Chain company suffering from Stateside volatility

MANCHESTER-based industrial chain supplier Renold has been suffering as a result of the volatility North American markets.

In a trading update for the four months to January 31, the listed company said as a result of the flat first half sales when December was weak, underlying turnover for the full year was expected to be about 10% lower than the prior year.

The Chain division is expected to finish the year down about 8% and Torque Transmission down around 14%.

The company said sustained deliver of “self-help measures” has led to a further lowering of its break even point.

Its board now expects the impact of the reduction in sales on adjusted operating profit would lead to a decrease of around £2m, or 13% compared to the prior year.

Renold’s acquisition of the Aventics Tooth Chain business went smoothly with the integration and business performance proceeding according to plan.

Chief executive Robert Purcell said: “The fact that international industrial end markets are volatile has been widely reported.

“We are continuing to do the right things to protect capital and revenue investment in projects to support the medium term delivery of the STEP 2020 Strategic Plan rather than simply cost cutting to deliver short term gains at the expense of the Group’s future development.

“Our focus remains on getting the business into the right shape to withstand the current volatility and to deliver growth in the longer term.”