Oxford Instruments

What does the company do?

Oxford Instruments, the provider of high technology instrumentation products and services to industrial and scientific research communities, was added to the portfolio in the year. The company has an approximate market capitalisation of £1.1bn. Oxford Instruments is a technological leader in the products it provides and strong commercial leadership has ensured strong customer relationships and high barriers to entry. The company is well diversified by end market, customer type and geographically which helps mitigate volatility and we think its strong pricing power will be helpful in the current environment. The financials of the company are on an improving trajectory with revenue growth aligned to the long-term growth in research and development budgets and expanding margins. The company has a net cash balance sheet and high returns. We added the stock to the portfolio following the withdrawal of a bid for the company from Spectris which created a particularly attractive entry point for the valuation of a company with strong fundamentals and good prospects over the medium to long term.