27th May 2014 07:04
LONDON (Alliance News) - Engineering business Renold PLC Tuesday said it narrowed its losses in the full year, as it continues with its internal "self-help measures" in the face of challenging market conditions.
The company, which makes industrial chains and other power-transmission products, has been struggling for some time and has blamed this on a "lack of external support from the market". Renold posted a pretax loss of GBP5.9 million for the year ended March 31, compared with a GBP11.9 million loss a year earlier.
Adjusted operating profit, excluding the impact of exceptional items and administration costs, rose to GBP11.1 million from GBP7.2 million. Renold said it executed a large scale and complex project to reduce the excess manufacturing capacity of its chain division, and this saw the closure of its Bredbury facility after the period-end.
Revenue, however, dipped to GBP184.0 million from GBP190.3 million a year earlier. Renold said the revenue picture was mixed across its market with local macro-economic conditions being the principal driver of the overall fall.
Renold said the Americas and India both delivered good growth while European economies were mixed, with the net revenue result being broadly flat. Underlying Australasian revenues were down 7.6%, while the commodity dependent Australian market was particularly weak, down 15%.
Overall, Renold said its Chain division had a mixed year, with underlying external revenue virtually flat at GBP139.6 million. However underlying order intake grew 1.4% with the second half 2.2% ahead of the same period a year earlier.
The Torque transmission division also experienced contrasting fortunes, with underlying external revenue almost 6% behind a year earlier. The company blamed this on a wind down of a major mass transit contract that came to an end in the first quarter with a year-on-year reduction of GBP2.7 million in the current year.
In addition, Torque revenues were hurt by a downturn in the mineral extraction and processing sector as both the equipment manufacturers and the end-user markets continued to reduce their demand during the first half of the year. Renold said the rate of revenue decline slowed slightly during the second half of the year as key geographical markets showed some signs of "bottoming out" although this took longer than first estimated.
Looking ahead, the company said the external picture remains subdued, and its focus will remain on internal improvident.
"Self-help remains our watch word as we aim to create and embed a continuous improvement philosophy in all aspects of our business, whether front line sales and service, manufacturing or support functions," Chairman Mark Harper said in a statement. "We are challenging all of our people to make their activities more productive and more efficient".
Despite an improved performance the company said it will not pay a dividend for the recent year, but this policy will remain under review as its performance continues to improve.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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