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

Quantum computing is a bit like the Formula 1 of the technology world: faster, more spectacular and a lot more complex than traditional computing. Quantum computing is expected to transform the fields from making cars to treating cancer. By 2035, quantum computing could be a £1 trillion industry – but the kit needs to be kept exceptionally cold. Oxford Instruments specializes in cryostats, instruments that make the temperature as cold as possible in space.

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

Cryostats are just one product in the portfolio. Ultra-powerful microscopes help in the development of new medicines and advanced industrial materials. And advanced manufacturing kits are critical to the development of next-generation semiconductors.

Oxford instruments not only produces all this equipment, but is also known for its analysis and software tools that can search data and explain what it means.

Last week’s results highlighted both recent performance and, perhaps more importantly, future growth. CEO Richard Tyson was appointed last October and is determined to make his mark, after ten years at the top of components specialist TT Electronics and an entire career in technology.

Tyson revealed a 10 percent increase in sales to £470 million and a 2 percent increase in profits to £83 million for the year to last March. Tyson unveiled a new strategy to boost sales, improve margins and attract new commercial customers.

The company is split into two divisions, one focused on imaging and analytics, the other on cryogenics and semiconductors. The first is already delivering rapid growth, but could perform even better, according to Tyson. The second needs work, especially after last year’s decision to leave China, which was an important market. But progress has already been made, orders are piling up and the company recently opened a shiny new semiconductor factory in Bristol, almost the size of two football fields.

Last week a small acquisition was also announced, a Swiss company specialized in image processing tools. More deals are likely in areas that complement Oxford Instruments’ existing range and drive business with companies, universities and researchers.

Estate agents are optimistic about the future, expecting turnover of £520 million and profits of £90 million by March 2026. Dividends are also expected to grow, from 20.8p last year to 21.7p this year and 23p next year.

Midas judgment: Oxford Instruments is a force for good: a British company whose world-class equipment helps discover new medicines, fuel scientific discovery and make waves in industry. At £26.25, the shares deserve a rise. A purchase for the longer term.

Traded on: The main market ticker: OXY Contact: oxinst.com or 01865 393200