Chains maker bounces back with strong annual financial performance
Industrial chains manufacturer, Renold, has seen strong recovery during the year to March 31, 2022, but has declined to recommend a dividend payout to shareholders.
The Manchester-based group reported an 18.1% increase in revenues of £195.2m, while pre-tax profits soared by more than 100% to £12.4m.
Group net debt of £13.8m was a £4.6m reduction in the year.
However, group chair, David Landless, said: “The board fully recognises the importance of dividends as part of the overall value creation proposition for shareholders. However, the board has carefully reviewed its capital allocation priorities, and believes that both organic and inorganic investment opportunities available to the group, will deliver higher levels of shareholder return over the medium term than the payment of dividends.”
Today’s announcement revealed that multiple businesses across the group delivered record results and its markets rebounded strongly from the COVOD-19 pandemic.
Its order intake was up by 31.7%, from £170m in 2021, to £223.9m.
The order book at the close of the reporting period was 57% ahead of the previous year, at £84.1m, at constant exchange rates.
Renold also reported a significant £11m long-term military contract win, and it said its improving efficiency enabled successful strategic capital investment.
The group said it enjoyed a strong performance, despite significant economic uncertainty, cost pressure, material availability and problems with global supply chain disruption.
During the financial year Renold completed the bolt-on acquisition of the conveyor chain business of Brooks, which it said, at the time, was performing ahead of expectations. Today’s results revealed that the group expects payback on the acquisition of less than two years.
Chief executive, Robert Purcell, said: “I am pleased with the group’s robust performance through the pandemic which reflected the benefits of the strategic development completed in recent years.
“Our employees around the world have responded excellently to the challenges we have faced and I thank them for their dedication and commitment to the group and our customers during this difficult period.”
He added: “Throughout the reported period the business performance has been on an improving trend and our order books have continued to grow in the early part of the new financial year.
“We are cognisant that there remain considerable COVID-19-related challenges in some parts of the world, supply chain issues are still prevalent and inflation is high.
“However, we have entered the new financial year with good momentum and a belief in the excellent fundamentals of the Renold business upon which we are building.”