Good morning and welcome to Oxford Instruments' full year results. Gavin and I are pleased to be presenting to you from our office in Oxford. While the virtual format of this presentation is new, we'll be following the usual agenda. I will start with the highlights, provide a progress update on our Horizon strategy, and describe our response to the COVID-19 pandemic. I will then hand over to Gavin, who will cover the financial results, before returning for an operational review and then closing with summary and outlook. Moving straight to the highlights, we continue to make positive progress driven by our Horizon strategy, which continues to provide good underlying growth and margin improvement. However, the full year financial performance of the group was subdued by the COVID-19 pandemic, with extensive disruption in the Q4.
This led to a number of orders being delayed and customers being unable to receive shipments and proceed with installations. The resulting impact was equivalent to approximately two weeks of revenue. This offset much of the progress we had made in the preceding three quarters, resulting in marginal growth for the year as a whole.
In light of the emerging COVID-19 situation, we developed a rapid and agile response plan, prioritizing the health and well-being of our employees while providing ongoing support for our customers, maintaining business continuity, and securing a positive future for the group. Our customer-centric approach, combined with improved commercial practices and operational excellence program, provided tangible financial gains in the year. The transformation of our customer services approach drove strong order and revenue growth, with improved profitability for the service and healthcare sector.
The group has had a strong net cash position of GBP 67 million, supported by positive cash collection and the proceeds from the divestment of OI Healthcare and the sale of our share in Scienta Omicron. Moving to an update on our strategy, the Horizon strategy has enabled the group to make progress, driving underlying growth and improved profitability, and is equipped as well to respond to the COVID-19 disruption. Furthermore, the strategy provides the foundation for long-term sustainable growth and margin improvement.
We continue to transform the organization into a customer-centric, market-driven group. By further improving our market segmentation by end application, we have been better placed to identify new customers and realize the full value our products can bring. By exploiting our enhanced market insights, we are developing richer product roadmaps and have improved the impact of recently launched products.
To accelerate the delivery of our priority projects, we have increased the deployment of our technical teams across business units and the collaboration with external partners. Further improvements to commercial practices across the group, combined with gains from our operational excellence program, have supported constant currency margin growth in the research and discovery and service and healthcare sectors, with underlying constant currency margin growth within the materials and characterization sector being more than offset by the impact of COVID-related shipment delays. In the year, we launched our customer service transformation, which includes how we are organized internally, our core capabilities, and how we work with and support our customers. This has driven growth and improved profitability from services related to our own products.
In the second half of the year, we divested our US OI Healthcare business and our share in the Scienta Omicron joint venture, further enhancing our focus on attractive markets and margin expansion. Turning to our COVID-19 response, as previously mentioned, the extensive disruption caused by the coronavirus in the Q4 led to a number of orders being delayed and customers being unable to receive shipments and proceed with installations. The resulting impact was equivalent to approximately two weeks of revenue.
In light of the emerging COVID situation, we developed a phased approach, allowing timely and agile responses to the rapidly changing business conditions. Throughout, we have prioritized the health and well-being of our employees and supporting our customers and supply chain partners. Our approach has allowed us to maintain business continuity where possible and appropriate and continue to progress our strategic new product developments.
I would like to thank all employees for their contribution throughout the year and, in particular, for their agility and resilience in recent months as we've managed through this unprecedented situation. Our early actions and approach enabled our manufacturing sites to remain operational throughout the peak of the disruption, albeit at a reduced capacity, apart from a short period of closure at our two US sites. This was made possible by enabling safe working environments, following social distancing guidelines, introducing shifts, and implementing working from home for all employees who could do so. Our supply chain has remained robust throughout the disruption, benefiting from the investments we have made in creating long-term partnerships with fewer suppliers as part of our operational excellence program.
I'm extremely proud of the role that Oxford Instruments has played during these exceptional circumstances, with a number of our products and key enabling technologies directly contributing to the global fight against coronavirus and in supporting essential services. At the start of the new financial year, we developed our global recovery phase. This includes the preparation and implementation of adapted business practices, recognizing that ongoing business throughout the protracted global recovery will both require and benefit from new approaches.
Our hybrid workplace model provides clear operating guidelines for each of our sites, depending on the local situation. In response to the uncertainty regarding the timing and shape of the economic recovery, we have taken a number of cash management and cost containment measures to protect the financial health of the business and job security of our employees.
These include a temporary reduction in executive salaries and board fees, a delay of the annual pay review for all but the lowest paid employees, a referral in the payment of bonus schemes related to the previous year, and suspension of the interim dividend. We have also implemented a freeze on all non-time critical recruitment and CapEx spend, and are utilizing available government business support and job protection schemes where these are appropriate to our situation.
With regard to end markets, we believe that the underlying growth drivers remain robust and should not be weakened in the longer term by COVID-related disruptions. In addition, the progress we've made over the past few years through our Horizon strategy has significantly improved the performance and capabilities of the group. Combined with our strong balance sheet, the procedures, disciplines, and infrastructure that we now have in place provide the foundation and resilience to successfully navigate through the current challenges. I will now hand over to Gavin for the financial review.
Thank you, Ian. In January, the group disposed of its minority stake in the Scienta Omicron joint venture. In the following month, the group completed the disposal of its healthcare business in the US. Given its materiality to the group, OI Healthcare has been reclassified as a discontinued operation for this financial year and comparative period. Reported revenue grew by 1.1% to GBP 317 million.
On a constant currency basis, revenue was down by just under 1%. Customer disruption from COVID-19 meant that we were unable to complete a significant number of product shipments and installations in the final quarter, with approximately two weeks' equivalent revenue being delayed to the following financial year. Reported adjusted operating profit grew by 5.9% to GBP 50.5 million, assisted by a currency tailwind of GBP 3.3 million. Excluding currency effects, AOP declined by 1%. The adjusted operating margin increased by 70 basis points, from 15.2% to 15.9%.
The margin on a constant currency basis was 15.1%, equivalent to a decline of 10 basis points. A net asset position at the year-end on the U.K.-defined benefit pension scheme resulted in us not incurring any pension financing charges. This, along with a refund of overpaid interest from previous years, contributed to a decrease in net finance costs to GBP 1 million. Adjusted profit before tax increased by 8.8% to GBP 49.5 million. Amortization of acquired intangibles of GBP 8.7 million is a non-cash charge and treated as an adjusting item. Other non-recurring items were a net charge of GBP 0.6 million. The sale of our shareholding in Scienta Omicron realized a gain of GBP 6.5 million. In addition, an accounting credit of GBP 0.6 million arose from the termination of the U.S.-defined benefit pension scheme.
We've reviewed our intangible development assets to evaluate the ongoing applicability of some historical balances, as well as assessing the impacts of COVID-19 on short-term order opportunities. As a result, we have impaired development intangible assets by GBP 7.1 million. The charge mainly impacts the materials and characterization sector. The remaining non-recurring costs of GBP 0.6 million are primarily attributable to a one-off write-down of inventory built up over time ahead of an in-year implementation of a new ERP system for one of our US-based businesses.
We also treat the uncrystallized mark-to-mark movement on derivative financial instruments that are hedging future transactional currency exposures as an adjusting item. At the 31st of March, the spot rate for sterling against the US dollar was lower than the average rates on our outstanding hedges, contributing to a charge of GBP 1.4 million.
Reported profit before tax from continuing operations was GBP 38.8 million against GBP 34.3 million in the previous year. Continuing adjusted basic earnings per share grew by 12.7% to GBP 0.70. One of many prudent cost containment measures was to suspend the payment of the interim dividend. As a result of continued uncertainty caused by COVID-19 on our markets and future trading performance, the board will defer a decision on the declaration and payment of dividends until later in the year. Looking now at revenue by sector, reported revenue for materials and characterization was broadly flat, falling by 1.9% at constant currency due to several compound semiconductor processing tools, along with a smaller number of atomic force microscopes being delayed due to the closure of customer sites following COVID-19.
A constant currency decline of 1.1% in research and discovery was also adversely impacted by being unable to complete planned high-value installations of our complex magnet and cryogenic systems in Asia ahead of the year-end, owing to customer site closures and travel constraints on service personnel. Revenue growth from the service of our own products led to an increase in reported revenue of 5.7%, 3.7% at constant currency for service and healthcare. With total orders in the year of GBP 336 million, our book-to-bill ratio was 1.06. Moving to revenue by territory, in Europe, we have seen constant currency revenue growth of 4.7% due to strong sales for our plasma processing solutions and atomic force microscopes. In North America, we saw constant currency growth of 3%, driven by an improvement in demand for our electron microscope analyzers and optical imaging systems.
For Asia, we saw a constant currency decline of 6.5% as the region was most impacted during the final quarter by the implications of COVID-19 on shipments and installations. China represented 22% of group revenue for the year. The order book has grown by 14.2% since last year on a reported basis and 12.1% at constant currency. We have witnessed good constant currency growth of 20.1% for materials and characterization and 7.2% for research and discovery. These growth rates have been supported by revenue not recognized in the year, owing to delayed shipments and installations. Turning to adjusted operating profit by sector, on a group basis, lower contribution recognized in the year on delayed shipments and installations has offset underlying margin improvement from operational excellence and other Horizon programs.
Materials and characterization margin declined by 10 basis points to 15.3%, with plasma technologies and Asylum Research margins impacted by shipment delays from customer site closures. At constant currency, the margin was 14.6%, a decline of 80 basis points. Adjusted operating margin for research and discovery increased to 11.5%, growth of 120 basis points. At constant currency, the margin was 10.7%, an increase of 40 basis points. Margin growth was held back by being unable to complete the installation of some high-value complex magnet and cryogenic systems, owing to site closures and travel restrictions. Continued focus on service revenue lifted service and healthcare margin by 120 basis points to 27.9%. At constant currency, margin grew by 40 basis points. Turning now to the cash flow, the group made adjusted earnings for interest, tax, depreciation, and amortization of GBP 60.4 million.
The working capital of GBP 10.1 million reflects an increase in inventories of GBP 2.3 million, with additional finished goods due to shipments held over the year-end following closure of customer sites. Receivables declined by GBP 3.3 million, and payables and customer deposits increased by GBP 9.1 million, supported by a commercial focus on improving the percentage of deposits on long lead-time products. Cash spend on research and development was GBP 26.8 million, of which GBP 2.8 million was capitalized in the year. Disposal proceeds include the sale of our shareholding in Scienta Omicron and the US healthcare business. Pension payments of GBP 10 million include payments of $3.4 million to the US-defined benefit pension scheme to fully extinguish all liabilities of the scheme. At the year-end, we recorded an accounting net asset from our defined benefit pension scheme of GBP 30.7 million.
We will continue to pay index-linked contributions of approximately GBP 8 million per annum into the U.K.-defined benefit pension scheme until about 2025 in order to eliminate a deficit on a technical provisions basis. Cash generated from operations of GBP 62.3 million represents 124% cash conversion against 100% last year. Net cash was GBP 67.5 million at the end of March, up from GBP 6.7 million at the end of March last year. As regularly presented, the business has a large exposure to foreign currency fluctuations. This chart shows the long US dollar, euro, and yen exposures and short sterling and Chinese renminbi position. As you can infer from the previous slide, the group's financial results will be subject to currency fluctuations. We maintain a hedging program against a proportion of our transactional exposure, covering a period of 12-18 months forward.
This is the impact of mitigating currency movements in the near term. In the full year, we recorded a currency benefit of GBP 3.3 million to operating profit. For the full year 2020-2021, with current hedges as at the end of March and assuming no change from end March spot rates, we would expect a benefit against the year 2019-2020 to adjusted operating profit of about GBP 2 million. As an example, sensitivity and appreciation of 5% in sterling against all our major trading currencies from spot rates at the end of March would result in a headwind of GBP 1.5 million to profit. The actual currency impact will be dependent on currency volumes and mix, as well as currency rates at the time of shipments and customer acceptances, and is therefore subject to a high degree of uncertainty.
To summarize key financial highlights from the year, reported revenue and AOP were ahead of last year and broadly equivalent at constant currency, despite the effect of COVID-19 on trading in the Q4. We entered the pandemic period with a healthy balance sheet. Net cash at the balance sheet date was GBP 67.5 million. We have GBP 105 million of undrawn facilities on a committed RCF, resulting in headroom of approximately GBP 200 million. During the first two months of the current year, we have seen a small rise in net cash to GBP 70 million. We have taken several actions to protect our cash balance. This includes suspension of dividend payments. The dividend will remain under review as we progress through the year and are able to provide guidance on the implications of COVID-19 on our trading performance. I'll hand back to Ian.
Thank you, Gavin. Let me now turn to our operations review. As mentioned, we report in three sectors: materials and characterization, research and discovery, and service and healthcare. The group delivered marginal growth in the year, with the impact of COVID-19 offsetting a strong underlying revenue, operating profit, and margin performance. Our customer-centric approach supported underlying growth from both commercial and academic customers, with a proportion of revenue from commercial customers being broadly in line with the previous year at 48% of sales. We delivered good underlying order growth across each sector, with a strong growth in order book supported by delayed shipments and installations. Our reach across a range of end markets, combined with our engagement through the technology cycle, reduces our exposure to any market-specific disruption.
Looking at our end markets, we are positioned to address a broad and diverse range of attractive end markets and industrial sectors with long-term fundamental growth drivers. These remained positive in the year, with underlying revenue growth across each of our customer segments. However, we are mindful that these markets will not be immune to the current global economic disruption in the short term. In the year, we achieved strong growth in Europe and North America, which were only modestly impacted by the coronavirus.
In Asia, disruptions in shipments and installations significantly impacted revenue, resulting in a constant currency decline. Without the disruption, China and the region as a whole would have delivered growth in the year. Our customer-centric approach enabled expansion into new applications and will provide the mindset and methodology to find additional positive end markets throughout the ongoing disruption.
Moving to our individual sectors and starting with Materials and Characterization. The sector represents 43% of group revenue and comprises Asylum Research, NanoAnalysis, and Plasma Technology. The sector provides products and solutions for the imaging and analysis of materials down to the atomic level, as well as the fabrication of semiconductor devices and structures through our range of etch and deposition systems. Our products accelerate our customers' applied R&D and improve their capabilities and productivity in high-tech manufacturing.
Underlying revenue and profit growth were both offset by delayed shipments, but end market conditions generally remained positive. Order growth was supported by positive academic funding across Europe and North America. We saw increased demand within each of our three main segments of semiconductor communications, advanced materials, and energy and environment. Performance in the period was enhanced by tailoring our product offerings, allowing growth into new customer applications.
This offset the continued weakness from silicon semiconductor, electronics, and automotive end markets. Turning to the customer market segments and starting with semiconductor and communications, this segment remains a significant focus for the sector. Continued weakness in the silicon semiconductor market led to a reduction in sales of our imaging and analysis products. This decline was more than offset by strong growth of our compound semiconductor etch and deposition systems, driven by the global demand for improved connectivity, increased communications, and a greener economy.
For example, our products have been directly used in the development and manufacture of advanced optical devices, such as lasers, used within hyperscale data centers to enable faster and more efficient transfer of vast volumes of data. Our silicon carbide processing solutions are supporting customers to manufacture more energy-efficient car battery chargers, also enabling faster charging times and longer vehicle range. The demand for improved power conversion also exists in consumer electronics, but cost sensitivity within the market excludes the use of expensive silicon carbide wafers and has driven growth in our gallium nitride process solutions.
These are being used to manufacture more efficient USB charging devices, which deliver significantly faster charging of mobile phones, tablets, and laptops. Moving to advanced materials, we have achieved strong growth in the advanced materials segment, supported by the demand to develop, control, and repeatedly manufacture stronger, lighter, and higher-performing materials across a broad range of diverse markets and applications. These include the use of high-performing alloys within the aerospace and automotive industries, which provide more durable, lighter, and safer vehicles that are more fuel-efficient and consume less raw material.
Advanced materials such as graphene are also providing potential solutions for the provision of clean water, the capture of carbon emissions, and the production of more robust, flexible solar panels. Our imaging solutions enable the control and measurement of material purity, film thickness, and reproducibility. We delivered good growth across the energy and environment segments, with applications including photovoltaics and batteries.
We also had strong growth into leading forensic laboratories around the world, supported by the increased speed and accuracy of our system and the achievement of industry accreditation in the year. While still a relatively small proportion of the sector, healthcare and life science applications represent an opportunity for future growth, specifically within bioimaging. Here we are building on our expertise and knowledge from other applications to enable customers to investigate and characterize biological materials.
For example, our atomic force microscopes have been used to image viruses, and our materials analyzers are being used to better understand the seed and cell structure in plants, including their capture of air pollutants. Moving to our second sector, research and discovery, the sector representing 40% of group revenue comprises Andor Technology, Magnetic Resonance, NanoScience, and X-Ray Technology.
The sector provides advanced solutions that create unique environments and enable imaging and analytical measurements down to the molecular and atomic level, used predominantly in fundamental and applied research, with a high proportion of customers with academic or government funding representing 65% of sales. The sector continued to make good progress in the second half of the year, building on a positive first half. However, significant COVID-19-related delays to the shipment and installation of systems more than offset good underlying revenue growth.
Despite the impact to revenue, operating profit growth and margin improvement reflected continued gains from our ongoing operational excellence program and improved commercial practices. We had strong growth into quantum technology and research and fundamental science segments with increased demand for our scientific instruments, cameras, cryogenics, and high magnetic field platforms.
Growth across a broad range of healthcare and life science applications was offset by a decline in sales of our optical microscopy systems against a strong comparator and increased competitor activity. Looking at customer segments and starting with healthcare and life science, the continued drive to improve the health and well-being of society is leading to increased investments to improve the understanding of fundamental disease mechanisms and detection and the development of new therapies and medicines.
Our market-leading cameras, X-ray tubes, and laser systems have supported advances in this area and led to strong growth among customers and our OEM partners who use our key enabling technologies across a broad range of applications, including gene sequencing, diagnostic testing, drug discovery, and cancer research. A number of our products have been critical in the global response to the COVID-19 pandemic, having been used directly to study the virus, determine its structure, gene sequence, and mutations, helping to develop vaccines as well as within diagnostic testing equipment.
Advanced microscopy techniques with improved resolution and the ability to interrogate and interpret large data sets remain fundamental to developing advanced treatments for cancer and neurological disorders such as Parkinson's and Alzheimer's. This has driven growth through our advanced visualization and data analysis software.
Moving to quantum technology, continued investment from governments and corporates seeking to develop quantum computers, secure communication, enhanced sensors, and advanced imaging systems drove growth across our cryogenic and materials analysis platforms and scientific cameras. Towards the back end of the year, we launched our new cryogenic platform, which enables higher productivity and measurement capabilities to support the development of practical quantum computers.
Within research and fundamental science, increased international funding and associated academic activity drove strong underlying growth across our portfolio of scientific instruments and high magnetic field platforms. Increased investment in astronomy was driven by heightened interest in exploration of the universe, the tracking of space debris to avoid collisions with billion-dollar satellites, and monitoring solar activity to protect satellite and Earth-based communications. This has led to an increased demand for our high-end scientific cameras.
As an example, astronomers in Hawaii captured the most detailed images ever recorded of the sun's surface using our new large-area camera. In the energy and environment segment, sales growth within the food industry for our analyzers used to measure the fat content and consistency between batches was offset by ongoing weakness for our systems used within oil exploration.
Moving to our final sector, service and healthcare, this sector comprises the group support services related to our own products and the service and support of third-party MRI systems in Japan. In the second half of the year, we divested the OI Healthcare business with operations based in North America. As part of our Horizon strategy, we initiated the transformation of our customer services approach, changing the way in which we provide support to our customers, our capabilities, as well as expanding the breadth of service product offerings.
This has included reorganizing resources across our business units and regions to better leverage our scale, providing better response times, improved efficiencies, and an increase in our global presence. As part of the transformation, we are taking a customer-centric approach, providing tailored service products for dedicated end market applications to improve our customers' capabilities and their productivity. Our new approach has led to increased demand for our services, supporting strong order and revenue growth with improved profitability.
Our support and service of MRI systems within Japan remains a key part of the sector, with performance broadly in line with the previous year. Our development and utilization of remote servicing and live assist capabilities that enable augmented reality service support and online diagnostics have proved invaluable in supporting our customers during the COVID-19-related business and travel disruption.
Finally, moving to our summary and outlook, we have made good progress in the year with the implementation of our Horizon strategy, which, combined with our strong balance sheet, continues to provide the foundation for long-term sustainable growth and margin improvement. We have positioned the group to be a leading provider of high-technology products and services to the world's leading industrial customers and scientific research communities to image, analyze, and manipulate materials down to the atomic and molecular level.
This allows us to live up to our purpose of facilitating a greener economy, increased connectivity, improved health, and leaps in scientific understanding. The coronavirus continues to impact trading in the first two months of the year, with cumulative orders 3% below a weak comparator period, with growth in Asia of 19%, offsetting a reduction in Europe and North America of 23% and 7%, respectively.
A strong uplift in orders of our compound semiconductor process solutions has offset a reduction in orders for our higher-margin scientific cameras and optical microscopy products, which have been severely impacted by disruption across academic customers. Group revenue is 3% above last year, assisted by delivery of shipments that were held over from the year-end due to COVID-19. We have an active pipeline of sales opportunities, reinforced by our digital marketing and online sales presence, but activity levels within academic institutions remain low due to continued customer site closures. It will take some time to understand the impact and longevity of this disruption, and we will continue to take measures to adapt and protect our business throughout this period. Once we've attained an improved level of visibility, we'll be in a position to provide guidance on the current year's expected financial outcomes.
Our strategy is to operate in attractive markets with long-term fundamental growth drivers and to focus on segments where we can maintain leadership positions. With the increasing demand for electric vehicles and digital communications infrastructure and the need for improved energy-efficient devices, medicines, and diagnostic tools, we are confident that our end markets are resilient and should not be weakened in the long term by COVID-19 headwinds. That concludes the presentation of full-year results. Thank you for your attention.