28th May 2019 09:45
LONDON (Alliance News) - Chains and transmissions maker Renold PLC said Tuesday its annual profit and revenue both grew as it continued to deliver on its strategic plan to drive sales and margin improvement.
For the financial year ended March, pretax profit jumped to GBP11.2 million from GBP1.4 million the year prior. This was after revenue rose 5.6% to GBP202.4 million from GBP191.6 million the year before.
Profit performance was helped by a sharp fall in one-off charges during the period to GBP3.0 million from GBP11.1 million the year prior. This was primarily due to a sharp fall in restructuring costs and the non-recurrence of a GBP2.9 million goodwill impairment. In addition, Renold recorded a GBP4.4 million pension credit in the recent year.
Adjusted pretax profit - excluding these one-off items - widened 14% to GBP14.2 million from GBP12.5 million the year prior.
"The Chain division has delivered encouraging organic growth as well as improved operational efficiency, increasing adjusted operating profit to record levels," Renold Chief Executive Officer Robert Purcell said. "The continued successful execution of the strategic plan has enabled margin improvement to be delivered in spite of labour cost inflation and the significant relocation of our Chinese factory, which will take time to ramp up to targeted output and productivity levels."
Renold does not currently pay a dividend, citing continued investment in the business.
"Whilst not immediately visible in the trading performance in the year to March 2019, the operational improvements in Torque Transmission, along with additional revenue from the Couplings long-term contract in the year ahead provide a platform for further organic growth and margin improvement", Purcell added.
"Our strategy has delivered strong results and is the optimum approach to creating and maintaining a higher quality, higher margin business," Purcell continued. "Robust order books provide the basis for continued improvement in the new financial year. We see significant opportunity to build on the platform established, both through ongoing organic growth initiatives and through an effective acquisition strategy."
Shares in Renold were 9.3% higher at 31.70 pence on Tuesday.
Related Shares:
Renold