13th Feb 2014 12:36
LONDON (Alliance News) - Renold PLC Thursday said it expects adjusted operating profit for the full year to be above market expectations, as it more than offset a drop in underlying group revenue in recent months by cutting overheads and boosting margins.
The company, which delivers industrial chains and other power-transmission products, said that as a result of improved underlying order intake, contribution margins, and overheads, it now anticipates that its adjusted operating profit for the full year will be above the upper end of current market expectations.
Its adjusted operating profit excludes exceptional items and the costs of administering closed defined benefit pension schemes.
However, the company said its underlying group revenue for the four months ended January 31 was down 1.3% compared to the same period in the previous year, with revenues in its Chain Division up 0.5% but down 6.5% in its Torque Transmission Division.
The underlying revenue excludes the impact of changes in foreign exchange rates.
Renold said the revenue drop represents a slowing in the rate of year-on-year revenue decline, which was 2.2% in the first half of the current financial year.
The company said its group order intake during the four month period was 3.8% ahead of the same period the year before with both Chain and Torque delivering growth.
Renold added that its project to close the Bredbury manufacturing facility, announced last October, continues to progress well and is expected to complete within budget by the end of June.
The company said it remains focused on self help measures to drive continuous improvement in business performance and to support the cost of necessary future investment.
Renold shares were down 1.6% to 65.69 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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