Welcome to Renishaw's results presentation for the first half of financial year 2024. I'm William Lee, Chief Executive, and I'm joined today by Alan Roberts, our Group Finance Director. I'm going to start by taking us through a review of business performance for the first half of the year. I'm pleased to report another solid performance overall in challenging trading conditions. We had a revenue reduction of 5%, but some of this is due to currency headwinds. If you look at constant currency, revenues were only 2% lower. When we start to look at the segments, then actually in manufacturing technologies, revenues were down 6% overall. If we look at what's making this up, then what we saw here was solid growth in industrial metrology, most notably really pleasing in our Equator flexible gauges and our machine tool product lines.
We are continuing to see weak demand from the semiconductor equipment sector. This has been stable for the last six months, but is below the previous year. In the analytical instruments and medical devices segment, it was very pleasing to see 16% growth. This was really driven by our Raman Spectroscopy business. If we look at regional performance, then it was pleasing to see a return to growth in the APAC region, which delivered 6% growth at constant currency, underpinned by strong growth in industrial metrology, especially into the consumer electronics sector. However, this is the region where many of our semiconductor equipment builder customers are located, and continued weak demand in this sector does remain a drag on growth. Conditions in the EMEA have been tougher, and revenues were down 6% at constant currency.
Spectroscopy was a positive, but this was more than offset by continued low demand for positioning encoders and also weaker demand in the first half for additive manufacturing equipment, compared with quite a strong period in the previous year. Revenue in the Americas was down 13% at constant currency. We do, however, continue to make good headway with sales and metrology systems, but this was offset by weaker sales of other product lines. Taking a look at profitability next, our adjusted PBT was 23% lower at GBP 56.5 million. This fall in profits is concentrated within the manufacturing technology segment, and here profits are down 31% on 6% lower revenues. By contrast, analytical instruments and medical devices, profitability has improved significantly, as a result of the stronger revenues there.
While we are experiencing these tougher market conditions, we are continuing to control our fixed costs carefully, but we are balancing this with investment in the exciting opportunities that we have for longer term growth. We'll talk through these later, but first, I'm gonna hand over to Alan, who's gonna give more detail on our financial performance.
Thank you, Will, and good morning, everybody. As Will has already reported, we achieved revenue for the first half of the year of GBP 330.5 million, compared to GBP 347.7 million last year. This is 5% lower at actual exchange rates and 2% lower at constant exchange rates. Adjusted profit before tax for the half year was GBP 56.5 million, compared to GBP 73.5 million last year, and I'll be providing more detail on this shortly. This year, we have no differences between statutory and adjusted profit before tax. The effective tax rate of 20.1% compares to 20% for the previous full year. We anticipate an increase in Patent Box benefits to largely offset the increase in the UK corporate tax rate applicable to our financial year.
The resulting adjusted earnings per share was 62.1 pence. The board has agreed to maintain an interim dividend of 16.8 pence per share, which will be paid on the 9th of April. By way of note, I am pleased to report that we have successfully completed the insurance buy-in of the UK defined benefit pension liabilities during the period, which mitigates the majority of funding risk. The GBP 32 million difference between the IAS 19 liabilities and the insurance premium has been reflected as an expense in the other comprehensive income and expense statement. The profit bridge shows the movements reconciling the adjusted profit before tax of GBP 73.5 million for the previous year to GBP 56.5 million this year. Labor costs are our largest cost.
We have continued to take a cautious approach to recruitment during the year, and our total headcount of 5,166 is similar to 30th of June 2023 and 31st of December 2022. We have continued to invest in our early careers programs with 100 graduates and 60 apprentices joining in September, whilst headcount was reduced by 99 through a mutually agreed severance scheme in the UK Labor costs have increased by 2.4% to GBP 136.5 million for the period, primarily reflecting January 2023 pay reviews and nearly GBP 1.9 million of severance scheme payments. We've controlled engineering, distribution, and administration costs, limiting the year-on-year increase to 3%. This includes an increase in third-party support costs in relation to our new global ERP system, Microsoft D365.
We successfully completed the first implementation during the period, and the rollout of this system will continue over the next few years. Our gross margin, excluding engineering costs for the period, was 61% of revenue, compared to 64% over the comparable period in the previous year. This change is partly due to a lower recovery of production overheads this year, as we have targeted inventory reductions whilst retaining manufacturing resource in expectation of demand increasing in the second half of the financial year. Currency rate changes have also had an adverse impact on gross margin. The effect of these has been partially offset by further targeted price rises. We remain committed to our long-term strategy of developing innovative and patented products to create strong market positions.
During the first six months of this year, our gross engineering spend, including research and development, increased by 2.4% to GBP 51.5 million. Net engineering spend of GBP 45.4 million compares to GBP 46.1 million last year. Within this, the R&D tax credit has increased by GBP 1.5 million, primarily as a result of the rate applicable to qualifying spend increasing from 13% to 20%. Below operating profit, net financial income has increased by GBP 2.1 million, mostly relating to an increase in interest on bank deposits, while we have seen profits from joint ventures rise by GBP 0.7 million.
Turning to cash flow, this bridge tracks the movements from our opening cash and bank deposits balance of GBP 206.4 million at 1 July to the closing position of GBP 178.3 million at 31 December . Of note, within working capital movement, we have reduced our inventory balances by GBP 11.4 million since 30 June , largely reflecting targeted reductions in components and sub-assemblies for our optical encoder products as supply chains have normalized. We have invested GBP 40.4 million in capital expenditure, of which GBP 26.2 million is for property and GBP 14.2 million is for plant and machinery. More on this shortly. We also paid taxes of GBP 12.2 million and the final dividend for fiscal year 2023 of GBP 43.2 million.
With an increase in second half trading anticipated, we are expecting cash balances to increase by the year end. We continue to make capital investments in our business to make sure that we have the capacity to respond to market opportunities as we grow. We have recently completed a major expansion of our manufacturing footprint. We have added two further halls to our largest factory in South Wales, which will together boost our global factory floor space by more than 50%. The solar arrays on the new halls will also add an additional 2.7 megawatts of energy self-generation. Over the next few months, we will be starting to occupy Hall 3, investing in new manufacturing equipment and transferring production of some of our physically larger products, including the AGILITY CMMs, AM machines, and the FORTIS encoders.
As planned, Hall 4 is mothballed until required in response to anticipated growth in the years ahead. This project has comprised the major part of our property spend over the last two years. Meanwhile, we are investing in new centralized warehousing in Germany to efficiently distribute our products within Europe. We have also consolidated our two sales and marketing operations in Brazil to one location following completion of our new facility. Looking ahead to the financial year as a whole, we expect capital expenditure to be similar to last year. I'll now hand you back to Will.
Thanks, Alan. I'm now going to talk through how we create value and our ambition for long-term growth. The first thing I'd like to highlight here is that we operate an organic growth model built on solving customer problems with innovative products, global service, and world-class in-house manufacturing. While we operate in cyclical markets, we aim for high single-digit average organic growth rates through the cycle. We have a track record of achieving this that stretches back several decades, and we have both the opportunity and the capability to continue to deliver this growth rate in the future. The diagram on the left-hand side of the slide shows our market position and the structural growth drivers that make our market so attractive. We operate in multiple geographic and end-market niches.
In aggregate, we estimate our addressable market to be around GBP 6 billion, so this provides us a very significant growth opportunity. What's more, we believe our markets have attractive through-cycle growth rates of at least 5%, underpinned by multiple structural growth drivers. These include ongoing changes in manufacturing technology, such as advances in machine performance and increased levels of automation, and we are also seeing sweeping changes in wider society, including decarbonization and digitization. The right-hand side of the slide shows how we supplement this underlying market growth with our strategy, which aims to deliver consistent outperformance. We have three key strategic priorities here. The first is growing our existing markets by driving up sensor fitment levels, cross-selling additional technologies to machine builders, and winning new customers to drive reoccurring revenues.
The second is increasing the value of the technology that we sell by moving up to systems-level products that include both hardware and software, as well as monetizing the data that we help our customers to generate. And thirdly, extending into new markets that have high levels of underlying demand growth and which are closely adjacent to our core. A recent example of this is our focus on robotics and industrial automation… If you take a look at the bottom right-hand portion of the slide, you'll see our established portfolio, which comprises the majority of our business, and which includes product lines where we are in a number one or number two position. You'll also see we have an emerging portfolio of newer product lines. We're operating in fragmented markets with significant opportunity to gain market share.
Over the next few slides, we'll take a look at the recent progress on each of our three strategic priorities. Let's now look at what we're doing to grow in our established markets. Firstly, let's take a look at our focus on increasing revenue per machine tool. So here we have a market-leading position in probes for machine tools, and we're now building a complementary position encoder revenue stream to increase our share of the wallet. Over the years, our machine tool probing business has been driven by rising sensor fitment levels, as manufacturers have increasingly sought to control and to automate their machining processes. To continue this trend, we have been refreshing our product range to meet evolving market needs. Over the last year, we've seen a strong take-up of our next generation QE series radio transmission.
This enables multiple probes to operate on the same machine, a growing need on five-axis machine tools, as well as extended probe battery life up to five years. At EMO in September 2023, we introduced the RMP24-micro, a miniature wireless probe that is targeted at small machining centers used in industries such as medical, watchmaking, and micro-mechanics. We are also continuing to win new customers for the NC4+ Blue Laser Tool Setter. This uses a short wavelength blue laser and advanced optics to deliver market-leading tool setting precision. As I mentioned earlier, we are now supplementing our probing business with complementary position encoder sales from our FORTIS range of enclosed optical encoders. We launched FORTIS three years ago and have been helping machine builders ever since to assess and integrate it into their designs.
It's now in serious production at 80 machine builders, and we expect this to be a significant growth driver for us in the years ahead. Another aspect of our strategy to grow our existing business is getting new machine builder customers. This is a long-term endeavor, but it brings the great benefit of recurring revenue streams that support our long-term growth. Here, we have a proven track record with our encoder product line. Winning customers takes patience and persistence, working closely with the machine builders to get designed into their new machines. In many cases, it is a combination of a highly capable encoder in a compact and easy-to-install package that tips their decision in our favor. Our second strategic priority is to increase the value of the technology we provide. On this slide, we'll focus on what we're doing in additive manufacturing before moving on to metrology.
A few years ago, we focused our AM strategy onto volume production applications in metal using Laser Powder Bed Fusion. We have concentrated on developing the most productive machines and working with customers who have the potential to scale to significant manufacturing volumes. Our RenAM 500Q, a quad laser, mid-sized metal 3D printer, is already established as the most productive machine in this popular size range. We have a growing base of customers, each using multiple machines to manufacture products in diverse markets, including medical devices, consumer electronics, aerospace, and automotive. We've now taken a significant further step forwards in terms of productivity with the new RenAM 500Q Ultra model, introduced back at the Formnext exhibition in November 2023. The Ultra features our innovative new TEMPUS technology, which enables the lasers to continue to fire whilst the recoater is spreading a new layer of powder.
As you can see from the video, the lasers follow the recoater while it's on its forward stroke, melting the powder as it is being spread. When the recoater moves back to collect more powder, the laser jumps over it and continues to melt the current layer. The effect of this is to utilize the recoating time productively, which is typically nine seconds per layer. Over the length of a build, which may comprise thousands of layers, this time saving can amount to several hours. We're really excited by the opportunity that Tempus brings to reduce AM part costs and further expand the range of applications where additive makes economic sense. Tempus is available on new machines and also as an upgrade for existing customers. In recent years, we've talked about how we are growing our metrology systems revenues.
This includes our Equator flexible gauges and our REVO five-axis multi-sensor metrology systems. We are expecting this growth to continue in FY 2024. We have seen notable success in the first half of the financial year for Equator, with growing demand from automotive, particularly EVs, machinery, example here being robotics, and consumer electronics component manufacturers. Software forms a key part of our metrology systems, and here we have a twin-track approach. Firstly, for some time now, we have opened up our Equator machines to third-party metrology software to enable users of these packages to program our hardware. This also enables us to access new routes to market through metrology systems distributors. The second strand to our strategy is to enhance the usability of our own metrology software.
We have recently introduced MODUS IM Gauge Control, which is focused on the Equator flexible gauge and is optimized for the measurement and process control of turned parts. This is the first of a new generation of Renishaw metrology software products that will streamline programming and enable us to expand our use of distributors to reach more customers. Renishaw Central, which we launched last September, is our new smart manufacturing data platform… provides connectivity, consolidating measurement and status data from metrology devices across the factory. This includes information from machine tool probes, gauges, and coordinate measuring machines. Central is an open platform, so whilst it takes advantage of Renishaw's enormous installed base of shop floor sensors, it is also open to third-party devices. This powerful source of manufacturing intelligence enables users to identify aspects of their processes that could be improved, rooting out inefficiencies and minimizing waste.
Okay, now, consolidating data is one thing, but we believe that making it actionable is critical. Our key point of difference is that we use measurement data to generate intelligent process control, creating active feedback that actually improves process outcomes. Following on from the launch of Central, we are now actively working closely with several early adopter customers to get their feedback on the productivity benefits that it gives to them. Our third strategic priority is to extend our business into new, close adjacent markets. Here, we are looking to diversify into manufacturing technology sectors with high growth potential and where our competencies in metrology and process control can be deployed. We've provided positioning encoders to robot builders for many years. However, compared to machine tools, robot users are relatively limited in their use of metrology and process control to enhance robot precision.
We believe there's a substantial opportunity to apply our proven technology and know-how in machine part production into the fast-growing world of robotic automation and assembly. Our new industrial automation product line provides a comprehensive suite of calibration and process control tools for robot builders, integrators, and end users. Our RCS products help manufacturers to install, commission, and recover robot cells with far greater precision, consistency, and speed than current methods. Since we introduced these products last summer, we've had a really positive response from the market, and we are working closely with early adopters. Early successes include a global aerospace company that is running the same robotic process in various locations. They're using our products to ensure a consistent approach that is not dependent on the skill of the local employees.
Clearly, the successful implementation of all of these strategies is highly dependent on the skill and dedication of our people. This is a great chance for me to thank everyone for everything that they do to support our success. We continue to invest in our talent pipeline through our renowned early careers and education outreach programs, with a further 160 graduates and apprentices, as well as 65 industrial placements, starting with us last autumn. These programs are vital to developing our skills base in a tight labor market. Meanwhile, we're continuing to focus on productivity, adjusting our workforce to ensure that we have the right people in the right roles. As Alan mentioned earlier, we ran a mutually agreed severance scheme in the UK during H1, and this we expect to yield net annualized savings of around GBP 4 million a year.
Our global pay review, which we implemented in January, will result in a 6% increase in remuneration. Turning to sustainability, we continue to make strong progress towards our target of net zero for Scopes 1 and 2 emissions by 2028. We self-generate 11% of our electricity consumption, and we have contracted with a green energy provider to supply our main UK sites with 100% renewable energy. Really importantly, we also see huge opportunities in helping our customers to pursue their own net zero initiatives, enabling more efficient products and streamlining the manufacturing process. The example we show here is Domin Fluid Power's hydraulic servo valve, which uses our AM technology to reduce energy usage, potentially saving tons of carbon dioxide over each valve's operating life. So looking forward, we feel that we are in a strong position.
We're well positioned in attractive markets that are underpinned by strong underlying growth drivers that are going to persist for many years to come. This, combined with our strategy to drive consistent outperformance, gives us confidence that we can deliver high single-digit organic growth rates through the business cycle. We have seen a mixed picture in H1, with growth in some areas, particularly industrial metrology in APAC, being offset by weak demand elsewhere, most noticeably for positioning encoders for semiconductor manufacturing equipment. We expect our trading and performance to strengthen in the second half through a combination of improving market conditions and our success in pursuing the growth opportunities that I talked about earlier. At this stage, we expect revenues to be between 4% and 16% stronger in H2, resulting in a full year range of GBP 675 million-GBP 715 million.
We continue to balance productivity improvements with investment in our strategic priorities to support our long-term growth targets. Our expected full-year profit range is GBP 122 million-GBP 147 million. Thank you very much for listening.