Self-help measures start to pay off for Renold
POWER transmission to industrial chains group Renold, said that while revenues are still falling, its “self help measures” would see full year operating profits to come in at the upper end of expectations.
In a trading update from October 1 to the end of January, Renold said it was seeing improved orders, while margins were improved and overheads falling.
The Manchester company, which is in the throes of closing its factory in Bredbury, Stockport, with around 230 job losses, said this project – one of a number of measures to cut costs – was on track.
Underlying revenue in the period was down 1.3% compared to the same four months in 2012/13, with the chain division ahead 0.5% and torque transmission down 6.5%.
Renold said this was an improved picture as year-on-year revenue decline which was 2.2% in the first half. Underlying order intake in the Period was 3.8% ahead compared to the same four months in the prior year with both divisions delivering growth.
The company added: “Contribution margins are steadily improving and the breakeven point in the group is continuing to fall as self-help measures, including cost reductions, continue to deliver benefits.”
On the Bredbury closure plan, it added: “The majority of equipment transfers and additions are now complete as are the related construction projects at the receiving sites. The Bredbury site is in a period of phased run down and the project remains on track to complete within budget by the end of June 2014.”
