22nd Jul 2014 08:03
LONDON (Alliance News) - Renold PLC said Tuesday that it expects operating profit in its full-year to be above the current market forecasts as its first quarter was boosted by a combination of growth in its Chain division and a further reduction in the rate of decline in the Torque Transmission business.
In a statement released ahead of its annual general meeting the company said underlying group revenue in the first quarter was 0.9% above the comparative period last year. Renold said that the rise reflects an improving trend relative to the 2.3% underlying revenue contraction in the first-half of the prior year and the 0.8% contraction reported in the second-half.
In May the company said it narrowed its losses in its full-year, as it continued with its internal "self-help measures" in the face of challenging market conditions. 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.
The company said Tuesday that the final significant steps of the Bredbury closure project were completed during the first quarter as planned. Annualised savings arising from the project of GBP3.2 million are in line with expectations and delivery has commenced slightly earlier than expected, it said.
The combination of the early delivery of savings from the Bredbury factory closure, and other ongoing incremental actions to reduce the group's breakeven point, have resulted in the company's current expectations for full-year adjusted operating profit being above the current range of market forecasts, despite the adverse impact of foreign exchange movements, said Renold.
"By completing the Bredbury closure project ahead of schedule we have accelerated the delivery of the resulting savings and also freed up management time to focus on new continuous improvement initiatives for the business. Self-help measures remain our priority and we are well placed to deliver further ongoing improvements in operational efficiencies and business processes which will generate additional reductions in our cost base," said Chief Executive Robert Purcell.
Shares in Renold were Tuesday trading 5.94% higher at 53.96 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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