19th Nov 2013 11:39
LONDON (Alliance News) - Engineering business Renold PLC reported Tuesday an increase in pretax profit for the first half as it focused on internal "self-help measures driven by the assumed lack of external support from the market."
The company, which delivers industrial chains and other power-transmission products, posted pretax profit of GBP1.1 million in the half year to September 30, up from GBP0.4 million a year earlier.
However, revenue dipped to GBP95.6 million from GBP96.7 million in 2012, as its businesses experienced mixed fortunes.
The chain business saw underlying revenue decrease 1%. In Australasia which typically represents just under 20% of external chain sales, order intake was down 11% on the same period last year while revenue declined 8%.
"The weakness was concentrated in Australia itself where commodity industries have delayed a number of major capital projects and made general reductions in maintenance and replacement expenditure," Renold said.
The transmission chain division saw a fall in underlying revenue in the period of 6% compared to the same period in the prior year.
"This follows on from the declining order intake in the second half of the prior year, as a result of softer commodities sectors and the run-down of large mass-transit contracts," it added.
Renold said despite this order intake declined only 2% on the same period last year.
"We have also established a clear road map to further material gains in the short term with the planned removal of excess capacity and the consequent further lowering in the Group's breakeven point," Chief Executive Robert Purcell said in a statement.
"We remain focussed on self-help measures to deliver continuous steady improvements in earnings over the medium term and to meet the cost of the required investment in the business."
Renold said it won't pay an interim dividend. However, it said it "will consider future dividend policy in the light of results from the business going forward".
The stock was trading at 41.50 pence Tuesday morning, down 0.25 pence or 0.6%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Renold