the big structural trends I mentioned earlier, and, inturn, to deliver our strategy. Growing in our existing markets We saw strong growth in our existing markets this year driven by one of the biggest trends shaping the worldaround us. The exponential growth in demand for AI processing has triggered unprecedented demand forsemiconductors. Since our encoders are used across the semiconductor production process, this represents asweet spot for Renishaw because it relies on increasing levels of precision and automation, and we have workedhard to win more customers that supply this market. Our established calibration product line has also benefitedfrom growing demand for increasingly precise machinery. We continue to see rising competition, particularly in China, from rivals offering 'good enough' products atattractive prices. We are responding by developing strategies to compete in entry-level markets. Increasing technology value We also made strong progress against our second strategic priority, where we aim to increase revenue bycapturing a greater proportion of the investment made by our end-user customers. Market response to our newEquator-X 500 gauging system has been really positive, with significant orders secured precisely because itaddresses the common shopfloor challenges we know customers are grappling with. Our innovation in software is also helping our progress in increasing the value of the technology we sell. We aredeveloping solutions that make it easier for customers to use our products, and also make it easier for us to sellour higher-value technology systems. For example, this year we launched our new MODUS IM Equator softwareto help Equator and Equator-X gauging system users maximise productivity. This software is our latest step inimproving the functionality and customer experience of our metrology systems. In November 2025, I had the pleasure of attending the launch of our new AM software at the Formnext show inFrankfurt, Germany. Called LIBERTAS, the software enables customers to precisely print complex shapes withoutthe need for additional supports. The customers I spoke to at the show were really excited about this development,
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many telling me that together with our recent TEMPUS technology, we've leapfrogged the competition here.Increased interest in AM from sectors including consumer electronics shows the potential for Renishaw to expandinto new, high-growth markets for this line, and validates the long-term investment we've made here. We're also seeing strong initial interest for our new Strada Intelligent Raman Microscope. Its entirely motorisedsystem, significantly faster auto-alignment capabilities, remote access options and seamless workflows, meansindustrial and multi-user laboratories can now access advanced chemical analysis. Extending into new markets Our third strategic priority is to diversify into close adjacent markets where we have strong market understandingand brand awareness. Our recently launched ASTRiA inductive encoder is designed to give precise positionfeedback in harsh operating environments and is already proving popular in a range of markets, includingaerospace and defence. This is a great example of where our focus on R&D and a new minimum viable productapproach has helped bring a product to market faster, allowing us to take advantage of an exciting, sizeableopportunity that we were not previously able to address. Understanding and addressing customer needs We're proud of the long-term relationships we've built with customers over the years. It's always a pleasure when Iget the chance to meet them, whether visiting their factories or at the various trade events that I attend during theyear across our three regions. Understanding our customers' challenges is an important aspect of how wedevelop the innovative solutions to address their needs, and something that our sales and engineering teams dothroughout the year. One of the biggest emerging conversations is around the impact of AI. This is an area ofstrategic importance to Renishaw due to our role in supporting the manufacturing of advanced semiconductors,and we continue to develop the next generation of position encoders to meet the needs of this demanding sector.AI also affects our business in other ways, helping our people to innovate and be more productive, while alsoheightening cyber risks. A simpler, more focused Renishaw While the benefits of innovation are clear in this year's performance, our new structure has also helped, with threesegments that are more closely linked to our customers and end-user markets. As well as giving investors a betterunderstanding of our business, the changes support the continued delivery of our strategy, with a single leader foreach segment accountable for every stage of product delivery. The new structure is having an impact on the Executive Committee as well, with our new segment directors,Louise Callanan (ST), Derek Marshall (IM) and Steve Oakes (PM), bringing renewed focus to our discussions. Atthe same time, our two newest colleagues, Group Human Resources Director, Clare Nicholls, and Chief FinancialOfficer, John Shipsey, have brought fresh external perspectives, complementing the deep expertise of otherCommittee members to help plan the next phase of our growth and innovation. We continue to manage our business portfolio to focus on core products. During the year we completed theclosure of the drug delivery aspect of our neurological product line and we are continuing to seek a new owner forthe remaining neurosurgical activities. Responding to employee feedback While restructuring the business has brought many positives, I know this has not been the easiest year forcolleagues. The combination of our cost reduction programme, followed by the rapid rise in demand for some ofour products, has created extra pressure on our people and processes. So I am particularly pleased that so manyemployees responded to our latest engagement survey. A 78% participation rate is good in any year, as was the85% who responded positively when asked if they feel proud to work for Renishaw. We're addressing several key points raised in the survey, including helping people feel better connectedto our strategy, developing clearer career pathways, and making it easier for them to do their job so that we canaccelerate our growth. Simplifying our processes to accelerate growth We are committed to simplifying and clarifying our operating model - our blueprint for what we do and how wework - while retaining what makes us special. Our new One Renishaw initiative is focused on developing common processes in our sales, logistics and financefunctions, supported by our new global ERP solution, Microsoft Dynamics 365. While we have faced challengeswith deploying this system, our dedicated team has worked incredibly hard and has done a fantastic job supportingour customers during the year. Refreshing our ESG strategy I've spent time this year working with colleagues to refresh our environmental, social and governance (ESG)strategy. The purpose of this review was to refine our goals, remove outdated elements and streamline our targetswhile retaining the ambition of our original strategy. We explain these changes and provide an update onour progress in our ESG review in our Annual Report. We continued to make progress against our strategy thisyear, most notably by reducing the emissions intensity of the aluminium and steel we bought in FY2026 by morethan 20% (versus FY2025), against a target of 15%. Looking ahead We made excellent progress in FY2026, with growth in all three segments. We are well positioned in attractivemarkets that offer substantial through-cycle growth opportunities. Our innovation-led strategy to deliveroutperformance is also delivering results, with significant progress in our emerging product lines. FY2027 has started strongly as we continue to benefit from the current upturn in demand for semiconductormanufacturing equipment. We expect further strong progress on revenue and profit in the year ahead. Will Lee Chief Executive Officer *Note 29, 'Alternative performance measures', defines how each of these measures is calculated.
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Commentary by the Chief Financial Officer It is a privilege to have joined Renishaw as Chief Financial Officer. I am grateful to my colleagues across theGroup for their warm welcome and support. I take no credit for the strong FY2026 results, but I very much lookforward to contributing, with Will and the wider team, to the next chapter in Renishaw's growth. Record financial performance We achieved another year of record revenue of £815.8m (FY2025: £713.0m), an increase of 14.4%. See theCommentary by the Chief Executive Officer above and Note 2 below for further detail. At constant exchange rates*, revenue would have been 17.3% higher than the previous year. The difference fromactual exchange rates is driven by a reduction in forward contract income compared to H1 FY2025, wheresignificant gains were made from contracts taken out soon after the 2022 UK 'mini Budget'. Adjusted* operating profit increased by 36.2% to £152.9m (FY2025: £112.3m), with adjusted operating marginincreasing from 15.7% to 18.7%. Our cost reduction programme and restructuring of our neurological product line in H1 delivered around £20mof cost savings during FY2026, equivalent to 2.5% of operating margin improvement. Gross margin (excluding engineering costs and adjusting items) reduced to 59.6% of revenue, from 61.7% in theprevious year. Excluding the impact of currency, this equated to a reduction of 0.9% in operating margin, primarilydriven by product and geographic mix. On the other hand, positive operating leverage contributed a 4.4% improvement in operating margin, as salesvolumes grew faster than engineering, distribution and administrative expenses (excluding adjusting items). This improvement was net of an increase in performance related bonuses of £6.9m. The impact of US tariffs, netof refunds, has not been significant to our financial performance. Impairments of £8.8m (FY2025: £2.8m) reduced operating margin by 0.7%, of which £5.3m was due toreprioritising resource away from a new encoder product, following a significant increase in demand for otherencoder products. The remaining £3.5m relates to investment properties in Slovenia and the UK. Currency had an adverse effect of 2.2% on operating margin at actual exchange rates. At constant exchangerates, adjusted operating profit would have been 62.6% higher than last year. We aim to hedge a significantproportion of our anticipated Euro, US Dollar, HK Dollar and Japanese Yen cash inflows over a two-year period.From July 2026 we removed our previous forward rate caps that could result in unhedged periods. This increasescertainty over forward positions, although we maintain some flexibility over coverage. See Note 25 Financialinstruments for more information on our coverage and hedging policies. After financial income less expense (excluding adjusting items) and share of profits of joint ventures of £15.1m(FY2025: £15.0m), adjusted profit before tax was a record £168.0m (FY2025: £127.2m). Statutory operating profit was £135.3m (FY2025: £107.9m), with adjusting items mostly relating to the costreduction programme. Statutory profit before tax was £150.0m, compared with £118.0m in the previous year. SeeNote 29 for reconciliations of adjusted profit measures. The FY2026 effective tax rate decreased to 20.7% (FY2025: 29.0%) mostly as a result of the reversal of historicaland non-recurring tax matters. The underlying effective tax rate of 22.2% was 1%pt higher than the previous year,due to higher profits achieved in the UK. Adjusted earnings per share was 179.5p (FY2025: 137.8p) and statutory earnings per share was 163.5p (FY2025:115.2p). Maintaining a strong financial position Our liquidity position further improved during the year, with cash and cash equivalents and bank deposit balancesat 30 June 2026 of £291.0m (30 June 2025: £273.6m). Our cash conversion from operating activities fell to 79% this year from 91% in FY2025 but remained above ourtarget of 70%. The reduction was driven by rising working capital required to support rapid growth in ordersthrough the year, with increases in both inventories and trade receivables. We invested less in capital expenditurethis year, totalling £38.3m (FY2025: £46.3m), which was mainly plant and equipment to support manufacturingproductivity and additional capacity. Our capital allocation strategy remains to maintain a strong financial position, generate cash to invest in organicgrowth, and provide regular returns to shareholders. We are committed to R&D investment in new products andprocesses, and may seek to accelerate growth in the future with targeted acquisitions. We continue to valuehaving cash in the bank to protect from downturns and react swiftly where investment or market captureopportunities arise. Our return on invested capital (ROIC) improved by 4.3%pt to 17.5% due to higher profit after tax and stable levelsof invested capital. We have benefitted from our strong asset base following recent investment in ourmanufacturing facilities, which has enabled us to pursue profitable growth opportunities. This year we paid an interim dividend of 16.8p per share (FY2025: 16.8p) and are proposing a final dividend of65.2p per share (FY2025: 61.3p), resulting in a total dividend for the year of 82.0p per share, a 5% increase on theprevious year. In addition to the final dividend, we have also approved a special dividend of 70.0p per share as aninterim dividend. Looking forward We have had another successful year, and I believe that we can continue to build on current momentum. We areexpanding the capacity of our encoder production lines to meet customer demand, and we expect a short-termpayback on this investment. While markets are positive, it is also vital that we enhance the underlying performance of our business by makingthe right investments in our infrastructure. Our new global ERP system is a priority. We have strengthened thegovernance of this programme to address deployment challenges, and to ensure that planned productivityimprovements are realised.
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We are increasingly focused on cash generation and return on investment, with opportunities to improve ourperformance in both metrics. We have changed the remuneration policy for our senior team to include anincreased weighting for annual cash conversion, and to incentivise achievement of our ROIC target over a three-year period. The 2027 financial year has started strongly, and we expect to make further improvements to our operatingmargins in the year ahead. John Shipsey Chief Financial Officer *Note 29, 'Alternative performance measures', defines how each of these measures is calculated. Principal risks and uncertainties Our performance is subject to a number of risks - the principal risks, the potential impact and what we are doing to manage the risk are listed in the table below, as well as an indication of the movement of the risk in the last year, the velocity of the risk, our appetite towards that risk, and how the risk links to our strategy. The Board has conducted a robust assessment of the principal risks facing the business. Velocity Appetite Very Low Very slow impact. Response timeadequate to mitigate effects Very Low Following a marginal-risk, marginalreward approach that represents thesafest strategic route available Low Slow impact. Robust response tostrategy may mitigate effects Low Seeking to integrate sufficientcontrol and mitigation methods toaccommodate a low level of risk,although this will also limitreward potential Medium Moderate time to impact. Swift androbust response may mitigateeffects Balanced An approach that brings a high chanceof success, considering the risks, alongwith reasonable rewards, economicand otherwise High Fast impact. Immediate or near-term response may mitigate effects High Willing to consider bolder opportunities,with higher levels of risk, in exchangefor increased business pay-offs Very High Very rapid impact with little or nowarning. No time, or very limitedtime, to respond and mitigateeffects Very High Pursuing high-risk, unprovenoptions that carry the potential for high-level rewards Link to strategy: - G: Growth in existing markets - I: Increasing technology value - E: Extending into new markets 1. Geopolitical uncertainty Risk movement Increased Velocity Very High Appetite Balanced Link to strategy All Risk owner Chief ExecutiveOfficer Risk description We are unable or slow to respond to geopolitical changes that may affect the delivery of our growthplans. Potential impact · Reduced addressable market. · Increased sales concentration in fewerregions. · Capital losses from stranded assets. · Reputational damage if key marketsbecome inaccessible. · Reduced margins or competitiveness. · Decline in overall demand. · Disruption to supply chain. What we are doing to manage this risk · Horizon scanning is undertaken to monitor market, geopolitical and regulatory developments, with reportingto the Executive Committee continuing to be enhanced. · A rolling five-year strategic plan is maintained and updated to reflect developments in the businessenvironment. · Scenario modelling supports the planning process, with further work underway to simulate the impact of financialand operational crises. · A Crisis Management Policy is in place and continues to be developed to support crisis preparedness andresponse. · Manufacturing business continuity plans are in place, supported by supply chain risk assessments andprocurement measures, and are subject to ongoingreview. · The operating model is reviewed periodically to support alignment with the Group's strategy and risk appetite.
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2. Low-price competition Risk movementIncreased Velocity Medium Appetite Balanced Link to strategy G, I Risk owner Chief Executive Officer Risk description We are disrupted by emerging rivals that offer comparable products for lower prices in our markets,leading to margin erosion and market share loss, compounded by market access issues in marketssuch as China. Potential impact · Reduced revenue, profit and cashgeneration. · Loss of market share and/or pricing power,but also provides anopportunity to expandinto new marketsegments. · Reduced operating margins. · Loss of reputation as a leader in innovation. What we are doing to manage this risk · Protection of intellectual property through registration, monitoring and enforcement activities, including thesafeguarding of copyrights. · Use of distribution agreements, including arrangements providing for exclusivity or other commercial protections. · Key account management for major customers to support strong customer relationships and ensure the Group'svalue proposition, products and service offering areclearly understood. · Development of localised manufacturing strategies for selected products and markets to support market access,reduce lead times and improve cost competitiveness. · Application of targeted pricing strategies for selected entry-level products in emerging markets. · Ongoing cost-reduction initiatives across manufacturing, supported by product and process design improvements,including automation where appropriate. · Leveraging the Renishaw brand and reputation to emphasise the importance of quality and performanceand support appropriate margins. 3. Industry fluctuations Risk movement Increased Velocity High Appetite Balanced Link to strategy G, I Risk owner Chief ExecutiveOfficer Risk description We fail to respond in an agile manner to industry fluctuations in demand, leading to erosion ofmarket position and customer relationships (in an upturn), and margins (in a downturn). Potential impact · Loss of market share. · Erosion of customer relationships. · Restriction on long- term growth. · Reduced revenue, profit and cashgeneration. What we are doing to manage this risk · Horizon scanning uses internal and external data to monitor market conditions and trends, supported byExecutive Committee updates and the Board's annualstrategy review. · The daily activity report process supports the maintenance of monthly and full-year forecasts, with formal quarterlyreviews at regional and Group level. · Forecasts are reviewed regularly to support decision- making and maintain an up-to-date view of expecteddemand. · Production planning reflects historical product mix, demand forecasts, inventory levels and new productintroductions. · Annual cost budgets are set across the business and monitored monthly by Group Finance. · Workforce planning includes contingency arrangements to respond to changes in demand. 4. Cyber Risk movement Increased Velocity Very High Appetite Low Link to strategy All Risk owner Chief FinancialOfficer Risk description Cyber attacks against our business are increasing in number, complexity, and the degree to whichthey are personally targeting Renishaw and our employees. We continue to face other data securitythreats. A successful cyber attack or a significant data loss could severely affect our ability tooperate, or lead to the loss of personal and commercially sensitive data and expose us toreputational and financial damage. Potential impact · Inability to operate normal processes fora potentiallysignificant period. · Loss of intellectual property and/orcommerciallysensitive and/orpersonal data. What we are doing to manage this risk · The Group maintains an information security management system certified to ISO/IEC 27001:2022, providing arecognised framework for identifying, assessing andmanaging information security, cyber security and privacyrisks. The standard comprises 93 controls across fourcategories: 1 Organisational controls, including governancearrangements, defined roles and responsibilities,policies and risk assessment processes.
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· Financial loss and reputational damage. · Reduced customer service. · Diversion of management timeand an impact onbusiness decision-making. 2 People controls, including employee training,awareness and related personnel security measures. 3 Physical controls, including secure areas, accesscontrols, equipment security and environmentalprotection measures. 4 Technological controls, including network security,malware protection, data encryption, data-lossprevention, monitoring and logging, and incidentresponse capabilities. · Quarterly quality management reviews are undertaken by the IT & Security leadership team to consider emerginginternal and external risks, service performance, newlyidentified vulnerabilities and the actions required toaddress them. These reviews also monitor progressagainst actions arising from internal and externalassurance activities. · Third-party penetration testing on a perpetual basis, as well as periodic targeted exercises to find any residualgaps in our systems. · The Board receives quarterly information security updates covering key risks, initiatives to strengthen the cybersecurity framework, and the status of assurance activities. 5. IT transformation Risk movement Increased Velocity Medium Appetite Low Link to strategy All Risk owner Chief FinancialOfficer Risk description We fail to successfully implement Microsoft Dynamics 365 ahead of obsolescence of our existingsystem or with the anticipated productivity benefits. Technical issues or poor integration with existingsystems could negatively affect our ability to operate and could mean that we do not realiseproductivity aspirations, leading to manual intervention and slowing us down. Potential impact · Major systems disruption causingoperational delays. · Delays in processing or issuing invoicesand customer orders,or in procuring goodsand services. · Increased costs, including costs to fixtechnical issues andrestore or upgradeother affectedsystems. What we are doing to manage this risk · Given the deployment challenges we encountered during the year, we have paused the rollout of the existingMicrosoft Dynamics 365 solution, to assess our systemconfiguration, our business processes, and ourprogramme governance. We recently re-organised ourresources to better set us up for success, includingthrough the creation of global process owners and leads.Additionally, we are engaging third-party advisers toundertake a diagnostic on our core solution, which we aimto configure to allow us to scale at pace after our pause. Aprogramme structure has been implemented to supportthe management and delivery of Microsoft Dynamics 365,which is based on a recognised project managementframework. · Our programme Steering Committee, which includes the CFO and Group Operations Director, meets regularly toprovide strategic direction and oversee project progress. 6. Product innovation Risk movement Stable Velocity Medium Appetite High Link to strategy G, I Risk owner Chief ExecutiveOfficer Risk description Failure to develop our competitive position and derive value from our investment in productinnovation. Potential impact · Failure to lead the market withinnovative products inour core and adjacentsectors. · Gradual loss of market share. · Reduced revenue, profit and cashgeneration. · Inability to differentiate ourselvesfrom our competitors. · Failure to hit business plan targets andrecover investment inR&D. What we are doing to manage this risk · Intellectual property protection through the registration, monitoring and enforcement of rights, together withbroader protection of the Group's proprietary technologyand copyrights. · A strategic plan aligned to the Group's product innovation priorities, including regular review and refresh to supporteffective capital and resource allocation across businesssegments. · A structured product innovation process incorporating feasibility assessments, product roadmaps, stage-gatereviews and testing procedures to support commercialviability and expected returns. · Annual Group targets for the commercial launch of new products, supported by performance measures andmarketing activity designed to promote growth frominnovation. · Quarterly reviews of 'flagship' (strategically important) projects involving segment directors and the CEO,focusing on objectives, milestones, resourcing, keydecisions and risks.
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· Regular review of market and customer insights, competitor developments and broader industry trends,including the use of AI to develop new products and toenhance their performance. · Reporting to the Executive Committee and Board to inform our intellectual property strategy. 7. Supply chain dependencies (new) Risk movement Increased Velocity High Appetite Low Link to strategy All Risk owner GroupOperationsDirector Risk description Disruption to supply of products to our customers because of interruption to or loss of a criticalsupplier, leading to erosion of market position and customer relationships. Potential impact · Loss of future business and reducedrevenue, profit andcash generation. · Reduced margins or competitiveness. · Loss of market share. · Reduced operating margins. · Erosion of customer and supplierrelationships. What we are doing to manage this risk · Dual sourcing options where possible. · Risk-based inventory policy that promotes a multi-site strategy. · Dashboards that highlight inventory positions and potential revenue impact to help maintain inventory levelsand support prioritisation of alternative supply sources. · Product design owners are notified of supply risks to enable mitigation actions ahead of potential supplydisruptions. · Onboarding vendor assessment procedures including a review process to evaluate high-risk suppliers beforeproduction handover. · Product development and innovation processes include requirements for key supplier risk assessment andmitigations for new products and solutions. · Supplier relationship and performance management framework in place. 8.Non-compliance with laws and regulations Risk movement Stable Velocity High Appetite Low Link to strategy All Risk owner Group GeneralCounsel &CompanySecretary Risk description Failure to comply with applicable laws and regulations could result in criminal or civil liabilities for theCompany and its employees, damaging our reputation. It could also result in a breach of othercontracts, including insurance and banking arrangements, hampering our ability to operate. Potential impact · Potential penalties and fines, and costof investigations. · Damage to reputation and lossof future business. · Management time and attentiondiverted to deal withreports of non-compliance. · Inability to attract and retain talent. What we are doing to manage this risk · The Group maintains policy frameworks covering key compliance and operational risk areas, including anti-briberyand corruption, competition law, export controls, fraud, tax,and environmental, health and safety. · These frameworks are supported by the Code of Conduct, policies and procedures, risk assessments, due diligenceon relevant third parties, contractual protections, anddefined approval and delegation processes. · Mandatory e-learning and targeted training are given to employees according to role and risk exposure, supportedwhere appropriate by specialist external advisers. · Monitoring activities include management information, compliance reporting, gifts and hospitality controls,whistleblowing arrangements, audit activity, and red-flagmonitoring in selected areas. · Board and management oversight is supported by periodic reporting, internal review activity, and ongoing enhancementprogrammes designed to strengthen the effectiveness andconsistency of controls across the Group. 9. Exchange rates Risk movement Stable Velocity Medium Appetite Balanced Link to strategy Risk description Exchange rate fluctuations can affect our Consolidated income statement, balance sheet and cashflow, affecting near-term management and planning, investor understanding, and long-termperformance. Potential impact · Significant variations in profit. · Reduced cash generation. What we are doing to manage this risk · A Board-approved market risk management policy is in place. The strategy is reviewed annually by Group Finance,with support from external advisers, and its effectivenessand operating limits are monitored quarterly by the GroupTreasury Committee.
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G, I Risk owner Chief FinancialOfficer · Increased competition onproduct prices. · Increased costs. · Adverse impact on managementdecision-making. · Board-approved business plans are used to forecast future net cash flows and determine forward contractrequirements. · Forward contract dealings and portfolios are subject to management review and controls. 10. People Risk movement Stable Velocity Medium Appetite Balanced Link to strategy All Risk owner Group HumanResourcesDirector Risk description Failure to recruit, develop and retain a diverse, engaged workforce with the right talent and skills fornow, and the future, will limit our ability to achieve our strategic objectives. Potential impact · Delays in product delivery and abilityto deliver strategicobjectives becauseof loss of expertiseand specialisttalent. · Loss of innovative edge because ofinsufficient diversity. · Failure to develop future leaders andinsufficient talentprogression tosupport Renishaw'sfuture. · Loss of market share, reducedrevenue, poorcustomer serviceand reduced profit. · Reputational damage andincrease in attritionrates because of afailure to upholdethical standardsand behaviours. What we are doing to manage this risk · We continue to review our reward strategy for all employees to ensure remuneration practices remain competitive,support talent retention and mitigate workforce-related risks. · We are revising incentive arrangements for senior leaders to better align activity and performance. · An annual performance management cycle supports objective setting, progress reviews, feedback and year-endevaluation, with reference to defined competencies andbehaviours. · Employee potential is reviewed annually and development plans are established where appropriate, supported bytalent assessment tools. · Roles and grades are periodically benchmarked against relevant external markets to support the Group's rewardframework. · Succession plans are maintained for defined management grades and business-critical roles. · A Group-wide employee engagement survey informs actions at both Group and local level. · The Group maintains policies and procedures to promote clear standards of behaviour and support the appropriatemanagement of issues, including the Code of Conduct,Conflict of Interest, Diversity and Inclusion, Grievance andSpeak Up policies. CONSOLIDATED INCOME STATEMENTfor the year ended 30 June 2026 Adjustedtotal2026 Adjustingitems2026 Statutorytotal 2026 Adjustedtotal 2025 Adjustingitems2025 Statutorytotal 2025 from continuing operations Notes £'000 £'000 £'000 £'000 £'000 £'000 Revenue 2 815,779 - 815,779 713,044 - 713,044 Cost of sales 4 (430,423) (9,635) (440,058) (379,650) (4,379) (384,029) Gross profit 385,356 (9,635) 375,721 333,394 (4,379) 329,015 Distribution costs (156,135) (3,350) (159,485) (144,031) - (144,031) Administrative expenses (76,325) (4,586) (80,911) (77,099) - (77,099) Operating profit 152,896 (17,571) 135,325 112,264 (4,379) 107,885 Financial income 5 13,179 2,450 15,629 16,517 - 16,517 Financial expenses 5 (2,161) (2,869) (5,030) (5,088) (4,852) (9,940) Share of profits of jointventures 13 4,040 - 4,040 3,538 - 3,538 Profit before tax 167,954 (17,990) 149,964 127,231 (9,231) 118,000 Income tax expense 7 (37,261) 6,257 (31,004) (27,010) (7,233) (34,243)
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Profit for the year 130,693 (11,733) 118,960 100,221 (16,464) 83,757 Profit attributable to: Equity shareholders of theparent company 118,960 83,757 Non-controlling interest 26 - - Profit for the year 118,960 83,757 pence pence pence pence pence pence Dividend per share arising inrespect of the year 26 82.0 78.1 Dividend per share paid in theyear 26 78.1 76.2 Earnings per share (basic anddiluted) 8 179.5 (16.0) 163.5 137.8 (22.6) 115.2 See Note 29 Alternative performance measures for more details on Adjusting items. Dividend per share arising in respect of the year excludes the special dividend of 70.0p per share. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE for the year ended 30 June 2026 Adjustedtotal2026 Adjustingitems2026 Statutorytotal 2026 Adjustedtotal2025 Adjustingitems2025 Statutorytotal2025 notes £'000 £'000 £'000 £'000 £'000 £'000 Profit for the year 130,693 (11,733) 118,960 100,221 (16,464) 83,757 Other items recognised directlyin equity: Items that will not bereclassified to the Consolidatedincome statement: Remeasurement of defined benefitpension schemeassets/liabilities/reimbursementright 23 7,692 - 7,692 2,777 - 2,777 Deferred tax on remeasurement ofdefined benefit pension schemeassets/liabilities/reimbursementright (1,615) - (1,615) (374) - (374) Total for items that will not bereclassified 6,077 - 6,077 2,403 - 2,403 Items that may be reclassified tothe Consolidated incomestatement: Exchange differences in translationof overseas operations 26 (473) - (473) (6,295) - (6,295) Exchange differences in translationof overseas joint venture 26 190 - 190 169 - 169 Changes in fair value of cash flowhedges 25,26 (12,208) - (12,208) 5,804 - 5,804 Deferred tax on changes in fairvalue of cash flow hedges 7,26 3,052 - 3,052 (1,451) - (1,451) Total for items that may bereclassified (9,439) - (9,439) (1,773) - (1,773) Total other comprehensiveincome and expense, net of tax (3,362) - (3,362) 630 - 630 Total comprehensive incomeand expense for the year 127,331 (11,733) 115,598 100,851 (16,464) 84,387 Attributable to: Equity shareholders of the parentcompany 115,598 84,387 Non-controlling interest 26 - - Total comprehensive incomeand expense for the year 115,598 84,387 CONSOLIDATED BALANCE SHEET at 30 June 2026
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2026 2025notes £'000 £'000Non-current assets Property, plant and equipment 9 337,947 338,287Right-of-use assets 10 10,966 12,218Investment properties 11 19,583 11,566Intangible assets 12 52,224 50,550Investments in joint ventures 13 26,125 27,692Finance lease receivables 14 10,764 11,950Employee benefits 23 12,128 11,443Reimbursement right 23 14,566 12,909Deferred tax assets 7 22,879 22,432Derivatives 25 1,652 7,878Total non-current assets 508,834 506,925 Current assets Inventories 16 181,743 159,465Trade receivables 25 161,554 128,464Finance lease receivables 14 7,187 5,195Current tax 18,328 6,453Other receivables 25 49,952 40,732Derivatives 25 7,150 14,345 Bank deposits 15,25 142,649 186,226 Cash and cash equivalents 15,25 148,301 87,420 Total current assets 716,864 628,300 Current liabilities Trade payables 25 38,238 25,943Contract liabilities 18 26,311 14,669 Current tax 11,692 11,303 Provisions 17 9,588 8,978 Derivatives 25 1,073 150 Lease liabilities 21 4,315 3,992 Amounts payable to joint venture 13 15,948 14,530 Borrowings 20 670 764 Other payables 19 68,000 57,132 Total current liabilities 175,835 137,461 Net current assets 541,029 490,839 Non-current liabilities Lease liabilities 21 7,203 8,769 Borrowings 20 1,316 2,120Employee benefits 23 20,201 21,131Deferred tax liabilities 7 36,971 38,784 Derivatives 25 40 1,096 Total non-current liabilities 65,731 71,900 Total assets less total liabilities 984,132 925,864 Equity Share capital 26 14,558 14,558Share premium 42 42 Own shares held 26 (1,094) (2,140) Currency translation reserve 26 (3,929) (3,646) Cash flow hedging reserve 26 6,108 15,264 Retained earnings 969,365 901,170 Other reserve 26 (341) 1,193 Equity attributable to the shareholders of the parentcompany 984,709 926,441 Non-controlling interest 26 (577) (577) Total equity 984,132 925,864 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2026 Cash Own Currency flow Non- Share Share Shares translation hedging Retained Other controlling capital premium Held reserve reserve earnings reserve interest Total Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2024 14,558 42 (2,963) 2,480 10,911 870,434 1,380 (577) 896,265 Profit for the year - - - - - 83,757 - - 83,757 Other comprehensiveincome and expense (net oftax)Remeasurement of definedbenefit pension schemeassets/liabilities/reimbursementright - - - - - 2,403 - - 2,403 Foreign exchange translationdifferences - - - (6,295) - - - - (6,295) Foreign exchange related tojoint venture - - - 169 - - - - 169 Changes in fair value of cashflow hedges - - - - 4,353 - - - 4,353
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Total other comprehensiveincome and expense - - - (6,126) 4,353 2,403 - - 630 Total comprehensive incomeand expense - - - (6,126) 4,353 86,160 - - 84,387 Share-based payments charge - - - - - - 790 - 790 Distribution of own shares - - 977 - - - (977) - - Purchase of own shares - - (154) - - - - - (154) Dividends paid - - - - - (55,424) - - (55,424) Balance at 30 June 2025 14,558 42 (2,140) (3,646) 15,264 901,170 1,193 (577) 925,864 Year ended 30 June 2026Profit for the year - - - - - 118,960 - - 118,960 Other comprehensiveincome and expense (net oftax)Remeasurement of definedbenefit pension schemeassets/liabilities/reimbursementright - - - - - 6,077 - - 6,077 Foreign exchange translationdifferences - - - (473) - - - - (473) Foreign exchange related tojoint venture - - - 190 - - - - 190 Changes in fair value of cashflow hedges - - - - (9,156) - - - (9,156) Total other comprehensiveincome and expense - - - (283) (9,156) 6,077 - - (3,362) Total comprehensive incomeand expense - - - (283) (9,156) 125,037 - - 115,598 Share-based payments charge - - - - - - 491 - 491 Distribution of own shares - - 2,025 - - - (2,025) - - Purchase of own shares - - (979) - - - - - (979) Dividends paid - - - - - (56,842) - - (56,842) Balance at 30 June 2026 14,558 42 (1,094) (3,929) 6,108 969,365 (341) (577) 984,132 CONSOLIDATED STATEMENT OF CASH FLOW for the year ended 30 June 2026 2026 2025notes £'000 £'000Cash flows from operating activities Profit for the year 118,960 83,757 Adjustments for: Depreciation and impairment of property, plant and equipment,right-of-use assets, and investment properties 9,10,11 33,719 29,057 Loss/(profit) on sale of property, plant and equipment 9 107 (1,083) Amortisation and impairment of intangible assets 12 8,653 6,689 Loss on disposal of intangible assets 12 1,017 - Share of profits from joint ventures 13 (4,040) (3,538) Defined benefit pension schemes service and administrativecosts 23 2,438 1,833 Financial income 5 (15,629) (16,517) Financial expenses 5 5,030 9,940 Fair value gain on acquisition of subsidiary 30 (359) - Share-based payment expense 24 491 790 Tax expense 7 31,004 34,243 62,431 61,414 Increase/(decrease) in inventories (22,231) 2,463 Increase in trade, finance lease and other receivables (47,709) (11,025) Increase in trade and other payables 38,548 16,525 Increase in provisions 71 1,129 (31,321) 9,094 Defined benefit pension scheme contributions 23 (2,859) (162) Income taxes paid (36,681) (6,207) Cash flows from operating activities 110,530 147,896 Investing activities Purchase of property, plant and equipment, and investmentproperties 9,11 (38,342) (46,273) Sale of property, plant and equipment 3,885 4,887 Development costs capitalised 12 (9,896) (9,999) Purchase of other intangibles 12 (50) (286) Decrease/(increase) in bank deposits 15 43,577 (90,684) Interest received 5 10,773 12,216 Acquisition of a subsidiary, net of cash acquired 30 1,960 - Dividends received from joint ventures 13 957 1,500 Cash flows from investing activities 12,864 (128,639) Financing activities Repayment of borrowings 20 (731) (794)
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Amounts received as deposit from joint venture 13 1,304 5,983Interest paid 5 (938) (1,140)Repayment of principal of lease liabilities 22 (4,960) (4,284)Own shares purchased 26 (979) (154)Dividends paid 26 (56,842) (55,424)Cash flows from financing activities (63,146) (55,813) Net increase/(decrease) in cash and cash equivalents 60,248 (36,556)Cash and cash equivalents at beginning of the year 87,420 122,293Effect of exchange rate fluctuations on cash held 633 1,683 Cash and cash equivalents at end of the year 15 148,301 87,420 Cash and cash equivalents and bank deposits at the end of the year were £291.0m (2025: £273.6m). See Note 15 for more details. NOTES (FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS) 1. Accounting policies This section sets out our principal accounting policies that relate to the financial statements as a whole, along with the critical accounting judgements and estimates that management has identified as having a potentially material impact on the Group's consolidated financial statements. Where an accounting policy is applicable to a specific note in the financial statements, the policy is described within that note. Basis of preparation Renishaw plc (the Company) is a company incorporated in England and Wales. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the Group, and 'we') and equity account the Group's interest in joint ventures. The parent company financial statements present information about the Company as a separate entity and not about the Group. The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 30 June 2026 or 30 June 2025. The financial information for the year ended 30 June 2025 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditor reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under s498 (2) or (3) Companies Act 2006. In respect of the year ended 30 June 2026, an unqualified auditor's report was signed on 22 September 2026. The statutory accounts will be delivered to the Registrar of Companies following the Group's annual general meeting. The consolidated financial statements are presented in Sterling, which is the Company's functional currency and the Group's presentational currency, and all values are rounded to the nearest thousand (£'000). The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group financial statements. The critical estimates (that have a significant risk of material adjustment in the next year) and key judgements (that have a significant effect on the financial statements) made by the Directors in applying the accounting policies are noted below. Basis of consolidation Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non- controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Joint ventures are accounted for using the equity method (equity-accounted investees) and are initially recognised at cost. The Group's investments include goodwill identified on acquisition, net of any accumulated impairment losses.
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The consolidated financial statements include the Group's share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to £nil and recognition of further losses is discontinued (except to the extent that the Group has incurred legal obligations or made payments on behalf of an investee). Intragroup balances and transactions, and any unrealised income and expenses arising from intragroup transactions, are eliminated on consolidation. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Foreign currencies On consolidation, overseas subsidiaries' results are translated into Sterling at weighted average exchange rates for the year by translating each overseas subsidiary's monthly results at exchange rates applicable to the respective months. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Sterling at the foreign exchange rates prevailing at that date. Differences on exchange resulting from the translation of overseas assets and liabilities are recognised in Other comprehensive income and expense and are accumulated in equity. Monetary assets and liabilities denominated in foreign currencies are reported at the rates prevailing at the time, with any gain or loss arising from subsequent exchange rate movements being included as an exchange gain or loss in the Consolidated income statement. Foreign currency differences arising from transactions are recognised in the Consolidated income statement. New, revised or changes to existing accounting standards The following accounting standards and amendments became effective as at 1 January 2025 and has been adopted in the preparation of these financial statements, with effect from 1 July 2025: - amendments to IAS 21, Lack of exchangeability. This has not had a material effect on these financial statements. At the date of these financial statements, the following standards and amendments that are potentially relevant to the Group, and which have not been applied in these financial statements, were in issue but not yet effective: - IFRS 18 Presentation and Disclosures in Financial Statements (endorsed by the UK); and - IFRS 19 Subsidiaries without Public Accountability: Disclosures (not yet endorsed by the UK); and - amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity; and - amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments; and - amendments to IAS 21 - Translation to a Hyperinflationary Presentation Currency; and - annual improvements to IFRS - Volume 11. The adoption of these standards and interpretations in future periods is not expected to have a material impact on the financial statements of the Group. The Group has applied the temporary exception issued by the International Accounting Standards Board from the accounting requirements for deferred taxes in IAS 12 arising from the Organisation for Economic Co-operation and Development's (OECD) international tax reform. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to Global Minimum Tax income taxes.
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Alternative performance measures The financial statements are prepared in accordance with UK-adopted International Accounting Standards (IAS)and applied in accordance with the provisions of the Companies Act 2006. In measuring our performance, thefinancial measures that we use include those which have been derived from our reported results, to eliminatefactors which distort year-on-year comparisons. These are considered non-GAAP financial measures. We believe this information, along with comparable GAAP measurements, is useful to stakeholders in providing a basis for measuring our operational performance. The Board uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our performance (see Note 29). Business combinations Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets includes an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in the Consolidated income statement. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination. Critical accounting judgements and estimation uncertainties The preparation of financial statements in conformity with UK-adopted IAS requires management to make judgements, estimates and assumptions which affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances. The results of this form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may therefore differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
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The areas of critical accounting judgements and estimation uncertainties that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in the next financial year are summarised below with further details included within accounting policies as indicated. Item Key judgements (J) and estimates (E) Taxation J - Whether uncertain tax positions need to be recognisedResearch and development costs J - Whether a project meets the criteria for capitalisationCapitalised development costs E - Estimates of future cash flows for impairment testingInventories E - Determination of net realisable valueDefined benefit pension schemes E - Valuation of defined benefit pension schemes' liabilitiesDefined benefit pension schemes J - Whether past service costs need to be recognised Adjusted performance measures J - Whether items are appropriate to exclude from adjustedmeasures Climate change We have considered the potential effect of physical and transitional climate change risks when preparing these consolidated financial statements and have also considered the effect of our own Net Zero commitments. Our consideration of the potential effect of climate change on these consolidated financial statements included reviewing: - discounted cash flow forecasts, used in accounting for goodwill, capitalised development costs, and deferred tax assets; - useful economic lives and residual values of property, plant and equipment; - planned use of right-of-use assets; and - expected demand for inventories. We also considered the estimated capital expenditure needed in the next five years to deliver our Net Zero plan. Overall, we do not believe that climate change has a material effect on our accounting judgements and estimates, nor on the carrying value of assets and liabilities in the consolidated financial statements for the year ended 30 June 2026. We will continue to review this, and update our accounting and disclosures if the position changes. Going concern In preparing these financial statements, the Directors have adopted the going concern basis. The decision to adopt the going concern basis was made after considering: - the Group's strategy and business model; - the Group's risk management processes and principal risks; - the Group's financial resources and strategies; and - the process undertaken to review the Group's viability, including scenario testing. The financial models for the viability review were based on the pessimistic version of the five-year business plan, but covering a period to 31 December 2029. For context, revenue in the first year of this pessimistic base scenario is lower than the FY2026 revenue of £815.8m, while costs and other cash outflows still reflect ambitious growth plans. In the going concern assessment, the Directors reviewed this same version of the business plan but to 31 December 2027, as well as the 'severe but plausible' scenarios used in the viability review, again to 31 December 2027. These scenarios reflected a significant reduction in revenue, a significant increase in costs, and a third scenario incorporating both a reduction to revenue and an increase in costs but to a lesser degree than the first two scenarios. In each scenario the Group's cash balances remained positive throughout the period to 31 December 2027. The Directors also reviewed a reverse stress test for the period to 31 December 2027, identifying what would need to happen in this period for the Group to deplete its cash and cash equivalents and bank deposit balances. This identified a trading level so low that the Directors feel that the events that could trigger this would be remote. The Directors also concluded that the risk of a one-off cash outflow that would exhaust the Group's cash and cash equivalents and bank deposits balances in the assessment period was also remote.
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Based on this assessment, incorporating a review of the current position, the scenarios, the principal risks and mitigation, the Directors have a reasonable expectation that the Group will be able to continue operating and meet its liabilities as they fall due over the period to 31 December 2027, being the going concern period. 2. Revenue disaggregation and segmental analysis As previously announced the Group has reorganised into three new segments, which have replaced the Manufacturing technologies and Analytical instruments and medical devices segments. The new segments group together product lines with similar end-user markets, which more closely align reporting segment performance with external market data and demand drivers. Our new reporting segments are Industrial Metrology, Position Measurement and Specialised Technologies. We also manage our business by geographical region. The results of these segments and regions are regularly reviewed by the Board to assess performance and allocate resources, and are presented in this note. Accounting policy The Group generates revenue from the sale of goods, capital equipment and services. These can be sold both on their own and together. a) Sale of goods, capital equipment and services The Group's contracts with customers consist both of contracts with one performance obligation and contracts with multiple performance obligations. For contracts with one performance obligation, revenue is measured at the transaction price, which is typically the contract value except for customers entitled to volume rebates, and recognised at the point in time when control of the product transfers to the customer. This point in time is typically when the products are made available for collection by the customer, collected by the shipping agent, or delivered to the customer, depending upon the shipping terms applied to the specific contract. Contracts with multiple performance obligations typically exist where, in addition to supplying products, we also supply services such as user training, servicing and maintenance, and installation. Where the installation service is simple, does not include a significant integration service and could be performed by another party then the installation is accounted for as a separate performance obligation. Where the contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling prices. The revenue allocated to each performance obligation is then recognised when, or as, that performance obligation is satisfied. For installation, this is typically at the point in time when installation is complete. For training, this is typically the point in time when training is delivered. For servicing and maintenance, the revenue is recognised evenly over the course of the servicing agreement except for ad-hoc servicing and maintenance which is recognised at the point in time when the work is undertaken. b) Sale of software The Group provides software licences and software maintenance to customers, sold both on their own and together with associated products. For software licences, where the licence and/or maintenance are provided as part of a contract that provides customers with software licences and other goods and services, then the transaction price is allocated on the same basis as described in a) above. The Group's distinct software licences provide a right of use, and therefore revenue from software licences is recognised at the point in time when the licence is supplied to the customer. Revenue from software maintenance is recognised evenly over the term of the maintenance agreement. c) Extended warranties The Group provides standard warranties to customers that address potential latent defects that existed at point of sale and as required by law (assurance-type warranties). In some contracts, the Group also provides warranties that extend beyond the standard warranty period and may be sold to the customer (service-type warranties). Assurance-type warranties are accounted for by the Group under IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'. Service-type warranties are accounted for as separate performance obligations and therefore
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a portion of the transaction price is allocated to this element, and then recognised evenly over the period in which the service is provided. d) Contract balances Contract assets represent the Group's right to consideration in exchange for goods, capital equipment and/or services that have been transferred to a customer, and mainly includes accrued revenue in respect of goods and services provided to a customer but not yet fully billed. Contract assets are distinct from receivables, which represent the Group's right to consideration that is unconditional. Contract liabilities represent the Group's obligation to transfer goods, capital equipment and/or services to a customer for which the Group has either received consideration or consideration is due from the customer. e) Disaggregation of revenue The Group disaggregates revenue from contracts with customers between: goods, capital equipment and installation, and aftermarket services; reporting segment; and geographical location. Management believe these categories best depict how the nature, amount, timing and uncertainty of the Group's revenue is affected by economic factors. Our Industrial Metrology reporting segment consists of our sensors, measurement systems and software that allow customers to precisely measure machines and machined parts, generate inspection reports and control their production machines. Our Position Measurement reporting segment consists of encoders that enable customers to improve control and precision in their machines. Our Specialised Technologies reporting segment represents all other product lines within the Group, which consists of additive manufacturing (AM), spectroscopy and neurological product lines. The Industrial Metrology and Position Measurement reporting segments aggregate product offerings with similar economic characteristics, similar production processes and similar customer bases. More details of the Group's products and services are given in the Strategic Report. Year ended 30 June 2026 IndustrialMetrology PositionMeasurement SpecialisedTechnologies Total £'000 £'000 £'000 £'000Revenue 447,446 260,940 107,393 815,779Depreciation, amortisation and impairment20,031 18,358 3,983 42,372Research and development expenditure 35,906 17,911 11,298 65,115Statutory operating profit 66,357 67,230 1,738 135,325Cost reduction programme 9,098 3,833 1,994 14,925Loss of office payable to an Executive Director1,244 416 320 1,980Closure of drug delivery business - - 666 666Adjusted operating profit 76,699 71,479 4,718 152,896Share of profits of joint ventures 432 3,608 - 4,040Net financial income - - - 11,018Adjusted profit before tax - - - 167,954 Year ended 30 June 2025 IndustrialMetrology£'000 PositionMeasurement£'000 SpecialisedTechnologies£'000 Total£'000Revenue 430,565 207,430 75,049 713,044Depreciation, amortisation and impairment22,768 8,219 4,759 35,746Research and development expenditure 41,480 17,766 9,664 68,910Statutory operating profit 74,130 46,010 (12,255) 107,885Closure of drug delivery business - - 2,059 2,059Closure of Edinburgh research facility 1,378 618 324 2,320Adjusted operating profit/(loss) 75,508 46,628 (9,872) 112,264Share of profits of joint ventures 488 3,050 - 3,538Net financial income - - - 11,429Adjusted profit before tax - - - 127,231 There is no allocation of assets and liabilities to the segments identified above. Depreciation, amortisation and impairments are allocated to segments on the basis of the level of activity, unless a specific adjustment relates to a segment. The following table shows the analysis of non-current assets, excluding deferred tax, derivatives and employee benefits, and reimbursement right by geographical region: 2026 2025 £'000 £'000UK 285,555 286,145APAC 35,687 38,797EMEA 91,051 86,445Americas 45,316 40,876
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Total non-current assets 457,609 452,263 No overseas country had non-current assets amounting to 10% or more of the Group's total non-current assets. The following table shows the disaggregation of Group revenue by category: 2026 2025 £'000 £'000Goods, capital equipment and installation 739,355 642,378Aftermarket services 76,424 70,666Total Group revenue 815,779 713,044 Aftermarket services include repairs, maintenance and servicing, programming, training, extended warranties, and software licences and maintenance. The Group's revenue by category includes £11.3m (2025: £19.2m) of forward currency contract gains. The analysis of revenue by geographical market was: 2026 2025 £'000 £'000 APAC 381,911 337,721 UK (country of domicile) 29,986 34,017 EMEA, excluding UK 184,871 173,751 EMEA 214,857 207,768 Americas 219,011 167,555 Total Group revenue 815,779 713,044 Revenue in the previous table has been allocated to regions based on the geographical location of the customer. Countries with individually significant revenue figures in the context of the Group were: 2026 2025 £'000 £'000China 220,106 186,495USA 192,912 142,860Germany 59,253 55,682Japan 50,964 49,273 There was no revenue from transactions with a single external customer which amounted to more than 10% of the Group's totalrevenue. 3. Employee costs The remuneration costs of our people account for a significant proportion of our total expenditure. The aggregate employee costs for the year were: 2026 2025 £'000 £'000Wages and salaries 262,976 247,070Compulsory social security contributions 33,129 30,514Contributions to defined contribution pension schemes 30,509 29,269Share-based payment charge 491 790Total payroll costs 327,105 307,643 Wages and salaries and compulsory social security contributions include £18.0m (2025: £11.1m) relating to performance bonuses, £16.1m (2025: £3.2m) relating to redundancy costs, and £2.0m (2025: £nil) relating to loss of office payable to an Executive Director. Redundancy costs include £14.9m (2025: £nil) related to the cost reduction programme, initiated in FY2025. The cost of the voluntary and compulsory redundancies have been recognised in FY2026 based on relevant accounting standards. The average number of people employed by the Group during the year was: 2026 2025 Number NumberUK 3,251 3,491Overseas 1,806 1,848 Average number of employees 5,057 5,339 Key management personnel have been assessed to be the Directors of the Company and the Senior Leadership Team (SLT), which was an average of 23 people (2025: 22 people). The total remuneration of the Directors and the SLT was: 2026 2025
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£'000 £'000 Short-term employee benefits 9,263 6,322 Post-employment benefits 521 489 Share-based payment charge 491 790 Total remuneration of key management personnel 10,275 7,601 Short-term employee benefits include £1.9m (2025: £0.8m) relating to performance bonuses payable in cash and £1.7m (2025: £nil) related to loss of office payable to an Executive Director (excluding employer social security contributions). The share-based payment charge relates to share awards granted in previous years, not yet vested. Shares equivalent to £2.3m (2025: £0.9m) are to be awarded in respect of FY2026. 4. Cost of sales Our cost of sales includes the costs to manufacture our products and our engineering spend on existing and new products, net of capitalisation and research and development tax credits. Accounting policy We receive both government grants and RDEC (tax credits) for research and development projects. For research projects, where the costs have not been capitalised, we recognise a deduction against expenditure within Cost of sales in the Consolidated income statement (having initially recognised the grant in the Consolidated balance sheet if it was received in advance of the related expense). Where a grant or RDEC is received for capitalised development costs, we initially recognise it in the Consolidated balance sheet and then release it to match the amortisation within Cost of sales. Both types are only recognised when we have reasonable assurance that any grant conditions will be met. Included in cost of sales are the following amounts: Adjustedtotal2026 Adjustingitems2026 Statutorytotal2026 Adjustedtotal2025 Adjustingitems2025 Statutorytotal2025 £'000 £'000 £'000 £'000 £'000 £'000Production costs 329,506 2,609 332,115 272,814 - 272,814Research and development expenditure61,622 3,493 65,115 68,910 - 68,910Other engineering expenditure 46,171 2,617 48,788 46,770 4,379 51,149Gross engineering expenditure107,793 6,110 113,903 115,680 4,379 120,059Development expenditure capitalised(net of amortisation) (5,441) - (5,441) (5,574) - (5,574) Development expenditure impaired3,804 - 3,804 1,818 - 1,818Development expenditure disposed- 916 916 - - -Research and development tax credit(5,239) - (5,239) (5,088) - (5,088)Total engineering costs 100,917 7,026 107,943 106,836 4,379 111,215Total cost of sales 430,423 9,635 440,058 379,650 4,379 384,029 Production costs include raw materials and components, labour, subcontractor costs, and allocated overheads associated with manufacturing our products. Research and development expenditure includes the payroll costs, material costs and allocated overheads attributed to projects identified as relating to new products or processes. Other engineering expenditure includes the payroll costs, material costs and allocated overheads attributed to projects identified as relating to existing products or processes. 5. Financial income and expenses Financial income mainly arises from bank interest on our deposits. We are exposed to realised currency gains and losses on translation of foreign currency denominated intragroup balances and offsetting financial instruments. Included in financial income and expenses are the following amounts: 2026 2025Financial income £'000 £'000 Bank interest receivable 9,419 11,741Currency gains 3,208 - Fair value gains from one-month forward currency contracts - 3,360 Interest on pension schemes' assets 552 503 Other interest income 2,450 913Total financial income 15,629 16,517Financial expenses
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Currency losses - 3,899 Fair value losses from one-month forward currency contracts 895 - Lease interest 617 685 Interest payable on amounts owed to joint ventures 282 371 Interest on pension schemes' liabilities 173 - Interest payable on borrowings 35 49Other interest payable 3,028 4,936 Total financial expenses 5,030 9,940 Currency losses relate to revaluations of foreign currency-denominated balances using latest reporting currency exchange rates. The gain recognised in FY2026 largely relates to a depreciation of Sterling relative to the US dollar, affecting US dollar-denominated intragroup balances in the Company. Rolling one-month forward currency contracts are used to offset currency movements on certain intragroup balances, with fair value gains and losses being recognised in financial income or expenses (see Note 25). The net currency movement of foreign currency- denominated balances and one-month forward currency contracts was a gain of £2.3m (2025: loss of £0.5m). Other interest income includes a credit of £2.5m (2025: £nil) and interest payable includes a charge of £2.9m (2025: £4.9m) for historical and non-recurring tax matters (see Note 7). 6. Profit before tax Detailed below are other notable amounts recognised in the Consolidated income statement. Included in the profit before tax are the following costs/(income): 2026 2025 notes £'000 £'000Depreciation and impairment of property, plant and equipment, right-of-use assets, andinvestment properties 9,10,11 33,719 29,057 Loss/(profit) on sale of property, plant and equipment 9 107 (1,083)Amortisation and impairment of intangible assets 12 8,653 6,689Loss on disposal of intangible assets 12 1,017 -Fair value gain on acquisition of subsidiary 30 (359) -Grant income - (2,001) (3,280) These costs/(income) can be found within cost of sales, distribution costs and administrative expenses in the Consolidated income statement. Further detail on each element can be found in the relevant notes. Costs within Administrative expenses relating to auditor fees are: 2026 2025 £'000 £'000Audit of these financial statements 985 899Audit of subsidiary undertakings pursuant to legislation 606 589Other assurance - -All other non-audit fees 46 33Total auditor fees 1,637 1,521 7. Taxation The Group tax charge is affected by our geographic mix of profits and other factors explained in this note. Our expected future tax charges and related tax assets are also set out in the deferred tax section, together with our view on whether we will be able to utilise the tax assets in the future. Accounting policy Tax on the profit for the year comprises current, deferred and global minimum taxes. Tax is recognised in the Consolidated income statement except to the extent that it relates to items recognised directly in Other comprehensive income, in which case it is recognised in the Consolidated statement of comprehensive income and expense. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in previous years. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: - the initial recognition of goodwill;
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- the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and - differences relating to investments in subsidiaries, to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to the extent it is probable that future taxable profits (including the future release of deferred tax liabilities) will be available, against which the deductible temporary differences can be used, based on management's assumptions relating to the amounts and timing of future taxable profits. Estimates of future profitability on an entity basis are required to ascertain whether it is probable that sufficient taxable profits will arise to support the recognition of deferred tax assets relating to the corresponding entity. Key judgement - Whether uncertain tax positions need to be recognised The Group is subject to a range of tax legislation that can vary by jurisdiction, and tax compliance for global businesses is increasingly complex. The objective of our tax strategy is to comply with all applicable tax laws and regulations in the territories that the Group operates in. However sometimes the tax treatment of transactions and events can be uncertain. Where this is the case, judgement is needed in how these uncertain tax treatments should be reflected in preparing the financial statements, particularly as such topics are often complex and can take several years to resolve. The nature and potential value of the issues under review were significant and were a key judgement for management. The following table shows an analysis of the tax charge: 2026 2025 £'000 £'000Current tax: UK corporation tax on profits for the year 15,022 7,550UK corporation tax - prior year adjustments (2,324) 2,778Overseas tax on profits for the year 18,612 16,018Overseas tax - prior year adjustments (376) 6,166Global minimum tax 803 757Total current tax 31,737 33,269Deferred tax: Origination and reversal of temporary differences (667) 2,077Prior year adjustments 81 (1,203)Derecognition of previously recognised tax losses and excess interest 202 323Recognition of previously unrecognised tax losses and excess interest (349) (223) (733) 974Tax charge on profit 31,004 34,243 The effective tax rate for the year is lower (2025: higher) than the UK standard rate of corporation tax of 25.0% (2025: 25.0%). The differences are principally due to differences in tax rates in overseas subsidiaries and prior year adjustments explained as follows: 2026 2025 £'000 £'000Profit before tax 149,964 118,000Tax at 25.0% (2025: 25.0%) 37,491 29,500Effects of: Different tax rates applicable in overseas subsidiaries (5,800) (4,648)Permanent differences 1,493 1,439Global minimum tax 803 757Companies with unrelieved tax losses 29 7Share of profits of joint ventures (1,010) (885)Tax incentives (7) (123)Prior year adjustments (2,619) 7,741Recognition of previously unrecognised tax losses and excess interest(349) (223)Derecognition of previously recognised tax losses and excess interest202 323Irrecoverable withholding tax 286 720Deferred tax on unremitted earnings 471 (425)Other differences 14 60Tax charge on profit 31,004 34,243Effective tax rate 20.7% 29.0% We operate in many countries around the world and the overall effective tax rate (ETR) is a result of the combination of the varying tax rates applicable throughout these countries. The FY2026 ETR has reduced mainly due to a prior year adjustment of £2.6m (2025: £7.7m charge) relating to historical and non-recurring tax matters. The tax matters relate to specific legacy arrangements which we would not expect to recur. Applicable accounting
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standards require a provision for tax and the associated interest of £5.3m, however, we continue to seek resolution to these matters which would reduce these amounts. The Group's future ETR largely depends on the geographic mix of profits and whether there are any changes to tax legislation in the Group's most significant countries of operations. The Finance (No 2) Bill 2023, that includes Pillar Two legislation, was substantively enacted on 20 June 2023 for IFRS purposes. The Pillar Two rules came into effect for accounting periods beginning on or after 1 January 2024. The rules continue to apply to the Group. The Group has accrued Global minimum tax of £0.8m (2025: £0.8m) in respect of Ireland. This is due to the statutory corporate income tax rate of 12.5% on trading income being lower than the global minimum tax rate of 15%. The impact on the effective tax rate of the Group was 0.5% for FY2026 (FY2025: 0.6%). The Group will continue to assess the future impact of Pillar Two based on the latest guidance and law changes of each jurisdiction in which it operates, to ensure compliance. Deferred tax assets and liabilities are offset where there is a legally enforceable right of offset and there is an intention to net settle the balances. After taking these offsets into account, the net position of £14.1m liability (2025: £16.4m liability) is presented as a £22.9m deferred tax asset (2025: £22.4m asset) and a £37.0m deferred tax liability (2025: £38.8m liability) in the Consolidated balance sheet. Where deferred tax assets are recognised, the Directors are of the opinion, based on recent and forecast trading, that the level of profits in current and future years make it more likely than not that these assets will be recovered. Deferred tax balances at the end of the year were: 2026 2025Assets Liabilities Net Assets Liabilities Net £'000 £'000 £'000 £'000 £'000 £'000Property, plant and equipment 1,023 (35,336) (34,313) 574 (33,086) (32,512)Intangible assets - (5,071) (5,071) - (4,655) (4,655)Intragroup trading (inventories) 20,470 - 20,470 16,262 - 16,262Intragroup trading (fixed assets) 1,143 - 1,143 1,129 - 1,129Defined benefit pensionschemes 5,671 (2,345) 3,326 6,128 (2,380) 3,748 Reimbursement right - (4,224) (4,224) - (3,744) (3,744)Derivatives - (2,036) (2,036) - (5,088) (5,088)Tax losses 1,156 - 1,156 1,545 - 1,545Other 7,110 (1,653) 5,457 7,663 (700) 6,963Balance at the end of the year 36,573 (50,665) (14,092) 33,301 (49,653) (16,352) Other deferred tax assets include temporary differences relating to inventory provisions totalling £2.4m (2025: £2.6m), other provisions (including bad debt provisions) of £1.2m (2025: £0.6m), and employee benefits relating to Renishaw plc £0.6m (2025: £1.0m) and Renishaw KK of £nil (2025: £0.7m), with the remaining balance relating to several other smaller temporary differences. The movements in the deferred tax balance during the year were: 2026£'000 2025£'000Balance at the beginning of the year (16,352) (13,233)Movements in relation to property, plant and equipment (1,801) (3,115)Movements in relation to intangible assets (416) (588)Movements in relation to intragroup trading (inventories) 4,208 1,115 Movements in relation to intragroup trading (fixed assets) 14 28 Movements in relation to defined benefit pension scheme assets/liabilities/reimbursementright 713 146 Movements in relation to tax losses (389) (278) Movement in relation to other (1,596) 1,718 Movements in the Consolidated income statement 733 (974) Movements in relation to the cash flow hedging reserve 3,052 (1,451) Movements in relation to the defined benefit pension schemeassets/liabilities/reimbursement right (1,615) (374) Movements in the Consolidated statement of comprehensive income and expense 1,437 (1,825) Currency adjustment 90 (320)Balance at the end of the year (14,092) (16,352) Deferred tax assets of £1.2m (2025: £1.5m) in respect of losses are recognised where it is considered likely that the business will generate sufficient future taxable profits. Deferred tax assets have not been recognised in respect of tax losses carried forward of £5.5m (2025: £5.0m), due to uncertainty over their offset against future taxable
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profits and therefore their recoverability. These unrecognised losses are held by Group companies in Brazil, the UAE and the USA, where there is no time limitation on their utilisation. In determining profit forecasts for each Group company, the key variable is the revenue forecast, which has been estimated using consistently applied external and internal data sources. Sensitivity analysis indicates that a reduction of 5% to relevant revenue forecasts would result in an impairment to deferred tax assets recognised in respect of losses and intragroup trading (inventories) of around £nil. An increase of 5% to relevant revenue forecasts would result in additions to deferred tax assets in respect of tax losses not recognised of around £0.3m. It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However, £88.0m (2025: £73.7m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed £6.0m (2025: £5.2m), of which £0.5m (2025: £nil) has been provided on the basis that the Group expects to remit these amounts. 8. Earnings per share Basic earnings per share is the amount of profit generated in a financial year attributable to equity shareholders, divided by the weighted average number of shares in issue during the year. 2026 2025Statutory profit after tax attributable to shareholders (£'000) 118,960 83,757Number of shares (72,788,543 allotted, called-up and fully paid ordinary shares) 72,757,446 72,734,797Basic earnings per share 163.5p 115.2pDiluted earnings per share 163.5p 115.2p The number of shares excludes 31,097 (2025: 53,746) shares held by the Employee Benefit Trust (EBT). On this basis, earnings per share (basic and diluted) is calculated as 163.5 pence (2025: 115.2 pence). There is no difference between the weighted average earnings per share and the basic and diluted earnings per share. For the calculation of adjusted earnings per share see Note 29. 9. Property, plant and equipment The Group makes significant investments in distribution and manufacturing infrastructure. During the year we have invested in our capital equipment to support manufacturing output and the rapid growth in our order book. Accounting policy Freehold land is not depreciated. Other assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is provided to write off the cost of assets less their estimated residual value on a straight-line basis over their estimated useful economic lives as follows: freehold buildings, 50 years; building infrastructure, 10 to 50 years; plant and equipment, 3 to 25 years; and vehicles, 3 to 4 years. Freehold Assets intheland and Plant and Motor course ofbuildings equipment vehicles construction TotalYear ended 30 June 2026 £'000 £'000 £'000 £'000 £'000Cost At 1 July 2025 274,628 309,054 5,962 34,539 624,183Additions 4,088 23,492 580 10,182 38,342Acquisition of a subsidiary 1,466 289 51 - 1,806Transfers 24,892 7,175 - (32,067) -Transfers to investment properties (14,090) (453) - - (14,543)Disposals (1,735) (31,057) (1,187) - (33,979)Currency adjustment 411 1,039 62 - 1,512At 30 June 2026 289,660 309,539 5,468 12,654 617,321Depreciation At 1 July 2025 53,790 227,715 4,391 - 285,896Charge for the year 5,463 17,563 446 - 23,472Acquisition of a subsidiary 134 276 38 - 448Impairment - 1,500 - - 1,500Transfers to investment properties (2,692) (322) - - (3,014)Disposals (170) (28,818) (999) - (29,987)Currency adjustment 369 668 22 - 1,059At 30 June 2026 56,894 218,582 3,898 - 279,374 Net book value At 30 June 2026 232,766 90,957 1,570 12,654 337,947At 30 June 2025 220,838 81,339 1,571 34,539 338,287 Loss on disposals of Property, plant and equipment amounted to £0.1m (2025: £1.1m profit).
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The Group has recognised an impairment of £1.5m (2025: £1.0m). This year's charge relates to tangible assets used in producing a new encoder product following a reprioritisation of resource, resulting from the significant increase in demand for our other encoder products. Additions to assets in the course of construction comprise £7.9m (2025: £11.2m) for land and buildings and £2.3m (2025: £4.2m) for plant and equipment. At 30 June 2026, properties with a net book value of £nil (2025: £48.7m) were subject to a fixed charge to secure the UK defined benefit pension scheme liabilities (see Note 23 for further information on the release of the charges). Transfers to investment properties of net book value £11.5m (2025: £1.8m) were made during the year (see Note 11). Freehold Assets intheland and Plant and Motor course ofbuildings equipment vehicles construction TotalYear ended 30 June 2025 £'000 £'000 £'000 £'000 £'000Cost At 1 July 2024 255,536 278,189 6,099 56,593 596,417Additions 6,374 23,258 1,220 15,421 46,273Transfers 19,032 18,443 - (37,475) -Transfers to investmentproperties (2,795) (597) - - (3,392) Disposals (725) (7,819) (1,206) - (9,750)Currency adjustment (2,794) (2,420) (151) - (5,365)At 30 June 2025 274,628 309,054 5,962 34,539 624,183DepreciationAt 1 July 2024 49,460 216,838 5,079 - 271,377Charge for the year 5,275 17,497 470 - 23,242Impairment 989 - - - 989Transfers to Investmentproperties (1,179) (439) - - (1,618) Disposals (270) (4,619) (1,057) - (5,946)Currency adjustment (485) (1,562) (101) - (2,148)At 30 June 2025 53,790 227,715 4,391 - 285,896 Net book valueAt 30 June 2025 220,838 81,339 1,571 34,539 338,287At 30 June 2024 206,076 61,351 1,020 56,593 325,040 10. Right-of-use assets The Group leases distribution properties, plant and equipment, and cars from third parties and recognises an associated right-of-use asset where we are afforded control and economic benefit from the use of the asset. Accounting policy At the commencement date of a lease arrangement the Group recognises a right-of-use asset for the leased item and a lease liability for any payments due. Right-of-use assets are initially measured at cost, being the present value of the lease liability plus any initial costs incurred in entering the lease and less any incentives received. See Note 21 for further detail on lease liabilities. Right-of-use assets are subsequently depreciated on a straight-line basis from the commencement date to the earlier of the end of the useful life or the end of the lease term. Leaseholdproperty Plant andequipment Motorvehicles Total Year ended 30 June 2026 £'000 £'000 £'000 £'000 Net book valueAt 1 July 2025 8,653 74 3,491 12,218Additions 564 7 2,870 3,441Depreciation (2,316) (39) (2,642) (4,997)Currency adjustment 256 1 47 304 At 30 June 2026 7,157 43 3,766 10,966 Leaseholdproperty Plant andequipment Motorvehicles Total Year ended 30 June 2025 £'000 £'000 £'000 £'000 Net book valueAt 1 July 2024 9,899 66 4,781 14,746Additions 1,746 49 841 2,636Reductions - - (12) (12)Depreciation (2,541) (43) (2,049) (4,633)Currency adjustment (451) 2 (70) (519)
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At 30 June 2025 8,653 74 3,491 12,218 11. Investment properties The Group's investment properties consist of properties in India, Ireland, Slovenia, Spain, Switzerland and the UK, which are occupied by rent-paying third parties. During the year, we have transferred properties from Property, plant and equipment to Investment properties following a change in use in Slovenia, Spain and the UK. Accounting policy Where property owned by the Group is held to earn rentals or for long-term capital growth it is recognised as investment property. Where a property is part-occupied by the Group, portions of the property are recognised as investment property if they meet the above description and if these portions could be sold separately and reliably measured. If the portions could not be sold separately, the property is recognised as an investment property only if a significant proportion is held for rental or appreciation purposes. The Group has elected to value investment properties on a cost basis, initially comprising of the purchase price and any directly attributable expenditure. Depreciation is provided to write off the cost of assets on a straight-line basis over their estimated useful economic lives, being 50 years. Amounts relating to freehold land are not depreciated. 2026 2025 £'000 £'000 Cost Balance at the beginning of the year 15,211 12,103 Transfers from Property, plant and equipment 14,543 3,392Acquisition of a subsidiary 350 - Currency adjustment (109) (284) Balance at the end of the year 29,995 15,211Depreciation Balance at the beginning of the year 3,645 1,818Charge for the year 247 193 Transfers from Property, plant and equipment 3,014 1,618 Impairment 3,503 - Currency adjustment 3 16 Balance at the end of the year 10,412 3,645 Net book value 19,583 11,566 The Group has recognised impairments of £3.5m (2025: £nil) following a market value assessment of properties in Slovenia and the UK. The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties. Amounts recognised in the Consolidated income statement relating to investment properties: 2026 2025 £'000 £'000 Rental income 1,249 945 Direct operating expenses (including repairs and maintenance) (334) (218) Profit 915 727 The fair value of the Group's investment properties totalled £27.8m at 30 June 2026 (2025: £18.4m). Fair values of each investment property have been determined within the last three years by independent valuers who hold recognised and relevant professional qualifications and have recent experience in the location and category of each investment property being valued. These valuations have been assessed to be materially appropriate at 30 June 2026. 12. Intangible assets Our Consolidated balance sheet contains significant intangible assets, mainly goodwill (which arises when we acquire a business and pay a higher amount than the fair value of its net assets) and capitalised development
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costs. We make significant investments in the development of new products, a key part of our business model, and some of these costs are initially capitalised and then written off over the lifetime of future sales of that product. Accounting policy Goodwill arising on acquisition represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired, net of deferred tax. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. Goodwill is stated at cost less any accumulated impairment losses. It is not amortised but is tested annually for impairment or earlier if there are any indications of impairment. The annual impairment review involves comparing the carrying amount to the estimated recoverable amount and recognising an impairment loss if the recoverable amount is lower. Impairment losses are recognised in the Consolidated income statement. Intangible assets such as customer lists, patents, trademarks, know-how and intellectual property that are acquired by the Group are stated at cost less amortisation and impairment losses. Amortisation is charged to the Consolidated income statement on a straight-line basis over the estimated useful lives of the intangible assets. The estimated useful lives of the intangible assets included in the Consolidated balance sheet reflect the benefit derived by the Group and vary from five to 10 years. Expenditure on research activities is recognised in the Consolidated income statement as an expense as incurred. Expenditure on development activities is capitalised if: the product or process is technically and commercially feasible; the Group intends and has the technical ability and sufficient resources to complete development; future economic benefits are probable; and the Group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in the Consolidated income statement as an expense as incurred. Capitalised development expenditure is amortised over the useful economic life appropriate to each product or process, ranging from five to 10 years, and is stated at cost less accumulated amortisation and less accumulated impairment losses. Amortisation commences when a product or process is available for use as intended by management. Capitalised development expenditure is removed from the balance sheet 10 years after being fully amortised. All non-current assets are tested for impairment whenever there is an indication that their carrying value may be impaired. An impairment loss is recognised in the Consolidated income statement to the extent that an asset's carrying value exceeds its recoverable amount, which represents the higher of the asset's fair value less costs to sell and its value-in-use. An asset's value-in-use represents the present value of the future cash flows expected to be derived from the asset or from the cash generating unit to which it relates. The present value is calculated using a discount rate that reflects the current market assessment of the time value of money and the risks specific to the asset concerned. Goodwill and capitalised development costs are subject to an annual impairment test. Key judgement - Whether a project meets the criteria for capitalisation Product development costs are capitalised once a project has reached a certain stage of development, being the point at which the product has passed testing to demonstrate it meets the technical specifications of the project and it satisfies all applicable regulations. Judgement is required to assess whether the new product development has reached the appropriate point for capitalisation of costs to begin. These costs are subsequently amortised over their useful economic life once ready for use. Should a product become obsolete, the accumulated capitalised development costs would need to be immediately written off in the Consolidated income statement. Key estimate - Estimates of future cash flows used for impairment testing. Determining whether goodwill and capitalised development costs are impaired requires an estimation of the value- in-use of cash-generating units (CGUs) to which goodwill has been allocated. To calculate the value-in-use we need to estimate the future cash flows of each CGU and select the appropriate discount rate for each CGU.
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Goodwill Internallygenerateddevelopmentcosts Softwarelicences Intellectualproperty andotherintangibleassets Total Year ended 30 June 2026 £'000 £'000 £'000 £'000 £'000CostAt 1 July 2025 19,882 189,572 12,505 4,879 226,838Additions 1,095 9,896 7 43 11,041Disposals - (19,038) (3,637) - (22,675)Currency adjustment 278 - (40) 6 244At 30 June 2026 21,255 180,430 8,835 4,928 215,448Amortisation At 1 July 2025 9,028 152,407 11,956 2,897 176,288Charge for the year - 4,455 179 215 4,849Impairment - 3,804 - - 3,804Disposals - (18,122) (3,536) - (21,658)Currency adjustment - - (41) (18) (59)At 30 June 2026 9,028 142,544 8,558 3,094 163,224Net book value At 30 June 2026 12,227 37,886 277 1,834 52,224At 30 June 2025 10,854 37,165 549 1,982 50,550Goodwill Internallygenerateddevelopmentcosts Softwarelicences Intellectualproperty andotherintangibleassets Total Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000CostAt 1 July 2024 20,258 187,941 12,197 4,864 225,260Additions - 9,999 286 - 10,285Disposals - (8,368) - - (8,368)Currency adjustment (376) - 22 15 (339)At 30 June 2025 19,882 189,572 12,505 4,879 226,838AmortisationAt 1 July 2024 9,028 154,531 11,751 2,607 177,917Charge for the year - 4,426 191 254 4,871Impairment - 1,818 - - 1,818Disposals - (8,368) - - (8,368)Currency adjustment - - 14 36 50At 30 June 2025 9,028 152,407 11,956 2,897 176,288Net Book valueAt 30 June 2025 10,854 37,165 549 1,982 50,550At 30 June 2024 11,230 33,410 446 2,257 47,343 Goodwill Goodwill has arisen on the acquisition of several businesses and has an indeterminable useful life. It is therefore not amortised but is instead tested for impairment annually and at any point during the year when an indicator of impairment exists. During the year, the Group acquired the remaining 30% of Metrology Software Products Limited (MSP) increasing its ownership percentage to 100%. The acquisition resulted in goodwill of £1.1m being recognised (see Note 30 for more information on the business combination). In FY2026, the Group has reorganised into three new segments (see Note 2). In accordance with IAS 36.87, goodwill has been reallocated to the revised cash-generating units (CGUs) that are expected to benefit from the business combination in which the goodwill arose. The CGUs used for goodwill impairment testing have been reallocated to the product lines, namely Industrial Metrology (IM), Position Measurement (PM), Additive manufacturing (AM), Spectroscopy (SPD) and Neurological (NPD), as set out below. The reallocation was performed using a relative value approach, consistent with IAS 36. The product lines represent the lowest level at which goodwill is monitored for internal management purposes and are not larger than our segments before aggregation. The reallocation of goodwill is not a change in accounting policy under IAS 8, with no retrospective impairment test performed. The analysis of goodwill according to CGU is: 2026 2025 £'000 £'000 Industrial Metrology (IM) 10,008 n/a Neurological (NPD) 2,219 n/a Total goodwill 12,227 10,854
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Goodwill has arisen principally on the acquisitions of Renishaw Fixturing Solutions, LLC (IM), itp GmbH (IM), Renishaw Mayfield SARL (NPD) and Metrology Software Products Limited (IM). The recoverable amounts of acquired goodwill are based on value-in-use calculations. These calculations use cash flow projections based on the financial business plans approved by management for the next five financial years. The cash flows beyond this forecast are extrapolated to perpetuity using a nil growth rate on a prudent basis, to reflect the uncertainties over forecasting beyond five years. The following pre-tax discount rates have been used in discounting the projected cash flows: 2026 2026 2025 2025 CGU Discountrate Long-termgrowth rate Discount rate Long-termgrowth rate Industrial Metrology (IM) 15.8% 0.0% n/a n/a Neurological (NPD) 22.4% 0.0% n/a n/a The Group's post-tax weighted average cost of capital, calculated at 30 June 2026, is 12.1% (2025: 11.6%). Pre- tax discount rates for the IM CGU are calculated from this basis, given that they are aligned with the wider Group's industries, markets and processes. The NPD CGU has a higher risk weighting, reflecting the less mature nature of this product group. CGU specific five-year business plans have been used in determining cash flow projections. Within these plans, revenue forecasts are calculated with reference to external market data, past performance, and new product launches, consistent with revenue forecasts across the Group. Production costs, engineering costs, distribution costs and administrative expenses are calculated based on management's best estimates of what is required to support revenue growth and new product development. Estimates of capital expenditure and working capital requirements are also included in the cash flow projections. The key estimate within these business plans is the forecast revenue growth, given that the cost bases of the businesses can be flexed in line with revenue performance. Given the average revenue growth assumptions included in the five-year business plans, management's sensitivity analysis involves modelling a reduction in the forecast cash flows utilised in those business plans and therefore into perpetuity. For there to be an impairment in the IM or NPD CGUs, the pre-tax discount rate would need to increase to at least 727% and 40% respectively, or there would need to be a reduction to forecast cash flows of 98% and 50% respectively. Internally generated development costs The key assumption in determining the value-in-use for internally generated development costs is the forecast unit sales over the useful economic life, which is determined by management using their knowledge and experience with similar products and the sales history of products already available in the market. Resulting cash flow projections over five to 10 years, the periods over which product demand forecasts can be reasonably predicted and internally generated development costs are written off, are discounted using pre-tax discount rates, which are calculated from the Group post-tax weighted average cost of capital of 12.1% (2025: 11.6%). There were impairments of internally generated development costs in the year of £3.8m (2025: £1.8m). This includes a £3.7m impairment of a new encoder product following a reprioritisation of resource, resulting from the significant increase in demand for our other encoder products. In addition, there was a £0.9m loss on disposal of the drug delivery intangible asset, following the decision to close the drug delivery business. For the largest projects, comprising 98% of the net book value at 30 June 2026, a 10% reduction to forecast unit sales, or an increase in the discount rate by 1%, would not result in an impairment. 13. Investments in joint ventures Where we make an investment in a company which gives us joint control but not full control, we account for our share of their post-tax profits in our financial statements. We have one remaining joint venture arrangement, RLS, following the acquisition of the remaining 30% interest in MSP.
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The Group's investments in joint ventures (all investments being in the ordinary share capital of the joint ventures), whose accounting years end on 30 June, were: Country ofincorporation andprincipal place ofbusiness 2026Ownership% 2025Ownership% RLS Merilna tehnika d.o.o. (RLS) - joint venture Slovenia 50.0 50.0 Metrology Software Products Limited (MSP) - joint ventureEngland & Wales 100.0 70.0 During the year, the Company acquired the remaining 30% of MSP, increasing its ownership percentage to 100%. In accordance with IFRS 10, the control requirements have now been met and MSP has been consolidated in the Group's financial statements as at 30 June 2026; see Note 30 for more information on the business combination. Movements during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year 27,692 25,485 Dividends received (957) (1,500) Share of profits of joint ventures 4,040 3,538 Acquisition of subsidiary (4,840) - Currency adjustment 190 169 Balance at the end of the year 26,125 27,692 Renishaw International Limited (RIL) has a 14-day notice deposit agreement with RLS. Interest is payable by RIL to RLS at a market rate on a monthly basis. Under this agreement, RIL held EUR 18.5m (£15.9m equivalent) as at 30 June 2026 (2025: £14.5m). The amount is recognised as 'Amounts payable to joint venture' in the Consolidated balance sheet. Summarised financial information for joint ventures: RLS MSP 2026 2025 2026 2025 £'000 £'000 £'000 £'000 Assets 58,795 52,093 - 6,258 Liabilities (6,546) (5,526) - (532) Net assets 52,249 46,567 - 5,726 Group's share of net assets 26,125 23,284 - 4,008 Revenue 44,885 38,045 3,431 3,389 Profit for the year 7,216 6,100 617 697 Group's share of profit for the year 3,608 3,050 432 488 The financial statements of RLS have been prepared on the basis of Slovenian Accounting Standards. The financial statements of MSP have been prepared on the basis of FRS 102. 14. Leases (as lessor) The Group acts as a lessor for Renishaw-manufactured equipment on finance and operating lease arrangements. This is mainly for high-value capital equipment such as our additive manufacturing machines. Accounting policy Where the Group transfers the risks and rewards of ownership of lease assets to a third party, the Group recognises a receivable in the amount of the net investment in the lease. The lease receivable is subsequently reduced by the principal received, while an interest component is recognised as financial income in the Consolidated income statement. Standard contract terms are up to five years and there is a nominal residual value receivable at the end of the contract. Where the Group retains the risks and rewards of ownership of lease assets, it continues to recognise the leased asset in Property, plant and equipment. Income from operating leases is recognised on a straight-line basis over the lease term and recognised as revenue, rather than other revenue, as such income is not material. Operating leases are on one to five year terms.
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The total future lease payments are split between the principal and interest amounts below: 2026 2025 Grossinvestment£'000 Interest£'000 Netinvestment£'000 Grossinvestment£'000 Interest£'000 Netinvestment£'000 Receivable in less than one year 8,253 1,066 7,187 6,027 832 5,195Receivable between one and two years7,812 951 6,861 5,416 572 4,844Receivable between two and three years3,689 271 3,418 4,120 317 3,803Receivable between three and four years417 16 401 2,669 154 2,515Receivable between four and five years87 3 84 803 15 788Total future minimum lease payments receivable 20,258 2,307 17,951 19,035 1,890 17,145 Finance lease receivables are presented as £10.8m (2025: £11.9m) non-current assets and £7.2m (2025: £5.2m) current assets in the Consolidated balance sheet. The total of future minimum lease payments receivable under non-cancellable operating leases were: 2026 2025 £'000 £'000Receivable in less than one year 1,508 1,138Receivable in more than one year 2,580 1,323Total future minimum lease payments receivable 4,088 2,461 During the year, £1.3m (2025: £1.4m) of operating lease income was recognised in revenue. 15. Cash and cash equivalents and bank deposits We have always valued having cash in the bank to protect the Group from downturns and enable us to react swiftly to investment or market capture opportunities. We currently hold significant cash and cash equivalents and bank deposits, mostly in the UK and spread across several banks with high credit ratings. Accounting policy Cash and cash equivalents comprise cash balances, and deposits with an original maturity of less than three months or with an original maturity date of more than three months where the deposit can be accessed on demand without significant penalty for early withdrawal and where the original deposit amount is recoverable in full. Cash and cash equivalents An analysis of cash and cash equivalents at the end of the year was: 2026 2025 £'000 £'000Bank balances and cash in hand 148,092 87,138Short-term deposits 209 282Balance at the end of the year 148,301 87,420 Bank deposits Bank deposits at the end of the year amounted to £142.7m (2025: £186.2m), of which £22.0m matures in July 2026, £1.8m in August 2026, £26.0m in September 2026, £1.8m in October 2026, £50.0m in December 2026, £20.0m in January 2027, £1.0m in February 2027 and £20.0m in March 2027. During the year bank deposits of £186.2m matured, of which £60.0m in July 2025, £20.0m in September 2025, £65.0m in December 2025 and £30.0m in May 2026. 16. Inventories We increased our inventories during the year to support rapid growth in orders, and remain committed to high customer delivery performance. Accounting policy Inventory and work in progress is valued at the lower of actual cost on a first-in, first-out (FIFO) basis and net realisable value. In respect of work in progress and finished goods, cost includes all production overheads and the attributable proportion of indirect overhead expenses that are required to bring inventories to their present location
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and condition. Overheads are absorbed into inventories on the basis of normal capacity or on actual hours if higher. Key estimate - Determination of net realisable inventory value Determining the net realisable value of inventory requires management to estimate future demand, especially in respect of provisioning for slow-moving and potentially obsolete inventory. When calculating an inventory provision, management generates an estimate of future demand for individual inventory items (capped at 3 years) based upon the higher of 12 months of historical usage or 12 months of demand from customer orders and manufacturing build plans. A 50% provision is calculated where actual holdings represent between 3 to 5 years' worth of future demand, and 100% is calculated where actual holdings represent over 5 years' worth of future demand. Adjustments are made where needed, for example where it is highly likely that there will be an increase in sales beyond the 12-month demand period or where there are obsolescence programmes. An analysis of inventories at the end of the year was: 2026 2025 £'000 £'000Raw materials 62,440 56,911Work in progress 37,758 31,623Finished goods 81,545 70,931Balance at the end of the year 181,743 159,465 At the end of the year, the gross cost of inventories which had provisions held against them totalled £27.4m (2025: £29.4m). During the year, the amount of write-down of inventories recognised as an expense in the Consolidated income statement was £0.1m (2025: £1.0m). Inventories in Renishaw plc account for 61% (2025: 61%) of the total Inventories of the Group. A 10% reduction in the estimate of future demand for all Renishaw plc inventory items would result in an increase in the inventory provision of £0.3m (2025: £0.4m). 17. Provisions A provision is a liability recorded in the Consolidated balance sheet, where there is uncertainty over the timing or amount that will be paid. Accounting policy Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The Group provides a warranty from the date of purchase, except for those products that are installed by the Group where the warranty starts from the date of completion of the installation. This is typically for a 12-month period, although up to three years is given for a small number of products. A warranty provision is calculated on the basis of historical returns and internal quality reports and is included in the Group financial statements. Warranty provision and other provision movements during the year were: Warranty Other 2026 2025 2026 2025 £'000 £'000 £'000 £'000 Balance at the beginning of the year 2,826 2,997 6,152 - Created during the year 2,783 3,281 3,505 6,152 Unused amounts reversed - (924) (2,450) - Utilised in the year (1,928) (2,528) (1,300) - 855 (171) (245) 6,152 Balance at the end of the year 3,681 2,826 5,907 6,152 The warranty provision has been calculated on the basis of historical return-in-warranty information and other internal reports. It is expected that most of this expenditure will be incurred in the next financial year and all
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expenditure will be incurred within three years of the balance sheet date. Other provisions comprises interest payable liabilities of £5.3m (2025: £4.9m) for historical and non-recurring tax matters (see Note 7 for further details) and other provisions of £0.6m (2025: £1.3m). The £1.3m onerous contract provision recognised in FY2025 has been fully utilised. 18. Contract liabilities Contract liabilities represent the Group's obligation to transfer goods, capital equipment and/or services to a customer for which the Group has either received consideration or consideration is due from the customer. Our balances mostly comprise advances received from customers and payments for services yet to be completed. Balances at the end of the year were: 2026 2025 £'000 £'000 Goods, capital equipment and installation 2,087 813 Aftermarket services 9,405 8,251 Deferred revenue 11,492 9,064 Advances received from customers 14,819 5,605 Balance at the end of the year 26,311 14,669 The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied at the end of the year is £23.2m (2025: £14.7m). Of this, £1.7m (2025: £1.5m) is not expected to be recognised in the next financial year. 19. Other payables Separate from our trade payables and contract liabilities, which directly relate to our trading activities, our Other payables mostly comprises amounts payable to employees, or relating to employees, and payroll taxes and social security. Balances at the end of the year were: 2026 2025 £'000 £'000Payroll taxes and social security 7,905 7,484Performance bonuses 18,055 11,047Holiday pay and retirement accruals 5,792 11,091Indirect tax payable 6,548 5,278Deferred research and development tax credit ('RDEC') 2,473 1,131Tariff refund payable 5,680 -Other creditors and accruals 21,547 21,101Total other payables 68,000 57,132 Holiday pay accruals are based on a calculation of the number of days' holiday earned during the year, but not yet taken. Deferred research and development tax credit relates to amounts received for capitalised development costs which cannot be recognised (see Note 4). Certain retirement accruals have been transferred to Employee benefits (see Note 23). Other creditors and accruals includes a number of other individually smaller accruals. 20. Borrowings The Group's only source of external borrowing is a fixed-interest loan facility entered into to directly finance the purchase of a distribution facility in Japan in FY2019. Third-party borrowings at 30 June 2026 consist of a loan entered into on 31 May 2019 by Renishaw KK, with original principal of JPY 1,447m (£10.5m). Principal of JPY 12m is repayable each month, with a fixed interest rate of 0.81% also paid on monthly accretion for the first five years. This loan was extended for an additional five years in May 2024, with a fixed interest rate of 1.41% payable for the remaining term, at which time the principal will have been repaid in full. There are no covenants attached to this loan. Movements during the year were: 2026 2025 £'000 £'000Balance at the beginning of the year 2,884 3,522
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Interest 35 49Repayments (731) (794)Currency adjustment (202) 107Balance at the end of the year 1,986 2,884 Borrowings are held at amortised cost. There is no significant difference between the book value and fair value of borrowings. This is estimated by discounting contractual future cash flows, which represents level 2 of the fair value hierarchy defined in Note 25. 21. Leases (as lessee) The Group leases distribution properties and cars from third parties and recognises an associated lease liability for the total present value of payments to which the lease contracts commit us to. Accounting policy At the commencement date of a lease arrangement the Group recognises a right-of-use asset for the leased item and a lease liability for the value of lease payments to be made over the lease term. Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the applicable entity. The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured if there is a change in future lease payments arising from a change in an index or rate (such as an inflation-linked increase), or if there is a change in the Group's assessment of whether it will exercise an extension or termination option. When this happens, there is a corresponding adjustment to the right-of-use asset. Where the Group enters into leases with a lease term of 12- months or less, these are treated as 'short-term' leases and are recognised on a straight-line basis as an expense in the Consolidated income statement. The same treatment applies to low-value assets, which are typically IT equipment and office equipment. Undiscounted future lease liabilities are analysed as below: 2026 Leaseholdproperty£'000 Plant andequipment£'000 Motorvehicles£'000 Total£'000Due in less than one year 2,431 18 2,259 4,708 Due between one and two years 1,913 13 1,218 3,144 Due between two and three years 1,220 11 495 1,726 Due between three and four years 219 4 159 382 Due between four and five years 104 - 6 110 Due in more than five years 4,275 - - 4,275 Total future minimum lease payments payable10,162 46 4,137 14,345 Effect of discounting (2,611) (2) (214) (2,827) Lease liability 7,551 44 3,923 11,518 2025 Leaseholdproperty£'000 Plant andequipment£'000 Motorvehicles£'000 Total£'000 Due in less than one year 2,490 34 1,985 4,509 Due between one and two years 2,110 18 1,303 3,431 Due between two and three years 1,667 12 501 2,180 Due between three and four years 1,135 11 80 1,226 Due between four and five years 182 4 2 188 Due in more than five years 4,358 - - 4,358 Total future minimum lease payments payable11,942 79 3,871 15,892 Effect of discounting (2,916) (4) (211) (3,131) Lease liability 9,026 75 3,660 12,761 Lease liabilities are also presented as a £4.3m (2025: £4.0m) current liability and a £7.2m (2025: £8.8m) non- current liability in the Consolidated balance sheet. Amounts recognised in the Consolidated income statement relating to leases were: 2026 2025 £'000 £'000 Depreciation of right-of-use assets 4,997 4,633 Interest expense on lease liabilities 617 685 Expenses relating to short-term and low-value leases 76 395
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Total expense recognised in the Consolidated income statement 5,690 5,713 Total cash outflows for leases 5,653 5,364 22. Changes in liabilities arising from financing activities £'000 1 July 2025 Cash flows Other Currency 30 June 2026 Lease liabilities 12,761 (4,960) 3,388 329 11,518 Borrowings 2,884 (731) 35 (202) 1,986 Amounts payable to joint venture 14,530 1,022 282 114 15,948 30,175 (4,669) 3,705 241 29,452 £'000 1 July 2024 Cash flows Other Currency 30 June 2025 Lease liabilities 15,022 (4,284) 2,564 (541) 12,761 Borrowings 3,522 (794) 49 107 2,884 Amounts payable to joint venture 8,475 5,612 371 72 14,530 27,019 534 2,984 (362) 30,175 See Notes 20, 21 and 13 for further details on borrowings, leasing activities and amounts payable to joint venture. 23. Employee benefits The Group operates a number of retirement benefit schemes for its employees, including both defined benefit and defined contribution. The Group's three principal contributory pension schemes are in the UK, Ireland and Germany. The three schemes represent 93% and 96% of liabilities and assets, including reimbursement right, respectively. Accounting policy Defined benefit pension schemes are managed by trustees who are independent of the Group. Investment assets of the schemes are measured at fair value using the bid price of the unitised investments, quoted by the investment manager, at the reporting date. For buy-in insurance contracts, where the income received from a policy matches exactly the benefit payments due to the members it is covering, the value attributable to the contract to be recognised as an asset is the equivalent IAS 19 value of the corresponding liabilities. Reimbursement assets are measured at fair value, quoted by the insurance company, at the reporting date. Reimbursement assets are not classified as a plan asset as they are not a qualifying insurance policy. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability. Remeasurements arising from defined benefit schemes comprise actuarial gains and losses, the return on scheme assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Company recognises them immediately in Other comprehensive income and all other expenses related to defined benefit schemes are included in the Consolidated income statement. The pension schemes' surpluses, to the extent that they are considered recoverable, or deficits are recognised in full and presented on the face of the Consolidated balance sheet under Employee benefits. Where a guarantee is in place in relation to a pension scheme deficit, liabilities are reported in accordance with IFRIC 14 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction'. To the extent that contributions payable will not be available as a refund after they are paid into the plan, a liability is recognised at the point the obligation arises, which is the point at which the minimum funding guarantee is agreed. Overseas-based employees are covered by a combination of state, defined benefit and private pension schemes in their countries of residence. For defined contribution schemes, the amount charged to the Consolidated income statement represents the contributions payable to the schemes in respect of the accounting period. Key estimate - Valuation of defined benefit pension schemes' liabilities Determining the value of the future defined benefit obligation requires estimation in respect of the assumptions used to determine the present values. These include future mortality, discount rate and inflation. Management
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makes these estimates in consultation with independent actuaries. Key judgement - Whether past service costs need to be recognised Management also need to determine the appropriate accounting treatment for past service costs, and do so in consultation with independent legal advisers and actuaries. Defined contribution schemes The total pension cost of the Group for the year was £30.5m (2025: £29.3m), of which £0.1m (2025: £0.1m) related to Directors and £6.9m (2025: £6.2m) related to overseas schemes. The Renishaw pension fund The Renishaw pension fund (UK scheme) was closed to new members on 5 April 2007, at which time the scheme ceased any future accrual for existing members. At 30 June 2026, the UK scheme was in a net surplus position of £6.6m (2025: surplus £7.6m), and is therefore presented in non-current assets in the Consolidated balance sheet. The Trust Deed and Rules allow the UK scheme to recognise an unconditional right to a refund of any surplus. The Trustees of the UK scheme previously undertook a buy-in and insured around 99% of the UK scheme's liabilities by purchasing an insurance policy. This contract was effective from 19 October 2023 and is held in the name of the Trustee. The value of the contract is recognised as a UK scheme asset for the purposes of IAS 19. In line with IAS 19.115, for a buy-in insurance contract such as this, the income received from the policy matches exactly the benefit payments due to the members it is covering, the value attributable to the contract to be recognised as an asset is the equivalent IAS 19 value of the corresponding liabilities. The latest full actuarial valuation of the UK scheme was carried out as at 30 September 2024 and updated to 30 June 2026 by a qualified independent actuary. The latest full actuarial report prepared in September 2024 showed a surplus of £3.2m, which is based on funding to self-sufficiency and uses prudent assumptions. IAS 19 requires best estimate assumptions to be used, resulting in the IAS 19 net surplus being higher than the actuarial surplus. The previous deficit funding plan for the UK scheme has ended, as the actuarial deficit (calculated on a self- sufficiency basis) has been eliminated. The net book value of properties subject to fixed charges under this agreement at 30 June 2026 was £nil (2025: £48.7m). The charge was released on 5 January 2026, following completion of the latest full actuarial valuation for the period ending 30 September 2024. The Renishaw (Ireland) Limited pension fund The Renishaw (Ireland) Limited pension fund (Ireland scheme) was closed to new members on 31 December 2007, at which time the scheme ceased any future accrual for existing members. At 30 June 2026, the Ireland scheme was in a net asset position of £5.5m (2025: £3.8m), and is therefore presented in non-current assets. The rules of the Ireland scheme do not restrict the recognition of any surplus. Under the Ireland defined benefit pension scheme deficit funding plan, a property owned by Renishaw Ireland (DAC) is subject to a registered fixed charge to secure the Ireland defined benefit pension scheme's deficit. The Renishaw GmbH pension fund
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The Renishaw GmbH pension fund (Germany scheme) was closed to new members on 30 June 2012. The scheme is open to future accrual for existing members. At 30 June 2026, the Germany scheme had an actuarial value for liabilities of £14.6m (2025: £21.1m), which is presented gross in non-current liabilities. The Germany scheme does not have any plan assets, rather a reimbursement right asset of £14.6m (2025: £12.9m) which is separately disclosed in the Consolidated balance sheet in assets. The Germany scheme presented a surplus of £0.3m (2025: £8.2m deficit) before an asset ceiling adjustment recognised to restrict the reimbursement right asset. Other plans Other plans of the Group include various pension plans, other post-employment and long-term employee benefit plans in several countries of operation. Some of the plans are funded, with assets backing the obligations, whilst others are operated on an unfunded basis. The benefits provided, the approach to funding and the legal basis of the plans reflect their local territories. The results of the most recent actuarial valuations for the various plans have been updated to 30 June 2026 to determine the amounts to be included in the Group's consolidated financial statements. Assumptions Major assumptions used by actuaries for the UK, Ireland and Germany schemes were: 30 June 2026 30 June 2025 UKscheme Irelandscheme Germanyscheme UKscheme Irelandscheme GermanyschemeDiscount rate 5.90% 4.30% 4.40% 5.55% 4.00% 3.90%Rate of increase in pensionpayments 2.85% 2.25% 2.30% 2.85% 2.25% 2.00% Rate of increase in salary n/a n/a 2.80% n/a n/a 2.50% Inflation rate (RPI) 3.05% 2.25% n/a 3.05% 2.25% n/a Inflation rate (CPI) 2.05%1 2.05%1 3.05%2 2.25% 2.30% 3.05%2 2.25% 2.00% Retirement age 65 65 67 65 65 67 Scheme duration 14 22 17 15 22 19 1. Pre-2030 2. Post-2030 The life expectancies from the retirement age for these schemes implied by the mortality assumption at age 65 and 45 are: 30 June 2026 30 June 2025 UKscheme Irelandscheme Germanyscheme UKscheme Irelandscheme GermanyschemeMale currently aged 65 22.3 21.7 n/a 21.1 21.0 n/a Female currently aged 65 24.5 24.0 n/a 23.5 23.5 n/a Male currently aged 45 23.0 22.7 n/a 21.8 21.9 n/a Female currently aged 45 25.3 25.1 n/a 24.4 24.6 n/a For the UK scheme, the mortality assumption used for FY2026 is the SAPS4 base tables and CMI 2025 model, with long-term improvements of 1% per annum. Adjustments have been made to both the core base tables and CMI 2025 model to allow for the scheme's membership profile and best estimate assumptions of future mortality improvements. Assets and liabilities recognised in the Consolidated balance sheet The assets and liabilities in the defined benefit schemes were: 30 June 2026£'000 % of totalassets 30 June 2025£'000 % of totalassets Market value of assets: Insurance contract 127,680 81 118,158 83
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Index-linked gilts 8,709 6 5,815 4 Credit and fixed income funds 7,635 5 7,924 6 Equities 5,614 4 4,295 3 Multi-asset funds 4,582 3 4,640 3 Cash and other 3,712 1 781 1 157,932 100 141,613 100 Actuarial value of liabilities (166,005) - (151,301) - Deficit in the schemes (8,073) - (9,688) - Deferred tax thereon 3,326 - 3,748 - The reimbursement right asset is not classified as a plan asset as it is not a qualifying insurance policy. It is not included in the table above. Equities are held in externally-managed funds and primarily relate to UK and US equities. Credit and fixed income funds, and index-linked gilts, relate to UK, US and Eurozone government-linked securities, again held in externally-managed funds. The fair values of these equity and fixed income instruments are determined using the bid price of the unitised investments, quoted by the investment manager, at the reporting date and therefore represent level 2 of the fair value hierarchy defined in Note 25. Multi-asset funds are also held in externally- managed funds, with active asset allocation to diversify growth across asset classes such as equities, bonds and money-market instruments. The fair value of these funds is determined on a comparable basis to the equity and fixed income funds, and therefore these funds are level 2 assets. Cash and other at 30 June 2026 mostly comprises amounts held in a Sterling and Swiss Franc bank account, in which the principal is preserved and same day liquidity is available. No scheme assets are directly invested in the Group's own equity. The movements in the schemes' assets, liabilities and reimbursement right The net surplus of the Group's defined benefit pension schemes, including the reimbursement right, on an IAS 19 basis, has increased from £3.2m at 30 June 2025 to £6.5m at 30 June 2026, primarily as a result of actuarial movements. The movements in the schemes' assets, liabilities and reimbursement right were: Reimbursementright Assets Liabilities TotalYear ended 30 June 2026 £'000 £'000 £'000 £'000Balance at the beginning of the year 12,909 141,613 (151,301) 3,221Transfers in - 1,300 (6,520) (5,220)Contributions paid by employer 1,769 1,090 - 2,859Contributions paid by employee - 68 (68) -Current service cost - - (1,160) (1,160)Past service cost - - (202) (202)Interest on pension schemes 502 7,586 (7,709) 379Remeasurement gain/(loss) under IAS 19 (325) 14,622 (6,605) 7,692Scheme administration expenses - (1,076) - (1,076)Benefits paid (289) (7,271) 7,560 -Balance at the end of the year 14,566 157,932 (166,005) 6,493 'Transfers in' represent other plans which were previously recognised in Other payables, within Holiday pay and retirement accruals. The prior period comparative has not been restated as the schemes are not material to the Group. Reimbursementright Assets Liabilities Total Year ended 30 June 2025 £'000 £'000 £'000 £'000 Balance at the beginning of the year 12,116 153,134 (163,638) 1,612Contributions paid - 162 - 162 Interest on pension schemes - 7,465 (6,962) 503 Remeasurement gain/(loss) under IAS 19 1,498 (12,267) 13,546 2,777 Scheme administration expenses (705) (1,128) - (1,833) Benefits paid - (5,753) 5,753 - Balance at the end of the year 12,909 141,613 (151,301) 3,221 The analysis of the amount recognised in the Consolidated statement of comprehensive income and expense was: 2026 2025 £'000 £'000
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Actuarial gain/(loss) arising from: - Changes in demographic assumptions (2,887) - - Changes in financial assumptions 9,057 14,857 - Experience adjustment (12,775) 187 Return on plan assets excluding interest income 13,961 (12,267) Adjustment for the asset ceiling 336 - Total amount recognised in the Consolidated statement of comprehensive income andexpense 7,692 2,777 The cumulative amount of actuarial gains and losses recognised in the Consolidated statement of comprehensive income and expense was a loss of £56.3m (2025: loss of £63.9m). Sensitivity analysis for key assumptions For the three schemes, a guide to the sensitivity of the value of the respective liabilities is as follows: Approximate effect on liabilities UK scheme Ireland scheme Germany scheme Discount rate: Increase/decrease by 0.5%-£9.3m/+£10.3m -£1.1m/+£1.3m -£1.1m/+£1.2m Inflation: Increase/decrease by 0.5% +£8.0m/-£6.9m +£1.3m/-£1.1m +£0.9m/-£0.8m Mortality: Increased/decreased life by one year+£3.9m/-£4.0m +£0.3m/-£0.4m n/a Reimbursement right The Group has recognised a reimbursement right in respect of its pension obligation for the Germany scheme. At 30 June 2026, the value of the reimbursement right was £14.6m (2025: £12.9m). This asset relates to an insurance policy that reimburses the Group for pension payments made to scheme members. The reimbursement right is not classified as a plan asset as it is not a qualifying insurance policy. The insurance policy is held with a regulated insurer and covers a portion of the pension benefits payable under the plan. The reimbursement right is considered virtually certain and has been measured at fair value. Contingent liabilities Benefits in the UK scheme are subject to a defined contribution (DC) underpin at the point of retirement or transfer out. Historically, this has been allowed for in the accounts in a consistent manner to current administrative practice and the triennial funding valuations. During the buy-in process, it was identified that the drafting of the DC underpin in the UK Fund Rules may require that the DC underpin is applied in a manner which is different to the current administrative practice. The Trustee and Company are currently seeking legal clarification and advice on this issue, with the intention of correcting the Rules to match current administrative practice. No provision for this matter has been made at 30 June 2026, as management continue to assess that it is unlikely that there will be an increase in liabilities, and due to the uncertainty of legal treatment and therefore any potential impact on liabilities. In June 2023, the High Court ruled that certain historic amendments made to the rules of the Virgin Media pension scheme were invalid without the scheme's actuary having provided the associated Section 37 certificates. This judgment was upheld by the Court of Appeal in July 2024, which has implications on other schemes that were contracted-out on a salary-related basis, and made amendments between 6 April 1997 and 5 April 2016. The UK scheme was contracted out until 5 April 2007 and amendments were made during the relevant period and as such the ruling could have implications for the UK scheme. Under the Pensions Schemes Act 2026, which came into force on 29 April 2026, the Trustees will be able to retrospectively validate amendments if required. The Company and the Trustees have commenced a review of all amending documents between 6 April 1997 and 5 April 2016 for the scheme to determine whether proper procedures were undertaken at the time of the amendments by the Trustees, actuaries and administrators. The Trustee and Company continue to seek legal advice on this matter and will act appropriately to obtain retrospective actuarial confirmation where appropriate. At the date of approving these financial statements, the possible implications, if any, for the UK scheme not having all Section 37 certificates have not been investigated in detail. Accordingly, no amendments for this matter have been included in the IAS 19 actuarial valuation as the impact, if any, cannot be reliably assessed. 24. Share-based payments
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During FY2026, the Group provided share-based payment arrangements to certain employees in accordance with the Renishaw plc deferred annual equity incentive plan. The Remuneration Committee will be seeking shareholder approval for a new share plan at the 2026 AGM to enable the Group to grant Long-term incentive plan awards and deferred bonus share awards to senior leaders in the business. Accounting policy Renishaw shares are granted in accordance with the Renishaw plc deferred annual equity incentive plan (DAEIP). Other than DAEIP awards granted to Executive Directors, the share awards are subject only to continuing service of the employee and are equity settled. For Executive Directors, if an opportunity of more than 150% of salary is awarded, half of the deferred shares will be subject to continued employment, while the other half will be subject to continued employment and the enhanced recovery provisions described in the Committee Chair's statement. The fair value of the awards at the date of grant, which is estimated to be equal to the market value, is charged to the Consolidated income statement on a straight-line basis over a three-year vesting period, with appropriate adjustments made to reflect expected or actual forfeitures. The corresponding credit is to Other reserve. The number of shares to be awarded is calculated by dividing the relevant amount of annual bonus under the DAEIP by the average price of a share during a period determined by the Remuneration Committee. The period cannot be more than five dealing days, ending on the dealing day before the award date. These shares must be purchased on the open market and cannot be satisfied by issuance of new shares or transfer of existing treasury shares. The Renishaw Employee Benefit Trust (EBT) is responsible for purchasing shares on the open market on behalf of the Company to satisfy the DAEIP awards. These are held by the EBT until transferring to the employee, which will normally be on the third anniversary of the award date, subject to continued employment. Malus and clawback provisions can be operated by the Committee within three years of the award date. During the vesting period, no dividends are payable on the shares. However, upon vesting, employees will be entitled to additional shares or cash, equivalent to the value of dividends paid on the awarded shares during this period. This amount is accrued over the vesting period. Own shares held are recognised as an element in equity until they are transferred at the end of the vesting period, and such shares are excluded from earnings per share calculations. The total cost recognised in the FY2026 Consolidated income statement in respect of the DAEIP was £0.5m (2025: £0.8m). See Note 26 for reconciliations of amounts recognised in Equity. Shares equivalent to £2.3m (2025: £0.9m) are to be awarded in respect of FY2026. 25. Financial instruments The Group has exposure to credit risk, liquidity risk and market risk arising from its use of financial instruments. This note presents information about the Group's exposure to these risks, along with the Group's objectives, policies and processes for measuring and managing the risks. Accounting policy The Group measures financial instruments such as forward exchange contracts at fair value at each balance sheet date in accordance with IFRS 9 'Financial Instruments'. Fair value, as defined by IFRS 13 'Fair Value Measurement', is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This note provides detail on the IFRS 13 fair value hierarchy. Trade and other current receivables are initially recognised at fair value and are subsequently held at amortised cost less any provision for bad and doubtful debts and expected credit losses according to IFRS 9. Trade and other current payables are initially recognised at fair value and are subsequently held at amortised cost.
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Trade and other current receivables are initially recognised at fair value and are subsequently held at amortised cost less any allowance for expected credit losses according to IFRS 9. Trade and other current payables are initially recognised at fair value and are subsequently held at amortised cost. Financial liabilities in the form of loans are initially recognised at fair value and are subsequently held at amortised cost. Financial liabilities are assessed for embedded derivatives and whether any such derivatives are closely related. If not closely related, such derivatives are accounted for at fair value in the Consolidated income statement. Foreign currency derivatives are used to manage risks arising from changes in foreign currency rates relating to overseas sales and foreign currency-denominated assets and liabilities. The Group does not enter into derivatives for speculative purposes. Foreign currency derivatives are stated at their fair value, being the estimated amount that the Group would pay or receive to terminate them at the balance sheet date, based on prevailing foreign currency rates. Changes in the fair value of foreign currency derivatives which are designated and effective as hedges of future cash flows are recognised in Other comprehensive income and in the Cash flow hedging reserve, and subsequently transferred to the carrying amount of the hedged item or the Consolidated income statement. Realised gains or losses on cash flow hedges are therefore recognised in the Consolidated income statement within revenue in the same period as the hedged item. Hedge accounting is discontinued when the hedging instrument expires or when the hedging instrument or hedged item no longer qualifies for hedge accounting. If the forecast transaction is still expected to occur, but is no longer highly probable, the cumulative gain or loss in the cash flow hedge reserve remains in that reserve until the transaction occurs. If the forecast transaction is no longer expected to occur, the cumulative gain or loss in the cash flow hedge reserve is immediately reclassified to the Consolidated income statement. Changes in fair value of foreign currency derivatives, which are ineffective or do not meet the criteria for hedge accounting in IFRS 9, are recognised in the Consolidated income statement within Gains/losses from the fair value of financial instruments. In addition to derivatives held for cash flow hedging purposes, the Group uses short-term derivatives not designated as hedging instruments to offset gains and losses from exchange rate movements on foreign currency- denominated assets and liabilities. Gains and losses from currency movements on underlying assets and liabilities, realised gains and losses on these derivatives, and fair value gains and losses on outstanding derivatives of this nature are all recognised in Financial income and expenses in the Consolidated income statement. Fair value There is no significant difference between the fair value of financial assets and financial liabilities and their carrying value in the Consolidated balance sheet. All financial assets and liabilities are held at amortised cost, apart from the forward foreign currency exchange contracts, which are held at fair value, with changes going through the Consolidated income statement unless the contracts are subject to hedge accounting. The fair values of the forward foreign currency exchange contracts have been calculated by a third-party expert, discounting estimated future cash flows on the basis of market expectations of future exchange rates, representing level 2 in the IFRS 13 fair value hierarchy. The IFRS 13 level categorisation relates to the extent the fair value can be determined by reference to comparable market values. The classifications are: level 1 where instruments are quoted on an active market; level 2 where the assumptions used to arrive at fair value have comparable market data; and level 3 where the assumptions used to arrive at fair value do not have comparable market data. Credit risk
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The Group's liquid funds are substantially held with banks with high credit ratings and the credit risk relating to these funds is therefore limited. The Group carries a credit risk relating to non-payment of trade receivables by its customers. The Group's policy is that credit evaluations are carried out on all new customers before credit is given above certain thresholds. Risk is spread across a large number of customers with no significant concentration on one customer or one geographical area. The Group establishes an allowance for impairment in respect of trade receivables where recoverability is considered doubtful. An analysis by currency of the Group's financial assets at the year end is as follows: Trade and financelease receivables Other receivables Cash and cash equivalentsand bank deposits 2026 2025 2026 2025 2026 2025Currency £'000 £'000 £'000 £'000 £'000 £'000 Pound Sterling 15,788 17,076 29,650 30,438 229,882 223,491US Dollar 84,894 50,034 9,975 970 9,235 11,322 Euro 32,764 30,669 3,712 3,525 21,784 5,153Chinese Yuan 11,910 13,592 1,001 512 14,741 17,069Japanese Yen 8,992 13,181 81 136 4,788 2,730Other 25,157 21,057 5,533 5,151 10,520 13,881 179,505 145,609 49,952 40,732 290,950 273,646 The above Trade and finance lease receivables, Other receivables and Cash and cash equivalents and bank deposits are predominantly held in the functional currency of the relevant entity, with the exception of £26.1m (2025: £13.2m) of US Dollar denominated trade receivables being held in Renishaw (Hong Kong) Limited and £1.3m (2025: £1.6m) of Euro-denominated trade receivables being held in Renishaw UK Sales Limited, along with some foreign currency cash balances which are of a short-term nature. The ageing of trade receivables past due at the end of the year was: 2026 2025 £'000 £'000 Past due zero to one month 20,155 13,601 Past due one to two months 9,039 5,935 Past due more than two months 10,421 8,538 Balance at the end of the year 39,615 28,074 Movements in the provision for impairment of trade receivables during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year 5,894 4,479 Changes in amounts provided 5,015 3,215 Amounts used (452) (1,800) Balance at the end of the year 10,457 5,894 The Group applies the simplified approach when measuring the expected credit loss for trade receivables, with a provision matrix used to determine a lifetime expected credit loss. For this provision matrix, trade receivables are grouped into credit risk categories, with category 1 being the lowest risk and category 5 the highest. Risk scores are allocated to the customer's country of operation, their type (such as distributor, end user and OEM), their industry and the proportion of their debt that was past due at the year end. These scores are then weighted to produce an overall risk score for the customer, with the lowest scores being allocated to category 1 and the highest scores to category 5. The matrix then applies an expected credit loss rate to each category, with this rate being determined by adjusting the Group's historical credit loss rates to reflect forward-looking information. Where certain customers have been identified as having a significantly elevated credit risk these have been provided for on a specific basis. Both elements of expected credit loss are shown in the matrix below and have been shown separately so as not to distort the expected credit loss rate. Riskcategory 1 Riskcategory 2 Riskcategory 3 Riskcategory 4 Riskcategory 5 2026Total Year ended 30 June 2026 £'000 £'000 £'000 £'000 £'000 £'000
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Gross trade receivables 15,016 44,558 105,987 5,749 701 172,011 Expected credit loss rate 0.79% 0.86% 0.93% 1.00% 1.07% 0.89% Expected credit loss allowance 119 382 968 57 7 1,533Specific loss allowance 6 - 7,352 1,566 - 8,924 Total loss allowance 125 382 8,320 1,623 7 10,457 Net trade receivables 14,891 44,176 97,667 4,126 694 161,554 Riskcategory 1 Riskcategory 2 Riskcategory 3 Riskcategory 4 Riskcategory 5 2025Total Year ended 30 June 2025 £'000 £'000 £'000 £'000 £'000 £'000 Gross trade receivables 14,397 31,663 82,780 5,518 - 134,358 Expected credit loss rate 0.55% 0.61% 0.66% 0.71% - 0.65% Expected credit loss allowance 80 192 531 39 - 842Specific loss allowance - - 4,730 322 - 5,052Total loss allowance 80 192 5,261 361 - 5,894 Net trade receivables 14,317 31,471 77,519 5,157 - 128,464 Finance lease receivables are subject to the same approach as noted above for trade receivables. Derivative assets are assessed with reference to the credit risk of the banks that are counterparties to the forward contracts. Other receivables include mostly prepayments and indirect tax receivables. Prepayment balances are reviewed at each reporting date to confirm that prepaid goods or services are still expected to be received, while tax balances are reviewed for recoverability. Other receivables at the year end comprised: 2026 2025 £'000 £'000 Indirect tax receivable 13,403 10,959 Software maintenance 9,238 10,181 Bank interest receivable 3,436 4,790 Tariff refund receivable 8,556 - Grants 1,130 885 Research and development tax credit recoverable 263 1,224 Contract assets 2,523 1,509 Other prepayments 11,403 11,184 Total other receivables 49,952 40,732 The maximum exposure to credit risk is £526.1m (2025: £482.2m), comprising the Group's trade, finance and other receivables, cash and cash equivalents and bank deposits, and derivative assets. The maturities of non-current other receivables, being only derivatives, at the year end were: 2026 2025 £'000 £'000 Receivable between one and two years 1,652 7,878 1,652 7,878 Liquidity risk Our approach to managing liquidity is to ensure, as far as possible, that we will always have sufficient liquidity to meet our liabilities when due, without incurring unacceptable losses or risking damage to the Group's reputation. We use monthly cash flow forecasts on a rolling 12-month basis to monitor cash requirements. With Cash and cash equivalents and bank deposits at 30 June 2026 totalling £291.0m, and £110.5m cash flows generated from operating activities in the year, the Group remains in a strong liquidity position. In respect of Cash and cash equivalents and bank deposits, the carrying value is materially the same as fair value because of the short maturity of the bank deposits. Bank deposits are exposed to interest rate risk as both fixed and floating rates may fluctuate over time, impacting the Group's interest income. A decrease of 1% in interest rates would result in a reduction in interest income of approximately £2.8m. The contractual maturities of financial liabilities at the year end were: Contractual cash flows
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Carryingamount Effect ofdiscounting Grossmaturities Up to1 year 1-2years 3-5yearsYear ended 30 June 2026£'000 £'000 £'000 £'000 £'000 £'000 Trade payables 38,238 - 38,238 38,238 - - Other payables 68,000 - 68,000 68,000 - - Borrowings 1,986 44 2,030 694 684 652 Amounts payable to jointventure 15,948 - 15,948 15,948 - - Lease liabilities 11,518 2,827 14,345 4,708 3,144 6,493Forward exchangecontracts 1,113 - 1,113 1,073 40 - 136,803 2,871 139,674 128,661 3,868 7,145 Contractual cash flows Carryingamount Effect ofdiscounting Grossmaturities Up to1 year 1-2years 3-5yearsYear ended 30 June 2025 £'000 £'000 £'000 £'000 £'000 £'000 Trade payables 25,943 - 25,943 25,943 - - Other payables 57,132 - 57,132 57,132 - - Borrowings 2,884 85 2,969 764 754 1,451 Amounts payable to jointventure 14,530 - 14,530 14,530 - - Lease liabilities 12,761 3,131 15,892 4,509 3,431 7,952 Forward exchange contracts1,246 - 1,246 150 1,096 - 114,496 3,216 117,712 103,028 5,281 9,403 Market risk The Group operates in several foreign currencies with the majority of sales being made in these non-Sterling currencies, but with most manufacturing being undertaken in the UK, Ireland and India. A large proportion of sales are made in US Dollar, Euro and Japanese Yen. The Group enters into US Dollar, Euro and Japanese Yen derivative financial instruments to manage its exposure to foreign currency risk, including: i. forward foreign currency exchange contracts to hedge a significant proportion of the Group's forecasted US Dollar, Euro and Japanese Yen revenues over the next 24 months; and ii. one-month forward foreign currency exchange contracts to offset the gains/losses from exchange rate movements arising from foreign currency-denominated intragroup balances of the Company held in US Dollar, Euro, Japanese Yen and Canadian Dollar. The amounts of foreign currencies relating to these forward contracts and options are, in Sterling terms: 2026 2025 Nominal value£'000 Fair value£'000 Nominalvalue£'000 Fair value£'000 US Dollar 340,768 3,786 299,987 18,954Euro 152,143 2,258 146,500 613Japanese Yen 12,956 1,582 21,947 1,354Canadian Dollar 4,670 63 5,133 56 510,537 7,689 473,567 20,977 The following are the exchange rates which have been applicable during the financial year: 2026 2025 Currency Averageforwardcontractrate Year endexchangerate Averageexchangerate Averageforwardcontract rate Year endexchangerate Averageexchangerate US Dollar 1.27 1.32 1.34 1.28 1.37 1.30 Euro 1.14 1.16 1.15 1.14 1.17 1.19 Chinese Renminbi n/a 9.00 9.33 n/a 9.80 9.35 Hong Kong Dollar n/a 10.37 10.45 n/a 10.75 10.12 Japanese Yen 175 215 207 178 198 193 Canadian Dollar n/a 1.88 1.85 n/a 1.87 1.82 Hedging
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In relation to the forward currency contracts in a designated cash flow hedge, the hedged item is a layer component of forecast sales transactions. Forecast transactions are deemed highly probable to occur and Group policy is to hedge around 75% of net foreign currency exposure for USD, EUR and JPY up to two years. The hedged item creates an exposure to receive USD, EUR or JPY, while the forward contract is to sell USD, EUR or JPY and buy GBP. Therefore, there is a strong economic relationship between the hedging instrument and the hedged item. The hedge ratio is 100%, e.g. £10m nominal value of forward currency contracts are used to hedge £10m of forecast sales. Fair value gains or losses on the forward currency contracts are offset by foreign currency gain or losses on the translation of USD, EUR and JPY based sales revenue, relative to the forward rate at the date the forward contracts were arranged. Foreign currency exposures in Hong Kong Dollar (HKD) and USD are aggregated and only USD forward currency contracts are used to hedge these currency exposures. Sources of hedge ineffectiveness according to IFRS 9 Financial Instruments include: - changes in timing of the hedged item; - reduction in the amount of the hedged sales considered to be highly probable; - a change in the credit risk of Renishaw or the bank counterparty to the forward contract; and - differences in assumptions used in calculating fair value. No contracts have become ineffective during the period. A decrease of 10% in the highly probable forecasts would result in no ineffective contracts. From July 2026 we updated our Group hedging policy. Going forward, we will use HKD forward currency contracts to hedge HKD foreign currency exposure, instead of using USD forward currency contracts. We have removed our previous forward currency contract rate caps which could result in unhedged periods. This increases certainty over forward positions, although we maintain some flexibility over coverage based on management's judgement over prevailing forward rates. We will hedge net foreign currency exposure, subject to a minimum and maximum net foreign currency coverage of 30% and 60% respectively between one and two years and 60% and 90% respectively in the period up to one year, for USD, HKD, EUR and JPY. For both the Group and the Company, the following table details the fair value of forward foreign currency derivatives according to the categorisation of instruments noted previously: 2026 2025 Nominalvalue£'000 Fairvalue£'000 Nominalvalue£'000 Fair value£'000 Forward currency contracts in a designated cash flow hedge (i) Non-current derivative assets 171,644 1,652 137,417 7,878 Current derivative assets 243,654 6,952 218,870 13,606 Current derivative liabilities 2,863 (419) 19,339 (37) Non-current derivative liabilities 11,180 (40) 33,559 (1,096) 429,341 8,145 409,185 20,351 (Losses)/gains recognised in the Consolidatedstatement of comprehensive income and expense - (12,208) - 5,804 Forward currency contracts not in adesignated cash flow hedge (ii) Current derivative assets 27,253 198 56,873 739 Current derivative liabilities 53,943 (654) 7,509 (113) 81,196 (456) 64,382 626 (Losses)/gains recognised in Financialincome/(expense) in the Consolidated incomestatement - (895) - 3,360 Total forward contracts and options Non-current derivative assets 171,644 1,652 137,417 7,878 Current derivative assets 270,907 7,150 275,743 14,345 Current derivative liabilities 56,806 (1,073) 26,848 (150) Non-current derivative liabilities 11,180 (40) 33,559 (1,096) 510,537 7,689 473,567 20,977
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The total recognised in Revenue in the Consolidated income statement relating to cash flow hedges previously recognised through Other comprehensive income amounted to £11.3m gain (2025: £19.2m gain). For the Group's foreign currency forward contracts at the balance sheet date, if Sterling appreciated by 5% against the US Dollar, Euro, Japanese Yen and Canadian Dollar, this would increase pre-tax equity by £20.2m and increase profit before tax by £3.9m, while a depreciation of 5% would decrease pre-tax equity by £22.4m and decrease profit before tax by £4.2m. 26. Share capital and reserves The Group defines capital as being the equity attributable to the shareholders of the Company, which is captioned on the Consolidated balance sheet. The Board's policy is to maintain a strong capital base, ensuring the security of the Group, and to maintain a balance between returns to shareholders, with a progressive dividend policy. This note presents figures relating to this capital management, along with an analysis of all elements of Equity attributable to shareholders and non-controlling interests. Share capital 2026 2025 £'000 £'000 72,788,543 allotted, called-up and fully paid ordinary share of 20p each14,558 14,558 The ordinary shares are the only class of share in the Company. Holders of ordinary shares are entitled to vote at general meetings of the Company and receive dividends as declared. The Articles of Association of the Company do not contain any restrictions on the transfer of shares nor on voting rights. Dividends paid Dividends paid comprised: 2026 2025 £'000 £'000 FY2025 final dividend paid of 61.3p per share (2024: 59.4p) 44,619 43,205 Interim dividend paid of 16.8p per share (2025: 16.8p) 12,223 12,219 Total dividends paid 56,842 55,424 A final dividend of 65.2p per share is proposed in respect of FY2026, which will be payable on 3 December 2026 to shareholders on the register on 30 October 2026. A special dividend of £51.0m or 70.0p per share has been approved by the Directors as an interim dividend. The dividend will be paid on 3 December 2026 to shareholders on the register on 30 October 2026. Shareholder approval for this special dividend is not required. Own shares held The EBT is responsible for purchasing shares on the open market on behalf of the Company to satisfy DAEIP awards (see Note 24). Own shares held are recognised as an element in equity until they are transferred at the end of the vesting period. Movements during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year (2,140) (2,963) Acquisition of own shares (979) (154)Disposal of own shares on vesting of awards 2,025 977Balance at the end of the year (1,094) (2,140) In December 2024, 4,902 shares were purchased on the open market by the EBT at a price of £31.40, costing a total of £153,923. The fair value of the awards at the grant date, being 23 October 2024, was £162,177. A total of
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656 vested early in FY2025, based on the performance conditions being met. The remaining shares will vest on 23 October 2027, with no forfeitures expected at 30 June 2026. In December 2025, 27,437 shares were purchased on the open market by the EBT at a price of £35.79 costing a total of £978,749. The fair value of the award at the grant date, being 22 October 2025, was £997,194. Total shares of 586 vested on 31 March 2026, based on the performance conditions being met. Total shares of 1,747 will vest on 31 March 2027, with the remaining shares of 25,104 vesting on 22 October 2028. No forfeitures are expected at 30 June 2026. Other reserve The other reserve relates to share-based payments charges according to IFRS 2 in relation to the DAEIP, along with historical amounts relating to investments in subsidiary undertakings not eliminated on consolidation. Movements during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year 1,193 1,380 Disposal of own shares on vesting of awards (2,025) (977)Share-based payments charge in respect of awards 491 790 Balance at the end of the year (341) 1,193 Currency translation reserve The currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of the overseas operations and currency movements on intragroup loan balances classified as net investments in overseas operations. Movements during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year (3,646) 2,480 Loss on net assets of foreign currency operations (473) (6,295) Loss in the year relating to subsidiaries (473) (6,295)Currency exchange differences relating to joint ventures 190 169 Balance at the end of the year (3,929) (3,646) Cash flow hedging reserve The cash flow hedging reserve, for both the Group and the Company, comprises all foreign exchange differences arising from the valuation of forward exchange contracts which are effective hedges and mature after the year end. These are valued on a mark-to-market basis, are accounted for in Other comprehensive income and expense and accumulated in Equity, and are recycled through the Consolidated income statement and Company income statement when the hedged item affects the income statement, or when the hedging relationship ceases to be effective. See Note 25 for further detail. Movements during the year were: 2026 2025 £'000 £'000 Balance at the beginning of the year 15,264 10,911Gain on contract maturity recognised in revenue during the year(11,315) 19,176Revaluations during the year (893) (13,372)Deferred tax movement 3,052 (1,451) Balance at the end of the year 6,108 15,264 Non-controlling interest Movements during the year were: 2026 2025 £'000 £'000Balance at the beginning of the year (577) (577)Balance at the end of the year (577) (577) The non-controlling interest represents the minority shareholdings in Renishaw Diagnostics Limited - 7.6%.
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27. Capital commitments At the end of a financial year, we typically have obligations to make payments in the future, for which no provision is made in the financial statements. We have committed to renovating and expanding a warehouse in Germany, which includes expenditure on sustainability initiatives, enhancements to our Miskin manufacturing facility and capital equipment to support manufacturing output. Authorised and committed capital expenditure at the end of the year were: 2026 2025 £'000 £'000Freehold land and buildings 9,312 13,856Plant and equipment 11,015 6,411Motor vehicles 124 129Total committed capital expenditure 20,451 20,396 28. Related parties The Group reports transactions with related parties, which mostly comprise our joint venture company. Joint ventures and other related parties had the following transactions and balances with the Group: 2026 2025 £'000 £'000 Purchased goods and services from the Group during the year906 219 Sold goods and services to the Group during the year 27,425 22,794 Interest paid from the Group during the year 282 371 Paid dividends to the Group during the year 957 1,500 Amounts owed to the Group at the year end 210 223Amounts owed by the Group at the year end 19,638 17,462 Amounts owed by the Group include a 14-day notice deposit agreement with RLS for EUR 18.5m (£15.9m equivalent) as at 30 June 2026 (FY2025: £14.5m); see Note 13 for further details. The total interest payable on amounts owed to joint ventures during the year was £0.3m (FY2025: £0.4m). There were no bad debts relating to related parties written off during FY2026 or FY2025. Purchased goods and services from the Group during the year include an operating lease arrangement with McMurtry Automotive Limited for a property owned by the Group. The operating lease commenced on 1 April 2025 and has a 10-year term. The rental income is £187,500 per annum. The property is classified as investment properties in the Consolidated balance sheet, with the rental income and direct operating expenses recognised in Consolidated income statement. At 30 June 2026, rental income of £187,500 (FY2025: £46,875) has been recognised, with no amounts owed to the Group. As announced on 26 November 2025 the families of the Company's founders - the late Sir David McMurtry and current Non-executive Director John Deer - established a joint family holding company, Deltam Holdings Limited (Deltam), to hold 50.25% of the issued share capital of Renishaw. Deltam is therefore a controlling shareholder for the purposes of the UKLRs. 29. Alternative performance measures In accordance with Renishaw's alternative performance measure (APM) policy and ESMA Guidelines on Alternative Performance Measures (2015), this section defines non-IFRS measures that we believe give readers additional useful and comparable views of our underlying performance. Key judgement - Whether items are appropriate to exclude from adjusted measures Our APM policy allows us to adjust for 'infrequently occurring events that can significantly affect profit and earnings'. This year, we've had to carefully consider the nature and intention of some events and transactions, to determine whether they should be 'adjusted for'.
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We continue to report Revenue at constant exchange rates, Adjusted profit before tax, Adjusted profit after tax, Adjusted earnings per share, Adjusted operating profit (including by segment), Adjusted operating profit at constant exchange rates, Adjusted cash flow conversion from operating activities, and Return on invested capital as APMs. These are calculated consistently with previous years, except for Adjusted cash flow conversion from operating activities and Return on invested capital. Adjusted cash flow conversion from operating activities now adjusts for the cash effect of the adjusting items. The cash impact of adjusting items on previously reported metrics is not material and therefore has not been restated. Return on invested capital has been updated to reflect how the Board monitors efficiency in allocating capital to profitable activities, with the comparatives restated. Adjusted operating profit by segment has been represented following the reporting segment change (see Note 2). Aside from Revenue at constant exchange rates, all other APMs exclude infrequently occurring events which impact our financial statements, recognised according to applicable IFRS, that we believe should be excluded from these APMs to give readers additional useful and comparable views of our underlying performance. Revenue at constant exchange rates is defined as revenue recalculated using the same rates as were applicable to the previous year and excluding forward contract gains and losses. 2026 2025Revenue at constant exchange rates: £'000 £'000 Statutory revenue as reported 815,779 713,044Adjustment for forward contract (gains)/losses (11,315) (19,176) Adjustment to restate current year at previous year exchange rates9,759 - Revenue at constant exchange rates 814,223 693,868 Year-on-year revenue growth at constant exchange rates 17.3% n/a Year-on-year revenue growth at constant exchange rates for FY2025 was 3.7%. Adjusted profit before tax, Adjusted profit after tax, Adjusted earnings per share and Adjusted operating profit are defined as the profit before tax, profit after tax, earnings per share and operating profit after excluding some or all of the following: - costs relating to the cost reduction programme (a); - costs relating to the loss of office payable to an Executive Director (b); - costs relating to the closure of the drug delivery business (c); - other interest payable related to liabilities recognised for historical and non-recurring tax matters (d); and - taxation prior year adjustment related to historical and non-recurring tax matters (d). a) Restructuring costs, where applicable during the year, are excluded from adjusted measures on the basis that they do not frequently recur. In FY2025, the Group initiated a cost reduction programme to achieve labour savings. The cost of the voluntary and compulsory redundancies has been recognised in FY2026 based on relevant accounting standards. The Group has recognised redundancy payments of £14.9m. The amounts have been recognised in Cost of sales, Distribution expenditure and Administrative expenditure within the Consolidated income statement. b) There may be other items which do not frequently recur, and which it may be appropriate to exclude from adjusted measures. The Group Finance Director stepped down from the position on the 31 December 2025. The Group recognised costs related to the loss of office of £2.0m in the period. As the loss of office does not relate to current year trading performance, the amounts have been excluded from adjusted measures. The amounts have been recognised in Administrative expenses within the Consolidated income statement. c) Restructuring costs, where applicable during the year, are excluded from adjusted measures on the basis that they do not frequently recur. In FY2025, the Group made the decision to close the drug delivery business. In FY2026, the Group incurred further costs, following the decision to sell the drug delivery business. The Group has recognised income of £0.3m related to the sale, and a loss on disposal of intangible assets of £0.9m. The amounts have been recognised in Cost of sales within the Consolidated income statement.
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d) There may be other items which do not frequently recur, and which it may be appropriate to exclude from adjusted measures. During FY2026, the Group recognised net interest charge of £0.4m and a Taxation release of £2.6m relating to historical and non-recurring tax matters. The tax matters relate to specific legacy arrangements which we would not expect to recur. Applicable accounting standards require a provision for tax and the associated interest, however we continue to seek resolution to these matters which would reduce these amounts. As the historical and non-recurring tax matters do not relate to current year trading performance, the amounts have been excluded from adjusted measures. The amounts have been recognised in Financial income and expenses and Income tax expense within the Consolidated income statement. 2026 2025Adjusted profit before tax: £'000 £'000Statutory profit before tax 149,964 118,000Cost reduction programme 14,925 --reported in production costs 2,859 --reported in engineering costs 6,110 --reported in distribution costs 3,350 --reported in administrative expense 2,606 -Loss of office payable to Executive Director 1,980 --reported in administrative expenses 1,980 -Closure of drug delivery business 666 2,059-reported in production costs (250) --reported in engineering costs 916 2,059Closure of Edinburgh research facility - 2,320-reported in engineering costs - 2,320Other interest payable on historical and non-recurring tax matters 419 4,852-reported in financial income (2,450) --reported in financial expenses 2,869 4,852 Adjusted profit before tax 167,954 127,231 2026 2025Adjusted profit after tax: £'000 £'000Statutory profit after tax 118,960 83,757Cost reduction programme (net of tax) 11,301 -Loss of office payable to Executive Director (net of tax) 1,485 -Closure of drug delivery business (net of tax) 500 1,544Closure of Edinburgh research facility (net of tax) - 1,740Other interest payable on historical and non-recurring tax matters (net of tax) 1,031 4,026Prior year adjustment taxation charge on historical and non-recurring tax matters (2,584) 9,154Adjusted profit after tax 130,693 100,221 2026 2025Adjusted earnings per share: pence penceStatutory earnings per share 163.5 115.2Cost reduction programme (net of tax) 15.5 -Loss of office payable to Executive Director (net of tax) 2.0 -Closure of drug delivery business (net of tax) 0.7 2.1Closure of the Edinburgh research facility (net of tax) - 2.4Other interest payable on historical and non-recurring tax matters (net of tax) 1.4 5.5Taxation prior year adjustments (3.6) 12.6Adjusted earnings per share 179.5 137.8 2026 2025Adjusted operating profit: £'000 £'000Statutory operating profit 135,325 107,885Cost reduction programme 14,925 -Loss of office payable to Executive Director 1,980 -Closure of drug delivery business 666 2,059Closure of the Edinburgh research facility - 2,320Other interest payable on historical and non-recurring tax matters - -Adjusted operating profit 152,896 112,264 Adjustments to the segmental operating profit: 2026 2025Industrial Metrology £'000 £'000Operating profit 66,357 74,130Cost reduction programme 9,098 -Loss of office payable to Executive Director 1,244 -Closure of Edinburgh research facility - 1,378Adjusted Industrial Metrology operating profit 76,699 75,508 2026 2025Position Measurement £'000 £'000Operating profit 67,230 46,010Cost reduction programme 3,833 -Loss of office payable to Executive Director 416 -Closure of Edinburgh research facility - 618Adjusted Position Measurement operating profit 71,479 46,628
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2026 2025Specialised Technologies £'000 £'000Operating profit 1,738 (12,255)Cost reduction programme 1,994 -Loss of office payable to Executive Director 320 -Closure of drug delivery business 666 2,059Closure of Edinburgh research facility - 324Adjusted Specialised Technologies operating profit 4,718 (9,872) Adjusted operating profit at constant exchange rates is defined as Adjusted operating profit recalculated using the same rates as applied to the previous year and excluding forward contract gains and losses. 2026 2025Adjusted operating profit at constant exchange rates: £'000 £'000Adjusted operating profit 152,896 112,264Adjustment for forward contract (gains)/losses (11,315) (19,176)Adjustment to restate current year at previous year exchange rates 9,800 -Adjusted operating profit at constant exchange rates 151,381 93,088Year-on-year adjusted operating profit increase at constant exchange rates 62.6% - For FY2025 year-on-year adjusted operating profit at constant exchange rates was an increase of 1.2%. Adjusted cash flow conversion from operating activities is calculated as Adjusted cash flow from operating activities as a proportion of Adjusted operating profit. This is useful for the Board to measure how efficient we are at converting operating profit into cash. 2026 2025Adjusted cash flow conversion from operating activities: £'000 £'000Statutory cash flows from operating activities 110,530 147,896Cash effect of adjusting items 18,207 -Income taxes paid 36,681 6,207Proceeds from sale of property, plant and equipment and intangible assets 3,885 4,887Purchase of property, plant and equipment and intangible assets (48,288) (56,558)Adjusted cash flow from operating activities 121,015 102,432Adjusted operating profit 152,896 112,264Adjusted cash flow conversion from operating activities 79.1% 91.2% Adjustments to operating profit as reported totalled £17.6m (2025: £4.4m), resulting in an operating cash outflow of £16.9m (2025: £nil). The cash effect of adjusting items includes an operating cash outflow of £1.3m (2025: £nil) relating to FY2025 adjusting items. Return on invested capital (ROIC) is the Adjusted profit after tax before net financial income (net of tax) as a percentage of the Average invested capital in the year. Invested capital is defined as total equity, excluding cash and cash equivalents, bank deposits, net employee benefits (including reimbursement right asset and deferred tax), borrowings, amounts owed to joint ventures and lease liabilities. This is useful for the Board to measure our efficiency in allocating capital to profitable activities. Average invested capital in the year is the average of the invested capital at the beginning of the year and at the end of the year. Adjusted profit after tax before net financial income is calculated as follows: 2026 Restated2025 £'000 £'000Adjusted profit after tax 130,693 100,221Net financial income (net of tax) (8,574) (8,845)Adjusted profit after tax before bank interest received 122,119 91,376 2026 Restated2025 Restated2024Return on invested capital (ROIC): £'000 £'000 £'000Total equity 984,132 925,864 896,265Less cash and cash equivalents (148,301) (87,420) (122,293)Less bank deposits (142,649) (186,226) (95,542)Add net employee benefits 8,073 9,688 10,504Less reimbursement right (14,566) (12,909) (12,116)Add/(less) deferred tax on net retirement benefit & reimbursement right asset898 (4) (232)Add borrowings 1,986 2,884 3,522Add lease liabilities 11,518 12,761 15,022Add amounts owed to joint ventures 15,948 14,530 8,475Invested capital 717,039 679,168 703,605Average invested capital 698,104 691,387 671,844Return on invested capital 17.5% 13.2% 13.6%
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30. Business combinations On 9 June 2026, the Group acquired the remaining 30% of the issued share capital of Metrology Software Products Limited (MSP), which supplies software used in Renishaw products and standalone software. The Group previously held a 70% shareholding in MSP, with MSP accounted for as a joint venture as the control requirements of IFRS 10 were not satisfied. The acquisition has secured the supply of software for the benefit of the Group and our customers. The total purchase consideration, being cash paid, was £2.2m for the remaining 30% of MSP. There is no contingent consideration. The fair value of assets and liabilities recognised on acquisition is as follows: Fair value recognised onacquisition £'000Cash 4,198Property, plant & equipment 1,358Investment properties 350Trade receivables 677Other receivables 120Inventories 47Current tax receivable 121Trade payables (59)Other payables (271)Contract liabilities (196)Deferred tax (2)Net identifiable assets acquired 6,343Goodwill 1,095Net assets acquired 7,438 Acquisition costs of £0.1m arose as a result of the transaction. These have been recognised as part of administrative expenses in the Consolidated income statement. The Group's share of net assets previously recognised as an investment in a joint venture was £4.8m (see Note 13). This amount included £0.4m of Goodwill previously recognised against the investment in joint venture. As the business combination has been recognised in stages, a fair value gain of £0.4m has been recognised in the Consolidated income statement. Goodwill of £1.1m has been recognised, being the value of expected synergies arising from the acquisition. Goodwill is allocated entirely to the Industrial Metrology product line. The acquisition accounting for MSP has taken place as if the Group acquired MSP on 30 June 2026 as the movement between the acquisition date, 9 June 2026, and the year end was not material to the Group. Cautionary statement This document contains statements about Renishaw plc that are or may be forward-looking statements. These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Renishaw plc. They involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person to be materially different from any results, performance or achievements expressed or implied by such statements. They are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. All subsequent oral or written forward-looking statements attributable to Renishaw plc or any of its shareholders or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this document speak only as of the date they were made and are based on information then available to Renishaw plc. Investors should not place undue reliance on such forward-looking statements, and Renishaw plc does not undertake any obligation to update publicly or revise any forward-looking statements.
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