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Qi3 Insight

Let’s Beat the Market

By Robin Higgons

Despite the continuing economic gloom, some companies have seen this downturn as an opportunity to improve productivity and to outperform the market in sales, profit and share price. For instance, Oxford Instruments announced record annual results earlier this month, with strong performance across all markets and territories.

In November last year, Qi3 produced a report called – Intriguing Instrumentation: Some lessons from an industry that has outperformed during the recent recession, which looked at 15 of the larger UK quoted instrumentation companies (including Oxford Instruments) that beat market expectations. The paper highlighted that these businesses followed a pattern of through the last four years;

1) Swift reaction – They reacted speedily to the downturn, by cutting cost, reducing debt, stalling acquisition activity and improving operating performance.

2) Organic growth, and product development and market development – They focused on organic growth, new product development and exports – particularly to China and other markets which are expanding faster than the West.

3) Utilise cash reserves to return to acquisition activity – They used their strong cash reserves in 2010/11 to return to acquisition activity in earnest. As a result, many of the new acquisitions have strong strategic relevance in that they help bolster the companies’ presence in emerging markets and provide additional product ranges that can be offered through their global distribution channels.

The preliminary results announcement from Oxford Instruments showed many similarities with the strategic pattern we outlined. Mail me to request a copy and see how you can beat the market.

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