Record Renold run continues with its best interim performance
Renold, the Manchester industrial chains and power transmissions manufacturer, has continued its growth surge with record half year figures, after posting its best annual figures in July this year.
It also forecast it would deliver a full year result ahead of market expectations.
In the six months to September 30, 2023, the group achieved a 10.7% increase in revenues, of £125.3m, while pre-tax profits almost doubled, from £6.5m the previous year to £12.5m for the reporting period.
This included a £2.2m exceptional profit from the assignment of a lease for a closed legacy site, resulting in a £0.7m per annum reduction in ongoing leased property costs.
Net debt also fell, from £34m to £28.3m, despite the acquisition of Davidson Chain Pty for £3.1m in the period and deferred payment of £1.7m for Industrias YUK S.A.
The order book at September 30, 2023, of £83.6m, compared with the prior year’s record high (September 20, 2022: £99m) as the duration of the order book shortened following normalisation of supply chains this year.
However, in line with previous announcements, the group has decided not to pay a dividend and focus, instead, on enhancing group performance through investment in new equipment and earnings-enhancing acquisitions. The board said the dividend policy will remain under review as margin and cash flow performance continues to develop.
During the reporting period the group said it made good progress on productivity improvements, cost reduction programmes and capital investment projects, accelerating the integration of group-wide supply chain and increasing operational capabilities.
It said the integration of Davidson, increasing the group’s access to the Australian conveyor and adapted transmission chain markets, is progressing well and the business is performing in line with expectations.
Chief executive, Robert Purcell, said: “I’m pleased to report continued progress which builds on the momentum the group has enjoyed in recent periods, delivering a record half year result.
“Sales, margins, profits and cash generation have all progressed well.
“Global markets continue to be uncertain and we remain vigilant for changes in patterns of demand beyond the current order book shortening.”
He added: “We are delighted with the purchase of Davidson in Australia, which further builds our inorganic growth strategy and we remain well positioned to continue developing through acquisition.
“There remains uncertainty over the implication of global economic pressures in the medium term, however, the board is increasingly confident in delivering a result for the current year ahead of previous market expectations.”