Conclusion of its FSP On 2 March, the Board first announced a Formal Sales Process (FSP) and today announces that it has unanimously decided to conclude this process. This is after reviewing a ‘number’ of proposals with the Board unanimously concluding that ‘none would meet the objectives of delivering an outcome that satisfactorily met the interests of all stakeholders’. The FSP would include the sale of Renishaw’s founders’ combined c53% stake. Sir David McMurtry and John Deer have indicated to the Board that they remain committed to Renishaw and have no intention of selling their shares on the market for the foreseeable future. Current trading Strong trading in its final quarter (Jun year-end) prompts renewed FY21 management guidance of revenues between £562m and £567m, and adjusted PBT between £116m and £121m (previous guidance, first set on 26 March, was for revenues of £540-570m and PBT of £105-125m). Renishaw finished its financial year with a record order book, suggesting strong momentum moving into its FY22. Investment case Renishaw’s status as a provider of capital equipment – albeit aligned with automation and enhanced precision – exposes it to volatile demand patterns in both traditional and new markets. Renishaw is exceptionally strong in its markets, its patent portfolio and financially, and all its cyclical exposure should turn positive at some stage. However, high valuation multiples, low visibility and aerospace disruption leave the shares looking vulnerable in our view. Next catalyst: prelims on 30 September 2021.