MIDAS SHARE TIPS: That’s cool… how cryogenics expert has formula to transform your funds

Quantum computing is a little like the Formula One of the technology world – faster, showier and a whole lot more complex than traditional computing. Expected to transform fields from car-making to cancer treatment, quantum computing could be a £1 trillion industry by 2035 – but the kit needs to be kept exceptionally cold. Oxford Instruments specialises in cryostats, tools that drive down temperatures to as cold as outer space.

Spun out of Oxford University in the 1960s, Oxford Instruments has developed a reputation for leading technology and scientific expertise among academics, researchers and top companies the world over.

Cryostats are just one product in the portfolio. Ultra-powerful microscopes help to develop new drugs and advanced industrial materials. And sophisticated fabrication kit is critical to the development of next-generation semiconductors.

Oxford Instruments does not just produce all this equipment, it is also famed for its analysis and software tools that can sift through data and explain what it means.

Results last week highlighted both recent performance and, perhaps more importantly, future growth. Chief executive Richard Tyson was drafted in last October and is determined to make his mark, after a decade at the top of component specialist TT Electronics and an entire career in engineering.

Looking ahead: Brokers are optimistic about the future, looking for sales of £520 million and profits of £90 million by March 2026

Unveiling a 10 per cent increase in revenues to £470 million and a 2 per cent increase in profits to £83 million for the year to last March, Tyson unveiled a new strategy to drive sales, improve margins and attract new commercial customers.

The company has been split into two divisions, one focused on imaging and analytics, the other on cryogenics and semiconductors. The first is already delivering pacy growth but could do even better, according to Tyson. The second needs work, particularly after a decision last year to move away from China, which had been a key market. But progress is already under way, orders are building up and the firm recently opened a sparkling new semiconductor factory in Bristol, almost the size of two football pitches.

A small acquisition was announced last week, too, a Swiss business specialising in imaging tools. More deals are likely in areas that complement Oxford Instruments’ existing range and boost business with companies as well as universities and researchers.

Brokers are optimistic about the future, looking for sales of £520 million and profits of £90 million by March 2026. Dividends are expected to grow, too, from 20.8p in the year just ended to 21.7p this year and 23p next.

Midas verdict: Oxford Instruments is a force for good – a British company whose top-notch kit is helping to find new drugs, drive scientific discoveries and make waves across the industrial plain. At £26.25, the shares deserve to move higher. A long-term buy.

Traded on: The main market Ticker: OXIG Contact: oxinst.com or 01865 393200 

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