Oxford Instruments Navigates Tariff Turbulence, Expects Stable Full-Year

Oxford Instruments plc (LON: OXIG), a scientific technology provider, issued an interim trading update on October 13, 2025, indicating resilience amid a challenging global trade environment.

While first-half revenues are expected to decline by approximately 8% on an organic constant currency (OCC) basis, the company anticipates a stable full year, mirroring the prior year's performance.

The announcement reflects a tale of two divisions, with Advanced Technologies (AT) offsetting headwinds in Imaging and Analysis (I&A).

The company told investors that market turbulence, largely due to tariffs and global economic uncertainty, significantly impacted order intake in the I&A division.

Conversely, the AT division experienced robust order growth, driven by tailwinds in the compound semiconductor market and expansion into volume manufacturing customers.

At the group level, first-half order intake rose just over 1% OCC compared to the previous year, showcasing a recovery from a Q1 decline of around 3% to a nearly 6% growth in Q2.

The book-to-bill ratio for the first half is expected to be approximately 1.1, compared to 1.0 in the prior year.

H1 revenues are anticipated to be down around 8% OCC versus the prior year (down 10% on a reported basis).

The high contribution margin on I&A revenue lost in H1 is expected to result in an OCC adjusted operating profit margin for the period of around 14.5% (13.5% on a reported basis).

A stronger H2 margin performance is expected versus H1 as modest revenue growth resumes.

Consequently, on an organic constant currency basis, the Group's full-year revenue, adjusted operating profit (AOP), and AOP margin are expected to be similar to the prior year.

Driver Breakdown:

• Compound Semiconductor Strength: The AT division continues to benefit from strong demand, especially in augmented reality and datacomms applications.
• Tariff Mitigation: Oxford Instruments has successfully re-priced the majority of its US open order book to mitigate the profit impact of tariffs.
• Cost Savings: Business improvement actions in the Belfast imaging business, including workforce reductions and a refocused product portfolio, are expected to positively impact margins in H2.

“The start of our financial year coincided with the beginning of a turbulent time in our markets, as others in the sector have commented on,” stated Richard Tyson, CEO. He further added that he is proud of the team's proactive and customer-focused approach to this very dynamic global trading landscape, driving an improving picture in Q2.

The sale of the NanoScience business is progressing well and is expected to be completed during Q3, in line with guidance. This divestiture could provide additional capital for strategic investments or shareholder returns.