Chain company toughing out expected fall in sales
MANCHESTER-based industrial chain supplier Renold says sales have fallen by 9.6% in the first quarter of its financial year ending on March 31.
The company said the dip in underlying sales was expected, especially in its chain division, from the 11% fall in the second half of the prior year.
Listed Renold said underlying group order intake was 3.1% better than the same period in the prior year with chain 3.1% ahead and torque transmission 3.3% ahead.
In chain, Europe, Australasia and China all delivered growth in underlying order intake.
The Americas fell primarily as a result of distributor de-stocking. The trend, however, is an improving one with the fall in the Americas’ order intake lower than the previous three quarters.
The book to bill ratio for the group in the quarter was 110% compared to 96% in the first quarter of the prior year.
In March, the company reported a fall in pre-tax profits from £7.7m to £7.4m for the year end.
Chief executive Robert Purcell said: “Uncertainty and volatility in external markets have been met with the continued delivery of our STEP 2020 Strategic Plan.
“The chain division is seeing welcome early signs of lower volatility. The strong growth in torque transmission order intake in the period points to an improved outlook for the second half.
“We continue to invest in growth related activities focused on expanding our sales foot print and new product development.
“Multiple initiatives are also underway, focussed on efficiency gains and our cost base to improve further our operational gearing. STEP 2020 remains a robust platform to deliver our goal of mid-teens operating margins.”
Meanwhile, Renold’s group finance director Brian Tenner has announced he is leaving the company after six years. He will leave when a suitable replacement has been found.
Chairman Mark Harper said: “Brian has played a key role in the delivery to date of the Group’s Step 2020 strategy, including improved business performance, rationalisation of operations and actions taken to de-risk the pension fund and improve cash and treasury management.”
