Chain supplier grits teeth through market headwinds

MANCHESTER-based industrial chain supplier Renold is putting a brave face on a dip in profits and turnover caused by external market headwinds.

Preliminary results for the year ended March 16 show pre-tax profits are down from £7.7m in 2015 to £7.4m.

Revenue has also fallen from 8.9% from £181.4m to £165.2m. Earnings per share are down from 2.5p to 2.4 (adjusted eps down to 4.7p from 5p).

Chief executive Robert Purcell reported the success of the company’s “STEP 2020 Strategic Plan” has enabled it to maintain operating margins.

The integration was proceeding well for the Tooth Chain acquisition which would be earnings enhancing in first full year of ownership, the company also said.

Further significant pensions de-risking projects were also completed in the UK, Germany and Australia.

Meanwhile, its banking facility was amended and extended to May 2020 with rate savings and flexibility for acquisitions.

Purcell said: “The success of the strategic plan has allowed us to maintain out operating margins. This was achieved despite external market challenges which resulted in a fall in revenue, as we expected.

“At the same time we have improved a number of our core business processes, developed new products ready for market launch, and enhanced customer service.
 
“Our acquisition of the Tooth Chain business was our first under STEP 2020 and is an excellent strategic fit.
 
“The integration process is proceeding well with customer relationships being successfully transferred to Renold Group companies.
 
“Management bandwidth is now available for further acquisitions in the highly fragmented chain market.”