Renold eyes further acquisitions after 32% increase in profits
Chain maker Renold has enjoyed a 32% increase in profits and reported that last year’s acquisition of an Australian business has opened up new markets and is planning further deals this year and next.
Reporting annual results for the year to March 2024 this morning, the Manchester headquartered chain maker said that while top line revenue dipped to £241.4m (2.3% lower than 2023) pre-tax profits were £22.9m, an increase of 32.4% from last year’s £17.3m.
Net debt has been reduced by £4.9m to £24.9m.
In September 2023, the Group acquired Davidson Chain for AU$6m, which increases the Group’s access to the Australian CVC market, building on Renold’s existing market position. The business is performing in line with the Board’s expectations at the time of the acquisition, and the integration of the business into the wider Australian business is progressing well.
CEO Robert Purcell
Robert Purcell, Chief Executive, said the business was now at “an inflection point”. He added: “We are starting to see the compounding impact of the many recent exciting initiatives as they come to fruition. We have a very clear strategy and are executing it diligently. Our continuous improvement initiatives are building an increasingly efficient, productive and resilient business and are providing an ever improving platform to support our commercial initiatives.”
But the strategic commentary to the results has revealed that Renold’s “robust balance sheet” has encouraged the board to accelerate performance through “value-enhancing acquisitions which will allow us to benefit from both increased geographical and product coverage”.
“We have developed a pipeline of acquisition opportunities which we believe have the ability to meet our financial and operational criteria. Such acquisitions will allow us to expand our product and service offering as well as our customer base, further expand our already diverse product portfolio into adjacent market sectors, and allow us to capitalise on our ability to provide customers with high specification products that deliver real benefits to enhance their own business performance.
“The Board has a disciplined approach to appraising acquisition opportunities, ensuring that potential targets will enhance the Group’s wider strategy and earnings. Additionally, the Board is mindful of retaining a conservative capital structure, and will ensure that the long-term net debt to EBITDA ratio is maintained at an acceptable level.”
During the year, Renold built on the prior year’s acquisition of YUK in Spain with the acquisition of Davidson Chain in Australia.
The Davidson acquisition will add to the existing Renold capabilities in Australia and is being integrated into the current Renold site in Melbourne later in 2024.
