Davies retires as half-year profits plunge at Renold

ECONOMIC uncertainty across Europe has dented sales and earnings at industrial chains group Renold, which also announced the departure of chief executive Bob Davies.

Last month the Wythenshawe firm warned on profits and today it said pre-tax profits for the six months to the end of September had plunged 43% from £3.7m to £2.1m. Sales fell 8% to £96.7m.

It is now “intensifying” cost cutting measures and reviewing its “commercial positioning”.

Despite sales growth in the Americas, the company said it had been undermined by, “ongoing macro-economic weakness with some evidence of de-stocking”.

The group described the picture in Europe as “mixed” with revenue up by 4% in Germany, but down 40% in Switzerland.

The company also announced the December departure of chief executive Bob Davies, who is retiring, and the appointment of his replacement Robert Purcell, who will start in May. In the meantime Mark Harper is temporary executive chairman.  

He said: “Global macro-economic uncertainty, particularly within Europe, dampened demand resulting in revenue weakening compared to the prior year. While disappointed with the trading performance, the board is pleased both with the refinancing and the continued improvement in working capital management. With the macro-economic environment remaining uncertain, the group is intensifying its cost reduction initiatives, reviewing its commercial positioning and taking measures to conserve cash.

“On behalf of the board I would like to thank Bob Davies for his significant contribution to Renold over the past eight years, and to wish him a happy and healthy retirement. I would also like to welcome Robert Purcell whose experience in the strategic development of businesses similar to Renold will prove invaluable to the Group’s future progress.”

Last month the firm secured a £49m refinancing deal with Lloyds TSB and Handelsbanken.