Acquisitions the next step for chain maker
THE chief executive of Manchester-based chain manufacturer Renold is targeting a programme of acqusitions after reporting a 30% increase in pre-tax profits to £7.7m (2014: £5.9m).
In the company’s preliminary results for the year ended March 31, revenue grew 2% to £181.4m (2014: 177.9m) with adjusted earning per share rising to 56% to 5p, following prior year growth of 129%.
Chief executive Robert Purcell said acquistions would be the third stage of a three-year plan for the company.
“The first stage was to turn the company round, and we are currently in the second stage, which is organic growth,” he told TheBusinessDesk.com.
“We are now looking ahead and carrying out detailed work with a view to acquisitions and we are very optimistic. We are operating in a highly fragmented markets with our products across the world.”
In its report, the company said the year had been marked by a number of successes, including a significant reduction in its breakeven point following the closure of its Bredbury chain facility under budget and ahead of schedule in the first quarter.
Purcell said: “We have made strong gains across a wide range of our key performance indicators.
“We delivered a second consecutive year of significant growth in earnings per share, with the Chain division surpassing its target threshold RoS of 10.0% being a major factor in pushing forward Group profit margins.
“We also put in place some longer term initiatives to secure a financing arrangement that supports the current Growth and future acquisition phases of our strategic plan and successfully completed a de-risking project for a significant proportion of UK pensioner liabilities just after the year end.
“We are now focusing on our new target of achieving operating margins in the mid-teens by 2020 whilst delivering steady and continuous improvements in earnings per share.”