AI analysis by Aleth · primary release
Unaudited interim results for the six months to 30 September 2026 (H1 FY27), continuing operations. Figures are company-stated; OCC is organic constant currency.
Summary
Order intake rose 44% to £296.0m, lifting the group order book to £317m. Revenue grew 9.0% OCC to £201.1m. Adjusted operating profit rose 21.5% to £30.0m (reported) and the margin 160bps to 14.9%, with both divisions improving despite a £1.7m currency headwind. Free cash flow stepped up to £19.1m.
Semiconductors drove the half, much of it AI datacentre demand. Semiconductor orders across both divisions rose 132.7% to £164.3m, 56% of everything ordered.
Imaging & Analysis (I&A) grew orders 12.6%, led by semiconductor and materials analysis customers. Its revenue rose only 3.1%, after heavy deliveries at the end of last year.
Advanced Technologies (AT) did most of the work: orders more than doubled and revenue rose 26.6%. In the chief executive's words, "Current demand is being accelerated by investment in AI datacentres and the transition towards higher-volume, larger-wafer indium phosphide (InP) device manufacturing."
The figures were in line with the 13 October trading update. The changes are in the outlook:
AT in FY28: revenue growth of about 20% and a margin within its 12-15% target range. The first year attached to that target since it was raised in June.
Group margin: now to improve on FY26 despite a £3.2m currency headwind (June: broadly in line).
Buyback: the company intends a further £25m after the current £100m programme.
FY27: unchanged, in line with market expectations.
Headline financials
£m unless stated H1 FY27 H1 FY26 Change, reported / OCC
Order intake 296.0 205.2 +44.2% / +44.3%
Revenue 201.1 185.5 +8.4% / +9.0%
Adjusted operating profit 30.0 24.7 +21.5% / +28.3%
Adjusted operating margin 14.9% 13.3% +160bps / +240bps
Statutory operating profit 27.1 20.0 +£7.1m
Adjusted diluted EPS 42.2p 32.7p +29.1%
Interim dividend 5.8p 5.4p +7.4%
Free cash flow 19.1 0.2 +£18.9m
Net cash at 30 September 74.8 45.1 +£29.7mImaging & Analysis
£m unless stated H1 FY27 H1 FY26 Change, reported / OCC
Orders 163.8 146.6 +11.7% / +12.6%
Revenue 142.2 138.9 +2.4% / +3.1%
Adjusted operating profit 25.6 23.7 +8.0%
Adjusted operating margin 18.0% 17.1% +90bps / +220bps
Order book at 30 September 144 +7.6%Commercial orders rose 20%, helped by the regional sales model and new demonstration centres, led by semiconductor applications (orders +59.4%, revenue +33.9%) as customers invest in leading-edge logic, AI infrastructure and more complex memory. Even an older technology is benefiting: "the scale and economics of AI datacentres are driving renewed demand for hard disk drive (HDD) technologies."
Materials analysis, the division's largest market, grew orders by double digits. Healthcare and life science remained weak, with orders down 6%.
Academic orders grew 2.8%: growth in Asia-Pacific and Europe more than offset weaker US funding. Karl Deisseroth of Stanford, "a longstanding user of our cameras and microscopy products", shared this year's Nobel Prize in Physiology or Medicine.
Revenue lagged orders after heavy Q4 FY26 deliveries left a smaller opening order book, now rebuilt to £144m, with around 70% due in H2.
The margin rose on higher revenue and a better sales mix. Part of the gain will reverse in H2 as the cost of new regional sales teams annualises.
Advanced Technologies
£m unless stated H1 FY27 H1 FY26 Change, reported / OCC
Orders 132.2 58.6 +125.6% / +123.9%
Revenue 58.9 46.6 +26.4% / +26.6%
Adjusted operating profit 4.4 1.0 +£3.4m
Adjusted operating margin 7.5% 2.1% +530bps / +470bps
Order book at 30 September c.173 over +90%The company calls the compound semiconductor business, over 90% of the division, "at an important inflection point in its development as it successfully converts its longstanding technology leadership into significant traction with high-volume manufacturers."
About 75% of orders were for datacom. After a significant order early in Q1, AT won orders from several more volume manufacturers, and demand is spreading to atomic layer deposition and ion beam tools.
Revenue rose 26.6% as last year's order growth converted. Profit rose on operating leverage, partly offset by investment in capacity and about £1.9m of Severn Beach depreciation and running costs.
The order book covers FY27 in full and runs well into Q3 FY28, with around 40% due in H2. Lead times are about 12 months, so any further FY27 orders will deliver in FY28 or FY29.
X-ray tubes, the smaller business, grew revenue almost 11%, with "encouraging signs of tariff-related uncertainty easing."
Cash and capital returns
Free cash flow £19.1m (H1 FY26: £0.2m), on normalised cash conversion of 85% (41%), lower restructuring costs and no pension contributions.
Net cash £74.8m, down from £94.0m at 31 March after £31m of shareholder returns and a £4.5m FemtoTools earn-out.
Buyback: £83.1m of the £100m programme done by 30 September; the remaining £16.9m expected early in 2027, as the company said on 13 October (June: by Q3 FY27). The company then intends a further £25m, to complete by summer 2027.
Outlook (company guidance)
FY27: in line with market expectations, given as consensus revenue £446.1m and adjusted operating profit £81.2m, an 18.2% margin (13 October: £444.4m and £81.0m).
Group margin: to improve on FY26's 17.4%, more than offsetting a £3.2m currency headwind. June: "broadly in line with FY26".
I&A, FY27: low single-digit revenue growth, as guided in June, with H2 revenue about 25% above H1 if Q3 orders match the H1 average. Margin flat at constant currency, with about 120bps of currency headwind on the reported figure.
AT, FY27: high-teens revenue growth if lead times hold, as guided in June, and a margin in high single digits; June said only that the margin would "move significantly forward" from FY26's 2.6%.
AT, FY28: about 20% revenue growth and a margin within the 12-15% target range, set in June with no year attached.
Next trading update: 14 January 2027.
Read-through and what to watch
Growth is coming from AT. It took 45% of the half's orders and 29% of revenue, at a 7.5% margin against 18.0% in I&A. On the company's own bridge, its rising share of revenue cost the group about 50bps of margin in H1. AT reaching 12-15% in FY28 is the clearest route to the group's 20%+ margin goal.
I&A needs a strong second half. It earns most of the group's profit. The consensus implies a group H2 adjusted operating margin of 20.9%, against 20.6% in H2 FY26.
Key follow-ups:
AT's conversion of its order book. In FY26 its orders rose 28% while compound semiconductor revenue was flat, as larger systems and customers' facility readiness delayed delivery.
I&A's second half, and US academic demand.
The group margin, now guided to end above FY26's 17.4%.
What follows the buyback: M&A, mainly for I&A, remains a priority.
Read the primary RNS release. Figures and guidance are company-stated; the interim statements are unaudited. Not investment advice.