Companies: OXIG   

The maker of highly technical equipment for use in sensitive medical, scientific and industrial situations reported a mixed bag of figures at the half way stage: profits before tax and exceptional items nearly halved to £2.3 million as turnover fell 9 per cent to £95 million. Christopher Spink reports.

Chief executive Andrew Mackintosh, who has been presiding over a series of restructurings since joining the company in 1998, said the superconductivity business, which supplies powerful electromagnets to clients, saw sales rise 8 per cent to £44.7 million during the six months to the end of September. This enabled the division to turn last time's £863,000 operating loss into a £2 million profit on the operating level this time.

The upturn in this area was cancelled out by the severe 23 per cent drop in turnover in the Analytical division to £33.3 million. This meant last time's £4.1 million operating profit became a £14,000 loss.

Mackintosh explained this difference because of the nature of each division's clients: 'Research departments in universities are our main customers in the superconductivity area, so decisions are made six months ahead and are less reliant on the economic climate, whereas in the analytical area clients operate in industry and only put in orders two months before they are required, as purchasing decisions are more economically sensitive.'

The medical division also saw a drop in sales but operating losses were reduced as well in this instance thanks to cost-cuts. Mackintosh plans to replicate these cuts in other divisions, if sales fall.

The group has also cut debts over the past year back to £10.3 million. Mackintosh said he may make use of this enhanced financial capacity and low gearing to make 'bolt-on acquisitions'.

The interim dividend has been held at 2.4p and Mackintosh is hopeful of holding the full year payment as well, putting the group on a prospective yield of nearly 6 per cent.

Oxford's shares rose 12p, or 8.4 per cent, to 150p today, lifting the company off its year-low, as investors picked up Mackintosh's comment that profits should improve in the second half.

Oxford Instruments	LSE	£63.6m	128.75p	-0.75p
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