Renold seeing early benefits from Bredbury closure

INDUSTRIAL chains manufacturer Renold said it had completed the final steps in its factory closure at Bredbury near Stockport, and had seen modest sales growth of 0.9% in the first quarter.

The company said the earlier-than-anticipated end to the Bredbury closure, which cost 230 jobs, would allow management to focus on other areas of business improvement. It reiterated its earlier guidance that operating profits will top City analysts’ expectations, despite adverse currency movements.

In a trading update covering a period from April 1 to the present, Renold, which also makes power transmission products, said it is striving to be more competitive.

While the savings from the factory closure will be around £3.2m and are in line with expectations, “delivery has commenced slightly earlier than expected”.

Chief executive Robert Purcell said: “By completing the Bredbury closure project ahead of schedule we have accelerated the delivery of the resulting savings and also freed up management time to focus on new continuous improvement initiatives for the business.

“Self-help measures remain our priority and we are well placed to deliver further ongoing improvements in operational efficiencies and business processes which will generate additional reductions in our cost base.”

In terms of sales performance Renold said underlying group revenue in the first quarter was 0.9% above Q1 in 2013, reflecting an improving trend which began in the second half of 2013. It said the  growth in the first quarter was driven by a combination of absolute growth in the chain division and a further reduction in the rate of decline in torque transmission.