Renold axes dividend after challenging year
RENOLD the industrial chains and power transmission manufacturer has axed its dividend after a challenging year which saw it post a £7.7m bottom-line loss.
The listed group said it was taking steps, under new chief executive Robert Purcell, to “re-engineer” its future as the group blamed tough market conditions and its own inefficient processes for the poor results for the year to the end of March.
Underlying revenues fell from £205.5m to £190.3m and underlying operating profits from £13.7m to £7.2m. At the bottom-line after exceptional costs relating to its pension fund and impairment provisions of £9.4m the group made a loss of £7,7m compared with a profit of £7.6m a yera ago.
On a posititve note the Stockport company said it had completed a refinancing deal with its lenders. In a club deal led by Lloyds and Handelsbanken a four year deal, comprising a £41m multi-currency revolving credit facility and an additional £8m of ancillary facilities, has been agreed.
Non-executive chairman Mark Harper, who took on the chairman’s role 10 months ago, said of the results: “These are disappointing, if unsurprising, results due as much to long-standing inefficient business processes within the group as they are to very challenging end markets.
“The good news, however, is that the extensive research we are conducting amongst our customer base demonstrates that Renold’s reputation for offering a superior and differentiated product range is strong and secure.
“We also believe that by removing excess capacity and instituting smarter working practices across the group, we can lower the breakeven point and hence achieve a sustainable performance improvement over the medium term without the need for substantial sales growth.”
