Key result highlights include: a strong financial performance, strong demand in its core markets and geographies, and unchanged expectations despite prolonged order conversion, supply chain and cost headwinds. First half results Revenues grew by 21.2% (+26.8% at constant currency) to £170.1m. The adjusted operating margin expanded 70bps to 18.0%, increasing operating profit by 25.9% (+28.0% at cc) to £30.6m. EPS increased 25.6% to 41.2p. An interim dividend of 4.4p is a 7.3% increase compared to last year. Cash conversion of 48% reflects an increase in inventories to support order intake and mitigate supply chain disruption, timing of shipments and a resumption in capex. The balance sheet remains strong with net cash of £70.1m. Outlook Orders grew 18.3% at cc and the order book was 13.3% higher y-o-y providing good visibility for the year ahead. Management expects supply chain pressures to moderate conversion of orders to revenue and drive cost inflation in the second half, but given the strong opportunity pipeline and order book, their expectations of further progress in the year are unchanged. Management suggests that the consensus FY22E adjusted operating profit is £62.9m (INVe £63.2m). Note: on 21 September the trading update suggested a FY22 outcome ahead of the then top of the range £63.0m. Investment case We view Oxford Instruments as a pioneering company with scope to improve the structure of the group through portfolio and operational adjustments. Select M&A enhances the ‘tidy up’ strategy of the business model and it is encouraging to see margin enhancement continuing. We admire the business model and its prospects, but believe this is reflected within its current valuation multiples. We remain at Hold. The shares trade on a FY22E PE of 28.7x and EV/EBITDA of 17.5x, falling to 28.0x and 16.6x respectively in FY23E.